Know What is Land and Building Tax

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A running business definitely needs a physical location as a center of operations to run a business. Basically, a company requires expenses so that its business or business can run in that location legally or legally. The required cost is Land and Building Tax (PBB).

As a company that is established in a certain location, it is obligated to pay for the building or land used for its business activities through the Land and Building Tax (PBB).

What is Land and Building Tax?

Land and Building Tax (PBB) is a fee that must be paid for the existence of land and buildings that provide benefits and socioeconomic status for a person or entity. Because the Land and Building Tax (PBB) is material in nature, the amount of the tariff is determined from the condition of the existing earth or building object.

Objects and Subjects of Land and Building Tax (PBB)

The definition of the object of Land and Building Tax (PBB object) itself is land or buildings that are obliged to be levied tax. Earth objects in the Land and Building Tax include:

1. Ricefield
2. The farm
3. garden
4. Land
5. yard
6. Mine

Meanwhile, building objects in the Land and Building Tax include:

1. Living house
2. Business building
3. Multi-storey building
4. Shopping center
5. luxury fence
6. Swimming pool
7. Toll road

The definition of the subject of Land and Building Tax (subject of PBB) is an individual or entity that legally and clearly has rights to the land, obtains its benefits, owns and controls the building, and feels the benefits.

Not Including Land and Building Tax Objects (PBB)

After knowing what is the object of the Land and Building Tax (PBB), actually not every existing land and building can be an object in the Land and Building Tax (PBB), there are also some that are not included in the Land and Building Tax object ( PBB), which can be grouped based on their use:

        1. It is used for the public interest and does not gain profit in the fields of:

• • Social
  • Worship
  • Health
  • Culture
  • Education
  • History

         2. Used to maintain flora and fauna:

• Nature reserve forest
• Protected forest
• National Parks

         3. Used by representatives of countries or international organizations:

• Consulate
• Embassy

Legal Basis of Land and Building Tax (PBB)

Land and Building Tax (PBB) is basically regulated in several laws in Indonesia, namely:

1. Law (Law) No. 12 of 1994 on Amendments to Law (Law) No. 12 of 1985 relating to Land and Building Tax (PBB) which regulates all levies on Land and Building Tax (PBB)
2. Law (UU) No. 28 of 2009 concerning Regional Taxes and Levies which explains:

• • That the district government or city government has the authority to collect Land and Building Tax (PBB) in the rural and urban sectors (PBB-P2)
  • That the government or the center has authority over the Mining, Forestry and Plantation sectors (PBB-P3)

Basis of Imposition of Land and Building Tax (PBB)

As the basis for the imposition of levies on Land and Building Tax (PBB) it can be called the Selling Value of the Tax Object (NJOP) and is calculated based on the average price or market price at the time of making a sale and purchase transaction. The basis for the imposition of this levy is determined by the Minister of Finance (Menkeu).

However, each region has a different Tax Object Selling Value (NJOP) due to the influence of several basic stipulations for land and building objects, namely:

1. Materials used in the building
2. Leaflet
3. Manipulation
4. Environmental conditions
5. Utilization
6. Allocation

How to Determine the Calculation of Land and Building Tax (PBB)

There are 3 stages carried out in calculating Land and Building Tax (PBB), namely:

1. Determining the Selling Value of the Tax Object (NJOP)

The definition of the Sales Value of Tax Objects (NJOP) itself is the amount of the price for objects both land and buildings or it can also be said as the price for land and building properties. Before calculating the amount of Land and Building Tax (PBB) that must be paid, the first step must be to know in advance the price of the land and buildings.

2. Determining the Taxable Selling Value (NJKP)

The Taxable Selling Value (NJKP) is a basis for calculating the Land and Building Tax (PBB) as the selling value of the object to be included in the calculation of the tax payable. The following is a provision for the percentage of the Taxable Sales Value (NJKP) that has been determined by the government based on the Decree of the Minister of Finance No. 201/KMK.04/2000 concerning Adjustment of the Amount of Sales Value of Non-Taxable Tax Objects as the Basis for Calculation of Land and Building Tax:

• • 40% (forty percent) for plantation
  • 40% (forty percent) for mining
  • 40% (forty percent) for forestry
  • Meanwhile, for other tax objects such as rural and urban areas, it can be seen from the Sales Value of Tax Objects (NJOP), namely: 40% (forty percent) for a value of more than Rp. 1,000,000,000 (one billion rupiah), while 20% (twenty percent) ) for a value of less than IDR 1,000,000,000 (one billion rupiah).

Again with reference to the description of the Decree of the Minister of Finance, to calculate the Taxable Selling Value (NJKP) is to multiply the percentage of the Taxable Selling Value (NJKP) with the Taxable Selling Value (NJOP). The formula is as follows:

NJKP = % NJKP X NJOP

3. Calculating Land and Building Tax (PBB)

After knowing the Sales Value of the Tax Object (NJOP) and the Taxable Selling Value (NJKP), you can directly calculate the Land and Building Tax (PBB) using the following formula: PBB = 0.5% X NJKP

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