Net Income Calculation Norms
Net Income Calculation Norms (NPPN) are DJP-set percentages that self-employed individuals and small business owners with annual turnover below Rp 4.8 billion may use to calculate net income instead of maintaining full bookkeeping. Governed by Article 14 of the Income Tax Law and PER-17/PJ/2015. Percentages range from 15-70% depending on the type of business and location (provincial capital, major city, or other area). Taxpayers using NPPN must notify the DJP within the first three months of the tax year.
This article is for education, not tax advice.
Example
A solo-practice doctor in Jakarta with Rp 600 million annual revenue opts to use the norm. The norm percentage for doctors in Jakarta = 50%. Net income = Rp 600 million x 50% = Rp 300 million, then reduced by PTKP to compute PPh.
Source: Article 14 UU PPh No. 36/2008; PER-17/PJ/2015
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