TAX CONSULTANTS IN UNDERSTANDING HOTEL BUSINESS TAX

TAX CONSULTANTS IN UNDERSTANDING HOTEL BUSINESS TAX

 

By:   Adv. Ida Bagus Made Utama, S.E., S.H., M.H., BKP., CPCLE

Tax Consultant in Bali

In the current situation where the Covid-19 pandemic continues to present significant challenges, it is crucial for economic actors to consider the broader economic context. While health concerns remain a priority, it is also essential to address the economic situation. Without compromising on health protocols, it is vital for economic actors to adopt a creative approach to running the economy. The government’s vision of a creative economy is expected to stimulate growth in the real sector. One of the objectives of the creative economy is to advance the tourism sector, which will undoubtedly affect the increase in occupancy rates and the number of inns and hotels. As we are all aware, Bali is the mainstay of the island of the Gods, and the tourism sector is the island’s primary source of income. The devastating impact of the Covid-19 pandemic on the Balinese tourism sector has resulted in a significant decline in the island’s economic activity, with the tourism sector reaching a negative growth rate of approximately -13%. This is a matter of great concern.

How can we consider increasing the mainstay sector owned by the Bali region as a national tourism mainstay sector? As one of the tax consultants in Bali, I am here to help you understand the hotel tax in detail.

Legal Basis

• RI Law No. 28 of 2009 concerning Regional Taxes and Levies.
• PP RI No.55 of 2016 concerning General Provisions and Procedures for Local Tax Collection.
• District (City) Local Regulation: Each region has a different local regulation on hotel tax.

Hotel tax is a tax levied on services provided by hotels, including supporting services that enhance the overall guest experience. These services may include sports and entertainment facilities, as well as other amenities that contribute to the comfort and convenience of hotel guests. Hotel means an establishment providing accommodation and other related services against payment, including motels, inns, tourist huts, tourist guesthouses, lodging houses and the like, and boarding houses with more than 10 (ten) rooms. The subject of the hotel tax is all types of services, including ancillary services, which are used to complement the hotel and provide comfort and convenience, including sports and entertainment facilities and the hotel rooms which rented by the hotel management. In terms of support services, Bali Tax Consultant can investigate this matter further, including telephone facilities, fax, telex, internet, photocopying, laundry, transport, swimming pool and other facilities provided by the hotel management.

As a tax consultant in Bali, it should also be noted that the services exempted from hotel tax are five types of services that are not included in the object of hotel tax as regulated in Article 32 paragraph (3) of the PDRD (Pajak Daerah dan Retribusi Daerah or Regional Taxes and Regional Levies) Law. The five types of services that are exempted include:

1. Boarding residence services organized by the Central Government or Local Government;
2. Apartment rental services, condominiums, and the like;
3. Residential services in educational centres or religious activities;
4. Residential services in hospitals, nurses’ dormitories, nursing homes, orphanages, and other similar social institutions; and
5. Travel agency services or tourist trips organized by hotels that can be utilized by the public.

Hotel Tax Subject

Hotel tax subjects are individuals or entities that make payments to individuals or entities that operate hotels.

Tax Collection System

The hotel tax collection system uses a self-assessment system in which taxpayers are given the opportunity to calculate, pay and report their own taxes payable using SPTPD, payment through a designated bank.

Hotel Tax Calculation and Rate

Hotel tax = Hotel Tax Rate 10% x Taxable Base

The Hotel Tax Imposition Base (Dasar Pengenaan Pajak or DPP) is the amount of payment that should be paid to the hotel.

DPP Hotel Tax:

1. Room rental income.
2. Other services.
3. Service Charge.

Tax Period and The Time When Hotel Tax is Payable

Tax Period is a period of 1 (one) calendar month with a period of the same length as a Takwim (calendar month) or other period regulated by Regional Head Regulation for a maximum of 3 (three) calendar months, which is the basis for taxpayers to calculate, deposit, and report taxes owed.

The tax payable is the tax that must be paid at a time, in the Tax Period, in the Tax Year, or in Part of the Tax Year in accordance with the provisions of local taxation laws and regulations. When tax payable occurs when the tax subject makes payment to the taxpayer (hotel entrepreneur) for services provided by the hotel. In the case of payments made before hotel services are provided, the tax payable is determined at the time of payment.

Payment and Reporting of Hotel Tax Through Online System.

The Regional Revenue Agency is responsible for reporting taxpayer business transaction data. This is achieved by connecting the taxpayer’s business transaction data information system with the Regional Revenue Agency’s information system in an online system. Taxpayer business transaction data is payment transaction data made by tax subjects or the public to taxpayers for hotel services.

Hotel Business Transaction Data

Payment transaction data reported in the online system as follows:

1. Room rental payment.
2. Payment of food and beverages.
3. Payment of supporting services:

• Laundry
• Telephone, facsimile, internet, telex and photocopy.
• Transportation managed by the hotel or cooperated with other parties.
• Service Charge.

4. Payment for the usage of entertainment and sports facilities provided by the hotel.
5. Banquet: meeting room rental.

Local Tax Return (or Surat Pemberitahuan Pajak Daerah) hereinafter abbreviated as SPTPD, is a letter used by taxpayers to report the calculation and/or payment of taxes, tax objects and/or non-tax objects, and/or assets and liabilities in accordance with the provisions of local taxation laws and regulations.

Tax Payment (Online and Manual)

Various models of local tax payment and reporting procedures depend on each local regulation:

For example, payment of hotel tax payable is made through a debit transfer order from the deposit of funds contained in the taxpayer’s account. Tax payments through debit transfer orders are made no later than every 15th of the following month using the e-SSPD form.

Reporting of tax payable within the tax period is carried out using e-SPTPD and submitted every 20th of the following month. Submission of e-STPD is carried out by the bank through the CMS system based on a power of attorney from the taxpayer.

Cash Management System (CMS)

This system is based on an information system provided by the Bank to customers that covers management, payment, billing and liquidity activities. By using this system, management becomes faster and more effective. It is used in online payment of hotel tax. For hotel taxpayers who are unable to connect to the business transaction data recording system, taxpayers must open an account with one of the banks in order to report and pay taxes electronically through the CMS provided by the bank. The amount of tax payable that is paid through CMS is based on the calculation of tax payable by the taxpayer. The bank makes a debit transfer order for tax payments from the taxpayer’s account to the local government treasury account based on the taxpayer’s power of attorney.

Furthermore, there is a similar process: Hotel tax reporting can be completed via the Regional Revenue Agency website by filling out the relevant form and attaching the requisite revenue data. Verification of reporting will be conducted a maximum of two times in a 24-hour period. Once verification is complete, the taxpayer will receive an email with proof of reporting and a billing letter. The billing letter will detail the amount of tax payable by the taxpayer in accordance with the information provided. Payment can be made through a designated bank or by transfer (where proof of payment will be emailed to the taxpayer’s email and the estimated time is approximately 2-3 days). Please note that the reporting deadline is extended to the 27th of the following month, but payment remains on the 20th of the following month. It is not possible to separate these items from other tax-related matters, which is particularly challenging for .

Based on the preceding discussion, it is anticipated that the creative economy will emerge as a global economic trend in the future. This will stimulate the real sector in the country. The potential of the creative economy from the tourism sector is also significant. If this sector develops, the hospitality industry will recover and grow once the impact of the Covid-19 pandemic has passed. If these projections are accurate, local governments in Bali, particularly Badung Regency, stand to gain significantly from this potential growth in the creative economy sector. With the aim of providing entrepreneurs planning to open hotels in their respective regions with an understanding of hotel tax, I hope the above explanation will be helpful. In terms of tax consultants in Bali, it is our hope that this will increase knowledge about the subject.

The author is a tax consultant in Bali, registered at the Directorate General of Taxes, managing partner at IBU Consulting Denpasar and lawyer at World Prime Law Firm, and lecturer at one of the universities in Bali.