Tax Withholding Certificate

A Tax Withholding Certificate is an official document issued by the withholding agent (employer, treasurer, or other payment maker) as proof that tax has been deducted from the taxpayer's income. Governed by Article 23 paragraph (1) of Law No. 28/2007 on General Tax Provisions and Procedures (UU KUP) and Ministry of Finance Regulation No. 168/PMK.03/2023 for PPh 21. For permanent employees, the PPh 21 withholding certificate is Form 1721-A1. For civil servants, military personnel, and police, Form 1721-A2 is used. The certificate must be issued and delivered to the income recipient within one month after the tax year ends, typically by end of January. This document serves three critical purposes: (1) Proof that tax withholding occurred, (2) Tax credit when filing the annual return, (3) Supporting documentation for claiming refunds (restitusi) if there is excess tax paid.

This article is for education, not tax advice.

Example

Company Jaya issues Form 1721-A1 to Dani at end of January 2026. The form shows: Gross income for 2025 = Rp 120 million; PPh 21 withheld = Rp 3.6 million. When Dani files his annual return (Form 1770 SS) for tax year 2025 in March 2026, he records Rp 3.6 million as a tax credit. If Dani's total tax liability calculated on the return is Rp 2.4 million, he is entitled to a refund of Rp 1.2 million.

Source: Article 23 para. 1 UU KUP (Law No. 28/2007); PMK No. 168/PMK.03/2023