Direktorat Penyukuhan, Pelayanan, Dan Hubungan, Masyarakat, Kantor Pusat Direktorat Jenderal Pajak
Gedung B Lantai 15, Jl. Jenderal Gatot Subroto No 40-42, Jakarta Seletan, 12190
Tel: +6221 5225 139
(a) The capital gain from the sale of shares of publicly listed companies is subject to final tax at the rate of 0.1% from the selling price at the Indonesian Stock Exchange.
The capital gain from the sale of property (land and building) is subject to final tax at the rate of 5% from either the Land and Building Sale Value (NJOP) or the selling price, whichever is the highest.
(b) Dividends distributed to shareholders are not taxable in Indonesia if the following requirements have been met:
1. The dividend originates from the reserve of retained earnings; and
2. For a limited liability company, state-owned enterprise and regional government-owned enterprise that receives the dividend, the share ownership at the agency that provides dividend is a minimum of twenty five percent (25%) of the amount of paid-up capital.
The Indonesia tax authorities have tried hard over the past 12 months to increase taxpayer compliance and, as a result, have carried out more audits. This increase in audit activity has been criticised by tax professionals who argue that the reasons ...
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The Indonesia tax authorities have tried hard over the past 12 months to increase taxpayer compliance and, as a result, have carried out more audits. This increase in audit activity has been criticised by tax professionals who argue that the reasons behind making adjustments are not legitimate and are often only revenue-driven. This has led to an increase in tax disputes being heard before the courts.
The beginning of January saw the introduction of the fourth amendment to the income tax law. The new law included updated guidance on acceptable tax avoidance schemes, as well as a much-needed definition of beneficial owners. The other feature of the new tax law is the simplification of the withholding tax rates applicable for specified services in transactions between domestic taxpayers. In the past, the predominant rate was 4.5%. A limited number of services are subject to rates from 1.5% to 4%. The 2008 Income Tax Law specifies only a single rate of 2% for all designated services. January also saw the country's corporate tax rate cut from 30% to 28%. This cut is only a temporary measure and will be replaced by a permanent rate of 25% on January 1 2010. These cuts have been made as an incentive to attract foreign investment.
Another favourable development concerns the intercompany dividend exemption rules. Dividends received are exempt from tax, provided the dividend recipient has at least a 25% interest in the company paying the dividend. Previously the shareholder had to conduct an active business for the exemption to apply this condition is no longer required to be satisfied.
As with the rest of Asia, Indonesia has woken up to transfer pricing and is now cooperating with the Australian Tax Office to gain a greater perspective on how to implement guidelines effectively. A report is expected to be published in early 2010.
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