Indonesia: Reduced tax rates offered to publicly listed companies
Benjamin Simatupang and Fabian Abi Cakra of GNV Consulting highlight the key tax-related developments from September and October 2020 in Indonesia.
Applying the corporate income tax rate for publicly listed taxpayers
On September 1 2020, the Minister of Finance (MoF) issued Regulation No. 123/PMK.03/2020 (PMK-123) which provides administrative guidelines to enjoy the corporate income tax (CIT) rate reduction for publicly listed taxpayers registered in the Indonesia Stock Exchange.
In brief, PMK-123 provides guidelines as follows:
1. The publicly listed taxpayer should submit the following reports along with the CIT return:
Monthly reports which outline the name of the taxpayer, tax ID number, fiscal year and specific statement on the fulfillment of the administrative requirements which can be obtained from the Securities Administration Bureau, or those who perform self-reporting, and a
Report of shares ownership by affiliated parties of the taxpayers.
2. A taxpayer may enjoy the CIT reduction in the fiscal year 2020 provided that it fulfills the following cumulative requirements:
For early periods of 2020 until Government Regulation No. 30 of 2018 (PP-30) came into force, at least 40% of the total shares are publicly traded in Indonesia, and the shares must be owned by a minimum of 300 parties and the ownership of each shareholder shall be less than 5% of the total issued shares;
After PP-30 came into force, the above shares shall not be repurchased by the issuer and/or its affiliated parties; and that
These requirements must be fulfilled for at least 183 calendar days of a fiscal year.
It should be noted that PMK-123 also defines the affiliated party of a publicly listed taxpayer based on the definition in the prevailing income tax law, but limited to the controlling shareholder and/or main shareholders under the definition of the Indonesian capital market law and regulations.
The expiring final income tax regime for corporate taxpayers
On September 7 2020, the Directorate General of Taxes (DGT) issued Announcement No. 10/PJ.09/2020 (PENG-10) concerning the expiration of the final income tax regime as stipulated in Government Regulation No. 23 of 2018 (PP-23) for corporate taxpayers.
The main points of PENG-10 are summarised as follows:
1. The regime of PP-23 shall expire at the latest within:
Three fiscal years for corporate taxpayers in the form of a limited liability company; and
Four fiscal years for corporate taxpayers in the form of a cooperative, limited partnership, or a firm.
2. In the event that the taxpayer, as referred to in number one, was registered in the 2018 fiscal year, the final income tax regime of PP-23 is applicable until:
The end of the fiscal year 2020 for a corporate taxpayer in the form of a limited liability company; and
The end of the fiscal year 2021 for a corporate taxpayer in the form of a cooperative, limited partnership, or a firm.
When the period as referred to in number two ends, the taxpayer shall fulfill its tax obligations in accordance with the general income tax regime for the following tax years.
The implementation of e-Faktur 3.0
On September 11 2020, the DGT issued Announcement No. 11/PJ.09/2020 (PENG-11) regarding the national implementation of the e-Faktur desktop application version 3.0, which is effective from October 1 2020.
The salient points of PENG-11 are summarised as follows:
All VAT-able taxpayers are required to download the latest application at https://efaktur.pajak.go.id.
The user is recommended to keep a back-up of databases and copy the previous database to the new e-Faktur 3.0 platform;
This desktop application brings features including pre-populated input VAT for import declarations (PIB), e-VAT invoices (e-Faktur), VAT refunds, synchronised e-Faktur electronic stamps, and pre-populated monthly VAT returns.
Draft bill on stamp duty
On September 29 2020, the House of Representatives of Indonesia approved the draft bill on stamp duty as an amendment of Law of the Republic of Indonesia No. 13 of 1985 concerning stamp duty.
The key elements of the bill include:
The updated stamp duty rate would implement a single rate of IDR 10,000 ($0.69);
Stamp duty of a nominal value of IDR 10,000 must be affixed to :
Documents which are used as evidence in court; and
Documents which are used in order to elaborate upon civil-related events, including :
Agreements, statement letters or similar as well as their copies;
Notarial deeds, as well as their counterpart originals and copies;
Deeds that are drawn up by land-deed officials and their copies;
Securities under any name and in any form;
Securities transaction documents, including transaction documents for futures contracts;
Documents stating sums of money in nominal values which exceed IDR 5 million and which address the receipt of money or which contain acknowledgment of full or partial payments or calculations of loans.
Temporary or indefinite exemptions from the imposition of stamp duty are to be granted in relation to certain types of documents, as follows :
Documents which address transfers of rights over lands and/or buildings in order to accelerate the restoration of socio-economic conditions;
Documents which address transfers of rights over lands and/or buildings used for non-commercial regional/social purposes;
Documents which promote or implement government programs;
Documents that relate to the implementation of international agreements.
This bill is due to come into effect from January 1 2021.
T: +62 21 2988 0681
Fabian Abi Cakra
T: +62 21 2988 0681