Income Tax Provisions on Issuers Amended, Form of Share Ownership Report Determined

The government amends the provisions regarding Income Tax for taxpayers of publicly listed companies or whose shares are traded on the Indonesian stock exchange.

The amendments are contained in Minister of Finance Regulation (PMK) Number 40 of 2023 which also revokes the previous provision, namely PMK Number 123/PMK.03/2020. This new regulation comes into force from the date of promulgation, namely on 13 April 2023.

There are two changes contained in the new regulation. First, confirmation regarding the corporate income tax rate as it applies to start in 2022, as stipulated in Law Number 7 of 2021, which is 22%, which in the previous regulation still stated 20%.

Second, regarding the administrative obligations of publicly listed companies that want to get an income tax deduction of 3% of the corporate income tax rate in Law Number 7 of 2022.

Read: Income Tax Regulation for Listed Companies Released

The requirements to obtain the corporate income tax reduction facility include:

First, it must be a public company.

Second, the number of paid-up shares traded on the stock exchange must be at least 40%.

Third, it meets certain other requirements, such as:

1. 40% of the shares traded on the stock exchange must be owned by at least 300 parties, excluding companies that buy back and have special or affiliated relationships.
2. These parties may only own shares below 5% of the total paid-up shares.
3. The first and second conditions must have been met within a minimum of 183 calendar days within 1 tax year.
4. The company is required to submit monthly reports and affiliated share ownership reports to the Directorate General of Taxes

Monthly Report

There are two types of reports that must be submitted monthly by public companies or issuers and attached to the Annual Income Tax Return.

First, the monthly report on share ownership of issuers or public companies and the recapitulation that has been reported by the Securities Administration Bureau. Second, monthly reports on share ownership of issuers that organize securities administration.

The monthly report must include the Taxpayer's Name, Taxpayer Identification Number (NPWP), Tax Year, as well as a statement of eligibility.

Form of Share Ownership Report

In the new regulation, the government emphasizes the form of affiliated share ownership reports. The form of the report must comply with the format listed in the attachment to the policy and it contains a number of information such as:
a. Taxpayer's name
b. Tax ID number
c. Tax year;
d. Name of shareholder affiliated with taxpayer
e. Tax ID number of shareholders affiliated with WP
f. Shareholders' special relationship with taxpayer
g. Type of control with taxpayer
h. The number of shareholdings owned by affiliated parties
i. Percentage of share ownership by affiliated parties.

Note that if the monthly report submitted by the Securities Administration Bureau does not comply with this provision, the taxpayer must submit the report himself according to a predetermined form.

OJK Must Submit the Issuer's Data

In this regulation, the government also asks the Financial Services Authority (OJK) to submit a list of issuer taxpayers who meet the requirements to obtain the Corporate Income Tax facility.

Some of the information that must be included in the list, at least contains:
a. Tax Year
b. Name of the issuing taxpayer
c. Tax ID number of the issuer
d. Name of Securities Administration Bureau;
e. Tax ID number of the Securities Administration Bureau;
f. Number of shareholder Parties less than 5%
g. Percentage of share ownership of parties that own shares below 5%
h. Number of days in one fiscal year that meets the requirements.

The list of issuers must be submitted electronically through an application provided by DGT, no later than the end of each month after the tax year ends.

However, if electronic means are not yet available, OJK can submit the report in writing. (ASP/KEN)