EVALUATION OF THE NET AND GROSS ACCOUNTING METHOD TO CALCULATE THE INCOME TAX PPH 21 IN PT. LEMATANG COAL LESTARI (CASE STUDY)

Abstract

Tax is related to every business, every company need to concern about the income tax whether it get profit or not. As long as the company paid to the employee, the individual income tax must be concerned. In one company, usually there are two kinds of income tax – employee income tax and company income tax. Regard to individual income tax, there are two methods to calculate – gross method and net method. The aid of this research is to find which method is more favorable for the company to minimize the company's total individual income tax payment but still according to the relevant Indonesia tax laws and Indonesia tax regulations. The data related to the company’s income tax was collected by the researcher directly from the accounting and finance department of the company with the permission of the CFO, since the researcher is the one who deal with the tax affairs. Then, the analysis of data gathered was conducted by the means of calculation, assisted by the functions in Microsoft excel. After the analysis of the data, the researcher find the mystery behind the gross and net method. The finding was about in which cases the company should practice the gross method, meanwhile, in which cases the company should practice the net method. From the finds, the researcher has developed a new accounting system to report the income tax which can save a lot of tax expenses every year for the company with reasons other than tax fraud. For the company, I suggest every employee should have the NPWP card. The company uses gross method to calculate the employee income tax; means withholds the employee income tax every month and report to tax office on time. Make the journey entry properly and adjust the tax expense carefully in the end of the year. Every carefully to deal with the tax, do not do anything related to tax fraud.