Event Runs Smoothly, Let’s Get to Know the Event Taxes You Must Pay

Hello, EastPro Friends!

Creating a cool and successful event isn’t just about having a great concept and flawless execution, there are other aspects that need attention, including administrative matters. One of the most crucial elements is event tax. Everything must be taken care of properly!

Many people often forget or don’t even realize that organizing an event involves certain taxes that must be calculated. If not prepared from the beginning, these taxes can inflate your budget or even lead to penalties. You wouldn’t want your dream event to fall apart just because of tax issues, would you?

To ensure your event runs smoothly without any hassle, let’s get familiar with the event taxes you must pay. By understanding the applicable taxes, you can budget more effectively and ensure everything is compliant with regulations. Moreover, if you partner with a professional and tax-compliant event organizer like EastPro Event Organizer, you can rest assured that your event will be successful without any administrative drama!

Types of Event Taxes You Need to Know

When organizing an event, several types of taxes need to be considered. Here are the most common ones:

1. Value Added Tax (VAT) (PPN)

VAT is usually applied to transactions such as venue rentals, event organizer services, decoration vendors, sound system, lighting, and more. The VAT rate is 11% of the transaction value. In most cases, the EO will handle this and include it in the total fee charged to the client.

VAT is applicable if the event organizer is classified as a Taxable Entrepreneur (PKP) and has an annual revenue exceeding IDR 4.8 billion. In this case, the company must collect VAT from the services provided.

2. Income Tax (PPh) Article 23

If you hire vendors, MCs, speakers, or guest stars, you must deduct 2% tax for services and 15% for royalties under Income Tax Article 23. This tax must be reported and paid to the government, so make sure both you and your chosen EO are tax-compliant!

3. Final Tax (PPh Article 4 Paragraph 2)

If your event requires venue rental, such as a hotel, multipurpose hall, or convention center, then Final Tax (PPh Article 4 Paragraph 2) applies, with a rate of around 10% of the rental cost.

4. Entertainment and Advertising Tax

For those planning a music festival, concert, or large exhibition, don’t forget about entertainment tax. The rate varies depending on local regulations, typically ranging between 10% - 35% of total ticket revenue.

If you plan to put up billboards, banners, or other promotional materials in public spaces, be prepared for advertising tax as well.

5. Regional Retribution and Licensing Fees

Every city has different regulations regarding event retribution fees. For example, if you’re holding an outdoor event in a city park or public square, you might need to pay an additional retribution fee to the local government.

Make sure to check the event permit requirements so your event remains legal and hassle-free.

What Types of Events Are Usually Taxed?

Not all events are subject to the same taxes! Some of the most common events that require tax payments include:

• Corporate Events & MICE (Meetings, Incentives, Conferences, and Exhibitions), because they involve multiple EO and vendor services.
• Concerts & Music Festivals. Ticket sales are often subject to entertainment tax.
• Exhibitions & Bazaars, subject to regional retribution fees and VAT on booth rentals.
• Talk Shows & Seminars. Speakers and MCs are subject to Income Tax Article 23.
• Company Events, both internal and external events must consider applicable taxes.

Budgeting Tips to Avoid Overspending!

EastPro Friends, to ensure your event runs smoothly without exceeding the budget, it’s essential to include event taxes in your initial planning. Here are some tips you can use:

1. Calculate Taxes from the Start

Don’t wait until the end of the event to think about taxes. Estimate all possible taxes during the planning phase so there are no surprises during payment.

2. Choose a Tax-Compliant EO

Working with a tax-compliant EO like EastPro Event Organizer allows you to stay worry-free. All taxes will be handled professionally, so nothing gets overlooked.

3. Work with Legitimate Vendors

Reputable vendors typically have clear tax systems. Avoid vendors who can’t provide invoices or tax receipts, as this can complicate your event’s financial reports.

4. Document All Transactions

Keep all invoices, bank transfer proofs, and tax payment records. These are crucial in case of audits or for corporate financial reporting.

For a Smooth Event, Trust EastPro Event Organizer!

Don’t want the headache of handling event taxes? Collaborate with EastPro Event Organizer and leave the hassle to the experts!

As the best event organizer in Jakarta and a MICE event expert, EastPro has extensive experience handling corporate events, company events, exhibitions, and even festival events with creative and innovative strategies.

Not only does EastPro provide exceptional event concepts and flawless execution, but we also professionally manage event administration, including event taxes. This means you can focus on making your event a success without worrying about miscalculating or missing tax payments.

So, make your event run smoothly with EastPro and create an unforgettable experience without the hassle!