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What is PMK 72/2023?
PMK 72/2023 is a government regulation that regulates general provisions, depreciation of tangible assets, amortization of intangible assets, depreciation of tangible assets and/or amortization of intangible assets owned and used in certain business fields, procedures for applying for approval and/or notification to the Director General of Taxes, transitional provisions and closing provisions.
What are the benefits?
The government has issued PMK Number 72 Year 2023 related to Depreciation of Tangible Assets or Amortization of Intangible Assets for tax purposes. This regulation is issued to simplify the rules for taxpayers. This regulation revokes a number of previous regulations, namely, PMK 96/PMK.03/2009, PMK 248/PMK.03/2008, and PMK 249/PMK.03/2008. In this regulation, it is explained that depreciation is carried out on tangible assets that have a useful life of more than one year and are owned and used to obtain, collect, or maintain (3M) income using the declining balance or straight-line method.
Article 6 explains that taxpayers can choose to depreciate permanent buildings for 20 years or in accordance with the actual useful life based on bookkeeping. The useful life of tangible assets also remains the same as the previous regulation, namely:
a) Group 1 for 4 years
b) Group 2 for 8 years
c) Group 3 for 16 years
d) Group 4 for 20 years.
There is also a regulation related to insurance reimbursement where if there is a transfer or withdrawal of assets that get insurance reimbursement, the amount of the remaining fiscal book value of the transferred or withdrawn assets is charged as a loss and the amount of the selling price or insurance reimbursement is recorded or recognized as income in the year of withdrawal. Then, amortization is explained as intangible assets that have a useful life of more than 1 year that are owned or used for 3M. Amortization begins in the month of expenditure, except for certain business fields. The useful life for amortization remains the same as tangible assets.
Is PMK 72/2023 important?
Yes, PMK 72/2023 regarding depreciation of tangible assets and amortization of intangible assets is a concept in accounting related to the decline in value of the company’s assets over time, this is an important part of financial reporting that reflects the company’s condition more accurately based on the actual value of the Company’s assets.
What are the main provisions of PMK 72/2023?
The rules of PMK No.72 / 2023 have become part of the policy reform on the Income Tax COGS Law. The main rules regulated in PMK 72/2023 are as follows:
What does PMK 72/2023 mean to me?
PMK 72/2023 discusses that the regulation was issued to provide legal certainty in accordance with the COGS Law and simplify the laws and regulations related to depreciation and amortization which were previously scattered in several regulations.
How does PMK 72/2023 help?
PMK 72/2023 ensures that all regulations are based on legal certainty in accordance with the HPP Law and simplifies the laws and regulations related to depreciation and amortization which were previously scattered in several regulations. Therefore, the issuance of this PMK also revokes PMK-96/PMK.03/2009, PMK-248/PMK.03/2008, and PMK-249/PMK03/2008 as amended by PMK-126/PMK. 011/2012.
Here are some examples of the application of PMK 72/2023 for you:
A company must have tangible and intangible assets. Depreciation of tangible assets and amortization of intangible assets will affect the decline in value of the company’s assets over time so that it will affect financial reporting that reflects the company’s condition more accurately based on the actual value of the company’s assets.
Details can be accessed at the following link:
https://drive.google.com/file/d/145zltd3FrBNKFeTDG9MyYqctFTe6ACcZ/view?usp=sharing
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