Event Organizer, know and how with the Taxation

Event Organizer, know and how with the Taxation

          As we know in recent days, many events have happened in Indonesia, let say, start with G 20 summit in Nusa Dua Bali, followed by ASEAN Summit in Labuan Bajo NTT, where Indonesia has importance positions as presidency of G 20 Countries, so the Chairman of ASEAN, both of them were successfully held by Indonesia.

          In following weeks or months we will meet with another events, musician from England, Coldplay, and the other is Indonesian National Football Team versus Argentine National Football Team FIFA matchday.

          Sure that, our community must be proud and glad, economic activity will be move, but don’t forget with the taxation aspect.

          First, we start with the definition of Event Organizer itself, refer to SE-11/PJ.53/2003.

          Event Organizer is an activity that operate by Service Entrepreneur, include many activities, for example are music performance, sport event etc. So include with the activity which supporting activities and others.

Event Organizer has many forms, which can be list below :

1. One Stop Service Agency. 
   That full service include make a plan, run down, until evaluation 
2. MICE or meeting, incentive, convention and exhibition
   Holding a summit, or meeting, fair and so on
3. Music Performance
   Music Performance from domestic or abroad
4. Wedding Planner or Wedding Organizer
   Specialize in Wedding Event
5. Personal Organizer
   Organize event for private purposes, like birthday and so on

Event Organizer has many aspects in taxation :

We will explain below with :

1. PPh article 21
   PPh article 21 will be charged by Service User, refer to applicable rules. 
   Especially for corporate tax, will be charged to their employees,
2. PPh article 23
   PPh article 23 will be charged by Service User, with corporate tax rate at 15 % or 2 % depend on the tax object,
3. PPh article 4 (2)
   If the corporate lease hall or room must be charged PPh article 4 (2) final with tax rate 0,5 %, with a condition that omzet per year not over than 4,8 milliard,
4. Value Added Tax
   The corporate will be charged Value Added Rate with tax rate 11 %, along with a condition that omzet per year not over than 4,8 milliard.

From using this service in customs area will be charged Value Added Tax, also using this service from abroad in customs area, will be charged Value Added Tax,

Tax base will be used to count how much Value Added Tax will be charged are :

• Total cost which Event Organizer ask for, to Service User,
• Reward from those activities, include profit sharings,
• Total cost that Event Organizer ask for, to Service User, if any cancellation happened,

From many sources, we know that total costs needed from the matchday Indonesian National Football Team versus Argentine Football National Team is almost 74 Milliard,

From British Musician Coldplay ticket price reachs 60 million per ticket, tax aspect must be keep on track from those events,

Now, we discuss about the rules, means related to Event Organizer’s taxation, we find the latest is SE-11/PJ.53/2003, which arrange Event Organizer’ taxation especially in Value Added Tax (VAT).

Along with growing of entertainment industries, many events have happened, such music performances, sport events, summits, domestic or international, ect.

It needs more comprehensive rules, not only in Value Added Tax aspect, but whole aspects, include PPh article 21, PPh article 23, and PPh article 4 (2).

We give suggestion and input to the leaders of Directorate General of Tax, to review and upgrade the rules related to Event Organizer tax aspect, because the sector is going rapidly.

So that we can dig the tax potential of the sector, to the extent of state revenue.

For the descriptions above, we can conclude some points list below :

• Entertainment industries are big economic sectors, need to dig and explore of tax aspect of those activities,
• The tax aspect are include :
  - PPh article 21
  - PPh article 23
  - PPh article 4 (2)

And Value Added Tax

• Now, the rules related to Event Organizer tax aspects need to improve, because Entertainment Industries growing fastly, it needs more comprehensive rules, especially in SE-11/PJ.53/2003, only contain Value Added Tax aspect, it needs to add with PPh article 21, PPh article 23, PPh article 4 (2) aspects,

In terms of the age of SE-11/PJ.53/2003 was 20 years old.