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ACCOUNTING FOR

CONSTRUCTION
CONTRACTS
Josua Pranata (008201600059)
Kevin Kenn Tangkas (008201600013)
Nathania Neysa (008201500022)
Silvia Sely Grace Gea (008201600062)
Ding Zisheng (008201600082)
ACCOUNTING FOR CONSTRUCTION
CONTRACTS

 Thus the contract covers:


1 contract for providing services that are directly related to the construction of assets
2 contracts for asset destruction or restoration and environmental restoration after
the destruction of assets
ACCOUNTING FOR CONSTRUCTION
CONTRACTS

 while in its formulation can be formed in various ways which are classified as follows:
1 fixed price contract
2 plus cost contract
use of percentage completion
method

 Using the percentage method, the completion of this contract requires the company to
recognize revenue and costs according to the level of progress or the level of
completion of the work that is not required to wait for the completion of the contract
Income tax for construction
services
Definition

1. Construction Services are consultancy services planning construction work,


construction work implementation services, and construction supervision consulting
services;
2. Construction Work is the whole or part of a series of planning and / or implementation
activities along with supervision which includes architectural, civil, mechanical,
electrical, and environmental arrangements of each and every one of them, to realize
a building or other physical form.
3. Construction Planning is the provision of services by an individual or entity that is
declared a professional expert in the field of construction service planning capable of
realizing work in the form of other physical building planning documents.
4. Construction Implementation is the provision of services by an individual or entity that
is declared a professional expert in the field of construction services that is able to
carry out its activities to realize a planning result into a form of building or other
physical form, including integrated construction work namely the merging of service
functions in a model of merging planning, procurement, and development
(engineering, procurement and construction) and a model of design and build.
Income tax for construction
services
5. Construction Supervision is the provision of services by an individual or entity that is
declared a professional expert in the field of supervision of construction services,
which is capable of carrying out supervisory work from the beginning of the
construction work to completion and delivery;
6. Service Users are individuals or entities including permanent businesses that require
construction services;
7. A service provider is an individual or entity including a permanent establishment,
whose business activities are to provide construction services both as a construction
planner, as a construction implementer and as a construction supervisor or sub-sub-
sector;
8. Construction Service Contract Value is the value stated in a construction service
contract as a whole;
Rates
Domestic Taxpayers and Permanent Establishments (BUT) that receive income from construction services are
subject to Income Tax as follows:
Has Business Classification

Form of Work Business Classification Tariff Properties


Implementation of Construction Small 2%( *) Final
Medium and Large 3% (*) Final
Planning and Supervision Small, Medium and Large 4% (*) Final
Does not have Business Classification

Form of Work Tariff Nature


Construction Implementation 4% (*) Final
Planning and Supervision 6% (*) Final

(*) of the amount / receipt of payment excluding VAT


Tax Object of Construction Services
Business

Income received or obtained from a construction service business is subjects of Income


Tax which is final
Tariff of Income Tax for
Construction Services Business

Article 4 paragraph (2) of the Income Tax Law has granted


authority to regulate Income Tax from Construction Businesses by
Government Regulation. With Government Regulation No. 40 of 2009
for construction service businesses whose final imposition is:
1. 4% (four percent) of the gross amount received by the taxpayer of
the provider of construction planning services
2. 2% (six percent) of the gross amount received by the taxpayer of
the construction service provider
3. 4% (four percent) of the gross amount received by taxpayers
providing construction supervision services,
Procedure for Cutting

1. If the service user is a government body, subject of domestic tax entity, permanent
business form or domestic individual taxpayer appointed by the Director General of
Tax is deducted by the service user at the time of payment.
2. If the service user is other than above, the recipient of the income is paid by himself at
the time of payment.
Payment and Reporting
Procedures
1. In the case of Income Tax owed through deductions, then the Payment or tax payment is
deposited to the perception bank or post office, no later than the 10th of the following month
after the tax period ends;
2. In the event that the Income Tax is payable must be paid by the service provider, then it must be
deposited to the perception bank or post office, no later than the 15th of the following month
after the tax period ends;
3. Taxpayers are required to submit a report on deductions and or deposits of tax through a Periodic
Notice to the Office of Tax Servants or KP2KP, no later than 20 days after the tax period ends.
In the event that the maturity of the deposit or the tax reporting deadline coincides with a
holiday including Saturday or a national holiday, deposits or reporting can be made on the
following business day.
The scope of other employment and transitional
rules of Hubungan Kebesaran Tidak Standar

Jobs such as maintenance which is building’s cleaning and painting or other physical form
done by non construction company, the installation and maintenance/repair of machinery
and mechanical equipment also building’s prefabricated components after sales service
done by the suppliers itself, technical service, interior design, and landscape gardening
done by non construction agent, is not included in the term of constructions job. Thus for
the income received by the said company, it is not applicable for the provisions of the
construction service, but it is applicable for the general provision of Income Tax as it
usually is for the non construction service Tax Payer .
In the application of the new regulations, the construction service
involves more than one tax period. It is affirmed that:
 For the contract or part of the contract’s payment until 31 st December 2008,
the application of Income Tax based on the Government’s Rule number 140
year 2000 about Income Tax for Income from Construction Job Service. It still
refers to the old regulations.
 For the contract or part of the contract’s payment after 31 st December 2008,
the application of Income Tax based on the Government’s Rule number 51
year 2008 about Income Tax from Construction Job Service.
 The Income Tax for construction job service which has been cut and
deposited based on Government’s Rule number 10 year 2000 can be
bookkept as the payment of Final Income Tax for the constructions service
corresponding Government’s Rule number 51 year 2008 as long as it comply
the regulations:
1. The cutting and deposit of the Income Tax is done to the income from the construction
service based on the signed contract since 1st January 2008; and
2. The contract or part of the contract’s payment as is mention in point 1 is done at the longest
until the end of the month the Government’s Rule is set

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