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XIII. Taxation
Income tax attached to equity dividend is imposed as stipulated under the prevailing regulations. Based on Article 4 3 f of Law No. 36 year 2008 regarding the Income Tax effective on 1 January 2009 regarding the Forth Amendment of the Law No. 7 year 1983 regarding Income
Tax “UUPPh”, the dividend recipient or profit sharing received by a limited liability company as the domestic taxpayer, cooperation, state owned company or local government owned company, equity inclusion towards the company established and domiciled in Indonesia, not
included as the income tax’ object as far as the below requirements are met: 1. Dividend is taken from the retained earnings and,
2. For Limited Company, state-owned company and local government owned company that receive dividend, share ownership for the company that contribute dividend at least 25 from the issued capital.
Based on Article 17 2 Law PPh No. 36 year 2008 and Government Regulation No. 19 year 2009 regarding Tax Income upon Received Dividend or obtained by Tax Payer of Domestic Individual, the income in the form of dividend which received or earned by Tax Payer of
Domestic Individual would be charged with Income Tax of 10 from gross amount and final in nature. As stipulated under Article 2 Minister of Finance Regulation No.111PMK.032010 regarding the Procedure to Impose, Deposit and Report of Income Tax upon Dividend or Received by
the Tax Payer of Domestic Individual, this Income Tax imposed is final at 10 as mentioned above, is conducted via deduction by the payer or other party appointed as dividend payer at the time dividend is made available.
Article 231 of Law PPh No. 36 year 2008 states that upon paid dividend or made available to be paid, or mature towards the Tax Payer
– domestic or institutions, are still deducted with Income Tax of Article 23 of 15 from gross amount of dividend by the obliged party Company.
In case the Tax Payer who receive or earn dividend does not own Tax Payer Number, the tariff deducted would be higher 100 than the normal one or 30 from gross dividend.
Tax deduction as regulated under Article 231a of the PPh Law No. 36 year 2008 above inter alia would not apply for dividend provided to Tax Payer as mentioned under Article 4 3 f PPh Law No. 36 year 2008 as abovementioned and the received dividend by individual as stipulated
under Article 17 2c PPh Law No. 36 year 2008. As regulated in the Minister of Finance Regulation No. PMK 234PMK.032009 dated 29 December 2009 regarding the Specific Sector for
Investment that Provide Income to the Exempted Pension Fund as Income Tax Object, the dividend from such share received or earned by pension fund which its establishment is legalized by the Minister of Finance on the limited liability company listed at IDX is exempted from the
Income Tax Object. Based on Article 261a PPh Law No. 36 year 2008, dividend paid, or made available to be paid, or due for its payment by the Company to the
Foreign Tax Payer WPLN, is deducted with the Income Tax 20 of gross income by the Company, or lower tariff in case the payment is transferred to the citizen of a country which has signed the Avoidance of Double Taxation Agreement P3B with Indonesia.
In order that the stipulation as in P3B applied to WPLN, therefore in accordance with Regulation of Directorate General of Taxation DJP No. PER-24PJ2010 dated 30 April 2010 regarding Amendment to DJP Regulation No. PER-61PJ2009 regarding the Procedure of Application on
Approval of Avoidance for Double Taxation, WPLN is required to attach certificate of Domicile for Non Resident for Indonesia Tax Withholding, the followings:
i. Form DGT 1 for other than WPLN as mentioned under no.2. ii. Form DGT 2 for WPLN bank; WPLN who receives or earns income via Custodian with regard to the income derived from transfer share
transaction or mutual fund transaction or reported in Indonesian capital market aside from interest and dividend; and WPLN in the form of pension fund which its establishme
nt is in accordance with the laws in Indonesia’ P3B partners and is a taxation subject in Indonesia’s P3B partners.
iii. SKD Form which is common to be legalized or issued by Indonesia’s P3B partner can be utilized in case there is an authorized person in
partn er’s country is not willing to sign Form-DGT 1Form-DGT 2. SKD Form is issued in English and must meet other requirement as
mentioned under Article 44 PER-24PJ2010. DGT 1 FormDGT-2 Form should be signed WPLN who receives income which is attached on SK
D Form of P3B country’s partner. Aside from requirements of Form DGT-1 or Form DGT-
2 or SKD Form of P3B country’s partner, as in line with DJP Regulation No. PER- 25PJ2010 dated 30 April 2010 regarding Amendment of DJP Regulation No. PER-62PJ2009 regarding Prevention on Misuse of Approval of
Double Tax Avoidance, WPLN dividend receiver shall meet the beneficial owner requirement, as follows: i.
Company establishment or structure managementtransaction scheme is not merely addressed for P3B utilization; and ii. Business activity runs by its own management which has sufficient authority to conduct transaction; and
iii. Company has employee; and iv. Own an active activity or business; and
v. Income from Indonesia with tax payable in the receiver’s country; and
- 115 - vi. Not using more than 50 of its total income to meet its obligation to other party in the form of : interest, royalty, or other reward to the
employee which is given properly in relation to the working relationship and other expenses normally disbursed in running its business and profit share in form of dividend to the shareholders.
Fulfillment of Taxation Obligation
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