Could the next Indonesian income tax law adopt to the concept of income under IFRS?

Prianto Budi, Ning Rahayu

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


This study has two purposes. The first is to explore the implementation of income concepts under current income tax law (UU PPh) before and after the convergence of International Financial Reporting Standards (IFRS) in Indonesia. The second is to explore whether the new UU PPh could adopt the notion of income under IFRS. By using a qualitative approach, this study concluded that before and after IFRS convergence, the income definition under current UU PPh has never changed since its first 1983 enactment. Such condition has resulted in some income tax issues based on the ability-to-pay principle and realisation doctrine. The main problem relates to the realisation principle as part of the historical cost accounting system, whereas accounting income refers to the mark-to-market, ignoring realisation rules. The second conclusion is that the income concept under the next UU PPh can partially apply the accounting income concept because it still needs the realisation principle.

Original languageEnglish
Pages (from-to)151-173
Number of pages23
JournalInternational Journal of Economic Policy in Emerging Economies
Issue number2
Publication statusPublished - 2021


  • Ability-to-pay principle
  • Fair value accounting
  • FVA
  • HCA
  • Historical cost accounting
  • Realisation doctrine
  • The concept of income


Dive into the research topics of 'Could the next Indonesian income tax law adopt to the concept of income under IFRS?'. Together they form a unique fingerprint.

Cite this