Taxable Income (Corporate)

Corporate Taxable Income is the fiscal net income after loss compensation, multiplied by the corporate tax rate to compute tax due. Governed by Article 16 of the Income Tax Law. Calculation: Gross Income minus Allowable Expenses (Article 6 of the Income Tax Law) = Commercial Net Income; apply fiscal corrections (positive and negative) = Fiscal Net Income; deduct prior-year loss carry-forwards = Taxable Income.

This article is for education, not tax advice.

Example

PT Maju has gross revenue Rp 10 billion, commercial costs Rp 8 billion (commercial net income Rp 2 billion). After positive fiscal corrections of Rp 200 million, taxable income = Rp 2.2 billion. PPh Badan = Rp 2.2 billion x 22% = Rp 484 million.

Source: Article 16 UU PPh No. 36/2008