Regulation Update
Fintech and Online Loans are New Targets for Government Taxation

MUC Tax Research Institute | Saturday, 09 April 2022

Fintech and Online Loans are New Targets for Government Taxation
Ilustrasi nasabah fintech. Pemerintah mulai memajaki fintech dan pinjaman online 1 Mei 2022 (Photo: Andrea Piacquadio/Pexels)

Starting 1 May 2022, the government will make technology-based financial service or financial technology (Fintech) transactions a new target for the imposition of Value Added Tax (PPN) and Income Tax (PPh). VAT will be charged on every Fintech transaction at 11%.

Meanwhile, income tax will target the loan interest received by providers of Peer to Peer Lending, with rates adjusted to the lender's criteria.

If the lender or recipient of the interest is a Domestic Taxpayer (WPDN) and a Permanent Establishment (BUT), then 15% of Income Tax Article (ITA) 3 is imposed.

Meanwhile, if the recipient of the loan interest is a Foreign Taxpayer (WPLN) and is a non-Permanent Establishment, then the final Income Tax Article 26 of 20% is imposed or adjusted to the Double Taxation Avoidance Agreement (P3B) or an inter-country tax treaty.

Read: Indonesia Officially Imposes Tax on Crypto Assets As of 1 May 2022

Policy Points VAT    Income Tax
Tax Object
  • Payment Service
  • Investment Transaction Settlement Services
  • Capital raising services (crowdfunding)
  • Online Insurance Services
  • Capital Market support service
  • Investment Management Services
  • Borrowing funds (Peer to Peer Lending)
  • Digital financial support services and other financial service activities
Online loan interest (Peer to Peer Lending)
Tax Rate 11%    
  • Domestic Taxpayers & Permanent Establishment : 15%
  • Foreign Taxpayers & non- Permanent Establishment : 20%*(or according to Tax Treaty)
Tax Base Value fees, commissions, merchant discount rates, or other rewards received by fintech service providers Gross amount on interest

Read: Rate Rises, Minister of Finance Releases List of 11 Transactions of Value Added Tax Object

This policy is based on the Minister of Finance Regulation (PMK) Number 69/PMK.03/2022 on Income Tax and Value Added Tax on the Implementation of Financial Technology, which is one of the implementations of the Law on Harmonization of Tax Regulations (HPP law).

Through this regulation, the government requires VAT-Registered Persons (PKP) who provide Fintech services to collect, pay and report VAT on every transaction they serve.

Specifically for Peer to Peer Lending service providers, the government provides additional tasks to withhold, pay, and report income tax on the interest on the interest loan obtained. With a note, the provider already has a permit or is registered with the Financial Services Authority (OJK).

However, the income received by the provider of peer-to-peer lending services, whether in the form of fees, commissions, ujrah, or other benefits, is not subject to income tax.

Peraturan Menteri Keuangan No. 69/PMK.03/2022 tentang Pajak Penghasilan dan Pajak Pertambahan Nilai atas Penyelenggaraan Teknologi Finansial


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