The Indonesia Stock Exchange (IDX) closed its 2024 trading year on December 30. In his remarks, Inarno Djajadi, Chief Executive of Capital Market, Financial Derivative, and Carbon Exchange Supervision at the Indonesia Financial Services Authority, highlighted that the Indonesian capital market showed a positive trend throughout 2024. Despite various global and geopolitical uncertainties, the stock exchange remained resilient (Media Asuransi, 2024).
Additionally, the IDX reported that it maintained competitiveness compared to other regional stock exchanges. This resilience and competitiveness were reflected in the growing public interest in investing in the Indonesian capital market. By the end of 2024, the total number of investors in stocks, bonds, and mutual funds reached 14.84 million (Infobank News, 2024).
Notably, the IDX Composite closed up 43.33 points, or 0.62%, at 7,079.90, while the LQ45 index rose 1.52 points, or 0.18%, to 826.62 (Suara, 2024). So, what are the tax obligations associated with stock exchange transactions? This article will delve into the taxation aspects of stock exchange transactions, focusing on three main types: stock transactions, bond transactions, and mutual fund transactions.
The sale of shares on the stock exchange is subject to final income tax, as stipulated in Article 4 Section (2) of the Income Tax Law, amended by the Harmonization of Tax Regulations Law. Government Regulation Number 41 of 1994, amended by Government Regulation Number 14 of 1997, further regulates these provisions. According to these regulations, income from share sales transactions on the stock exchange is subject to a final income tax rate of 0.1% of the gross transaction value.
For founders' shares, an additional income tax of 0.5% of the share value at the time of the Initial Public Offering (IPO) is applicable. This provision replaced the previous rate of 5% for transactions before 1996.
Founder shareholders must pay this additional tax within a month after the new company's shares are traded on the stock exchange. Failure to do so will result in the income from the sale of founders' shares being taxed at the general rate specified in Article 17 of the Income Tax Law.
In addition to share sales, stock exchange transactions include dividend distributions, bond sales/purchases, and mutual fund sales/purchases. We will explore the taxation aspects of transactions on other stock exchanges in the next article. If you have any tax-related questions, Ideatax is here to help.
Relevant Provisions:
- Law of the Republic of Indonesia Number 7 of 1983 regarding Income Tax as amended by Law of the Republic of Indonesia Number 7 of 2021 regarding Harmonization of Tax Regulations.
- Government Regulation Number 41 of 1994 regarding Income Tax on Income from Share Sales Transactions on the Stock Exchange as amended by Government Regulation Number 14 of 1996.
References
- Infobank News. (2024, December 30). Investor Pasar Modal Tembus 14,81 Juta, Didominasi Kelompok Usia Segini. Retrieved from Infobank: https://infobanknews.com/investor-pasar-modal-tembus-1481-juta-didominasi-kelompok-usia-segini/#google_vignette
- Media Asuransi. (2024, December 30). Perdagangan Bursa Efek Indonesia Tahun 2024 Ditutup dalam Tren Positif. Retrieved from Media Asuransi: https://mediaasuransinews.co.id/market/perdagangan-bursa-efek-indonesia-tahun-2024-ditutup-dalam-tren-positif/
- Suara. (2024, December 30). Bursa Saham Indonesia Ditutup Menghijau di Perdagangan Terakhir 2024 . Retrieved from Suara News: https://www.suara.com/bisnis/2024/12/30/172922/bursa-saham-indonesia-ditutup-menghijau-di-perdagangan-terakhir-2024
