Jakarta, CNBC Indonesia – After exempting value added tax (PPN) in the property sector for 6 months, Finance Minister Sri Muliani Indravati again provided a relaxation, this time an income tax exemption (PPh) on dividends received by taxpayers.
This decision is contained in the Decree of the Minister of Finance (PMK) no. 18 / PMK.03 / 2021 on implementation of law no. 11 of 2020 on job creation in the field of income tax, value added tax and sales tax on luxury goods, as well as General provisions and procedures. Method of taxation.
This derived provision of the Law on Job Creation was signed by Sri Muljani and will enter into force on February 17, 2021. The purpose of applying this rule is to encourage investment in financial markets and the real sector. Dividend is a part of the profit that shareholders received or gained.
The PPh exemption applies to dividends originating in the country received by individual and corporate taxpayers. In addition, taxpayers also receive dividends originating from abroad.
“Dividends that are exempt from income tax are dividends originating in the country or abroad that are received or obtained by taxpayers,” wrote Article 14, paragraph 1, part three of the PMK, quoted by CNBC Indonesia, Tuesday (2 / 3/2021) .
As regards Article 15 (1), dividends originating in a country received or acquired by domestic individual taxpayers are exempt from income tax provided that they must be invested in Indonesia for a specified period of time.
Meanwhile, Article 15, paragraph 2 states, dividends originating in a country received or acquired by a domestic taxpayer are exempt from income tax.
Article 17 also states that dDividends originating from abroad are exempt from income tax provided that they must be invested or used to support other business activities in the territory of the Republic of Indonesia for a specified period of time.
To receive this incentive, taxpayer investors must reinvest a 30% dividend in investment instruments.
Meanwhile, Article 35 of PMC 18/2021 further discloses that there are 12 investment instruments established by the government.
1. National Securities (SBN) and National Sari Securities (SBSN).
2. BUMN bonds or sukuk whose trading is supervised by the Financial Services Authority (PCO).
3. Bonds or sukuk, a state-owned financial institution.
4. Financial investment in a bank of first perception, including Islamic banks.
5. Bonds of private companies or sukuk under the supervision of OJK.
6. Investments in infrastructure through government cooperation with economic entities.
7. Investments in the real sector based on priorities set by the government.
8. Participation in the capital of a company that is newly established and based in Indonesia as a shareholder.
9. Participation in the capital of companies that are already established and have their registered office in Indonesia as shareholders.
10. Cooperation with investment management institutions.
11. Use it to support other business activities in the form of lending to micro and small enterprises.
12. Other forms of investment that are legal in accordance with legal provisions.
“The investment referred to in Article 35 shall be made for at least 3 (three) fiscal years starting from the year of dividend tax or other income received or realized,” Article 36 of PMC 18/2021 reads.