1. 2009 INCOME TAX LAW The new Income Tax Law (UU No. 36 Year 2008) has been passed by the President on September 23rd 2008 and will come into effect on January 1st 2009

2. 2009 INCOME TAX LAW Impact to the resident individual tax payers : 1.Decrease tariff from 5 – 35 %, become 5 – 30 % ( Article 17) 2.Increase Non Taxable Income by 20 % for tax payers and 10% for dependant ( Article 7) 3.To the resident individual tax payers who have no a single tax identity number (NPWP) at 1 st Januari 2009 will be imposed penalty by a 20 % increase from the normal income tax ( Article 21 paragraph (5a)) 4.Fiscal Exit Permit is exempted to the resident individual tax payers who have a single tax identity number ( Article 25 paragraph (8)). 5.Decrease Tariff of income tax for dividen derived by the resident individual tax payers from general tariff ( 5 – 35% ) become 10 % maximum and final. ( Article 17 paragraph (2c)).

3. 2009 INCOME TAX LAW Yearly Non Taxable Income ( Article 7 ) Current (IDR) 2009 (IDR) Tax Payer13.200.00015.840.000 Spouse1.200.0001.320.000 Each dependent ( max. of 3 ). 1.200.0001.320.000

4. 2009 INCOME TAX LAW Progressive Income Tax Rate ( article 17 paragraph (1)) : Taxable Income ( IDR Million ) Current2009 0 – 255 % >25 – 5010 % >50 – 10015 % >100 – 20025 % > 200 – 250 35 % >250 – 50025 % > 50030 %

5. 2009 INCOME TAX LAW Impact to your THP Maximum Annual Salary Current (Maximum) 2009 (Maximum) % Increase THP u.t. 25 Mio5 % Nil u.t. 50 Mio10 %5 %1.1 % u.t. 100 Mio15 % 1.8 % u.t. 200 Mio25 %15 %5.5 % u.t. 250 Mio35 %15 %7.9 % u.t 500 Mio35 %25 %11.7 % Over 500 Mio (*)= until certain amount 35 %30 %> 11.7 %(*)

6. 2009 INCOME TAX LAW How to get a single tax identity number (NPWP) ? Refer to the Circular Letter from DGT No. SE-33/PJ/2008 Sunset Policy’s Programme : Come to tax office : To the Individual Tax Payer who have no running bussiness activity or free-lance (his/her income is merely earned as employee) it will only need 1 hour to get a single tax identity number (NPWP), by provides: 1.Resident : Copy of residence ID card ( Kartu Tanda Penduduk); or 2.Foreigner : Copy of pasport plus certificate of domicile in Indonesia e-Registration via Task Force Team DGT e-Registration via internet

7. 2009 INCOME TAX LAW Current : Progressive Tariff –10% for taxable Income u.t. IDR 50 Million –15% for taxable Income >50 Million u.t. 100 Million –30 % for taxable income over 100 Million New : Single Tariff 28 % (2009) and 25% (2010); and Reduced by 50 % for small/middle scale business : –Small / middle scale business = Annual turnover max Rp. 50 Bio. –Reduce rate is accounted to annual turnover u.t. Rp. 4,8 Bio Corporate Income Tax Tariff

8. 2009 INCOME TAX LAW WITHHOLDING TAX Article 23 CURRENT -Tax Base => Estimated Net Income ( 15% ), e.g : a.30% for Management fee ( Warehouse,Labor supplier,etc) => 4.5% from gross b.20% for Manufacturing(Toll fee/Maklon) => 3% from gross c.20% for Event Organizer => 3% from gross d.30% for waste treatment services => 4.5% from gross e.30% for Technical fee ( agency; booth installation ; etc) => 4.5 % from gross f.30% for R&M conducted by Non Licenses Contractors => 4.5% from gross g.13.3% for R&M conducted by Licensed Contractors ( part of construction service ) => 2% from gross h.26.6% for construction supervisory & planning services => 4% from gross i.10% for cleaning services & pest controlling services => 1.5% from gross -Gross up method : Since the estimated net income is higher than actual profit, most vendors are request for gross up fee/price in order to avoid less profit& overpaid income tax

9. NEW -Tax Base => 2% from Gross Payment/Turnover ( all services except construction services ) -Plus 100% tax penalty to the vendors without tax ID ( NPWP) -Construction Services ( PP 51/2008) Having Licensed as Construction service provider ( WHT art. 4(2) Final) 1. Construction executive services with : a. Qualification :- Large : 3% - Middle : 3% - Small : 2% b. No Qualification : 4% 2. Construction supervisory & planning services with : a. Qualification : 4% b. No Qualification : 6% Note : If construction services is not provided by vendors who having licensed as construction service provider, it will be subject to WHT art. 23 ( Non Final => 2% from gross) 2009 INCOME TAX LAW WITHHOLDING TAX Article 23

10. THANK YOU 2009 INCOME TAX LAW