Who is Responsible for Making Annual Corporate Tax Reporting ?
The annual report shall be signed by all members of the board of directors and board of commissioners during their service period at the relevant accounting year, and it shall be provided in the Company’s office as of the date of notice for GMS in order to be examined by the shareholders. It is stipulated under Article 67 of the Company Law.
the signing of an annual report is the form of responsibility of the member of the board of directors and the board of commissioners in performing their duties.
If the member of board directors or member of the board of commissioners does not sign the annual report, then the objected person has to state his reason in writing, or on a separate letter attached to the annual report.
Nevertheless, if there is a member of the board of directors or member of board of commissioners who does not sign the annual report and does not state the reason in writing, the objected person will be considered has approved the annual report.
As previously explained that the Board of Directors obligated to make Annual Report, and submits the Annual Report to the Board of Commissioners to be verified and approved.
Under Article 68 paragraph (1) of the Company Law, the member of board of directors is obliged to submit the annual report of the Company to be audited by a public accountant if:
- The activities of the company are to collect and/or to manage the community’s fund, such as bank, insurance, mutual fund;
- The company issues a debt acknowledgement letter to the public;
- The company is a public company;
- The company is a stated-owned company;
- The company owns assets and/or sales with the minimum value of Rp 50,000,000,000.00 (fifty billion Rupiah)
- Required by the prevailing laws and regulations.
If that obligation cannot be fulfilled, the financial report will not be ratified by the GMS. The report on the audit result by the public accountant has to be submitted in writing to the GMS through the board of directors.
The approval of an annual report, validation of financial report, and report on supervisory duty of the board of commissioners shall be granted by the GMS, as set out in Article 69 of the Company Law Act.
With regards to the provision, the member of board of directors and board of commissioners shall be jointly and severally liable if the submitted financial report is not true or misleading. Nonetheless, if it is proven that such condition is not because of their fault, member of the board of directors and board of commissioners may be exempted from that liability.
After the Board of Commissioners gives its approval, the Board of Directors is responsible to held the AGMS for presented the Annual Report before the shareholders of the Company to be approved. Please be informed that the AGMS can be approved though Extraordinary GMS (EGMS) or by Circular Resolution of Shareholders.
Deadline of Annual Report
An Annual Report must be conducted and approved at the latest 6 months after the end of the latest Financial Year.
Any lateness in a submission of Annual Report is the responsibility of the Board of Directors, and the members of the board can be hold jointly and severally liable to any party that suffers losses due to their negligence in submitting an annual report. However, the Company Law does not set any applicable sanctions for the Board of Directors who fail to submit an Annual Report in a Financial Year to the GMS.
Commonly Indonesian company Financial Year is 1 January to 31 December, however, the company may change the Financial Year to follow the head quarter Financial Year. Please read our related link regarding the Financial Year.
Indonesia Investment Activity Report (LKPM)
Every foreign-owned limited liability company (PT PMA) are obligated to submit reports regarding the process of their investment activities according to the Law No. 25, 2007. Investment Activity Report (LKPM) is the regular reports on the progress of the company and the constraints faced by investors. The Investment Activity Report (LKPM) will help the Indonesian Investment Coordinating Board (BKPM) to analyse and find solutions to challenges faced by investors in Indonesia.
LKPM intended to monitor the realization of investment and production. LKPM covers all investing companies all locations and from every business sectors, except companies in the trading sector. For companies that are investing in the trading business sector, LKPM will only be based on the location that is stated in the business principle license.
In order to increase the monitoring of capital investment realization, the Indonesian Investment Coordinating Board (BKPM) issued a Regulation of the Head of BKPM No. 13 of 2009 dated 23 December 2009 as amended by a Regulation of Head of BKPM No. 7 of 2010 dated 31 March 2010 concerning Guidelines and Procedures for the Control of Capital Investment Implementation (“BKPM Regulation on LKPM”).
Depending on the legal entity of the company and which stage of the development process the company is in, bears different deadlines for reporting LKPM. Companies that are still in the development process are to report periodically every 3 months, as the following:
- January – March period, LKPM must be submitted the latest by April 10th of that year.
- April – June period, LKPM must be submitted the latest by July 10th of that year.
- July – September period, LKPM must be submitted the latest by October 10th of that year.
- October – December period, LKPM must be submitted the latest by January 10th of the following year.
For the companies that have obtained their business license, the LKPM will be submitted per semester (every 6 months), as the following:
- LKPM Semester I for the period of January – June, LKPM must be submitted the latest by July 10th of that year.
- LKPM Semester II for the period of July – December, LKPM must be submitted the latest by January 10th of the following year.
For foreign company representative office, the LKPM is to be submitted once, by each of the end of the year.
Foreign investors must also be aware that for every company with a capital investment activity that covers more than one municipality/city, must submit LKPM for each municipalities/ city. Companies that also have investments in multiple business sectors, must also report each business fields in a separate report. For companies that are located in a free trade zone and free port zone as well as other specific economic zones, must submit LKPM to each of the head of the zones concerned.
The companies who already completed the merger, the surviving company must submit the LKPM for all capital investment activities as the result of the merger.
Procedures for Corporate Tax Reporting
The companies must submit the LKPM in accordance with the forms as provided for in the BKPM Regulation on LKPM. Submission LKPM can be done in several ways:
- Fill out the application on-line through SPIPISE (Electronic Investment Licensing and Information Services System)
- By facsimile or deliver hardcopy directly to the Head of BKPM c.q. Deputy for Control of Capital Investment Implementation
- By e-mail to address firstname.lastname@example.org
The company must also appoint a responsible person to coordinate the making of the LKPM and the name of the person appointed must be submitted on written to BKPM using a form as provided in the BKPM Regulation on LKPM.
Companies that fail to submit LKPM are subject to administrative sanctions that can result in a revoked investment license or investment facility. Submission of LKPM is regulated by the Regulation Head of Investment Coordinating Board No. 3 year 2012, on revision to Regulation Head of Investment Coordinating Board No. 13 year 2009, regarding guidelines and procedures for controlling the implementation of investments.