Tax Incentives for Taxpayers Listed on IDX

Tax Incentives for Taxpayers Listed on IDX

PPh - 08 Jun, 2023 09:06 WIB

Jakarta, Ideatax -- The IDX (2023) notes that the number of listed companies as of May 23, 2023 is 864 companies (IDX, 2023). This number increased by 77 companies compared to the same period the previous year. As of May 2022, the number of taxpayers listed on the exchange was 787 companies (IDX Channel, 2022).


During the period 2015 to 2023, Databoks (2023) recorded that, there was an increase in the number of taxpayers listing on the stock exchange. In 2015, for example, the number of taxpayers listing their shares on the stock exchange was 521 taxpayers. This number increased to 537 taxpayers in 2016 and 566 taxpayers in 2017. Details of the number of taxpayers listed on the stock exchange can be seen in the following graph:

 

Source: Databoks, 2023

Based on the graph above, it can be seen that the number of taxpayers listed on IDX has slightly increased during the period 2015 - 2023. In fact, incentives regarding the reduction of corporate income tax rates have been regulated since 2008 through Law Number 36 of 2008.

 

General Regulations

 Law Number 36 Year 2008 on the Fourth Amendment to Law Number 7 Year 1983 on Income Tax regulates that domestic taxpayers who list at least 40% (forty percent) of the total shares paid up and traded on the stock exchange in Indonesia and meet certain other requirements may obtain a rate of 5% (five percent) lower than the rate referred to in paragraph (1) letter b and paragraph (2a) which is regulated by or based on Government Regulations.

 

In 2021, this provision was amended by Law Number 7 of 2021 concerning Harmonization of Tax Regulations. Article 17 paragraph (2b) of the Harmonization of Tax Regulations Law regulates that domestic corporate taxpayers listed on the stock exchange whose total shares are paid up and traded on the stock exchange in Indonesia at least 40% (forty percent) and meet certain requirements can obtain a lower rate of 3% (three percent) of the corporate income tax rate.

 

Derivative Regulations

 As a follow-up to Article 17 paragraph (2b) of the Harmonization of Tax Regulations Law, the Government issued Ministry of Finance Regulation No. 40 Year 2023 concerning Forms and Procedures for Submitting Reports and Taxpayer Lists in order to fulfill the requirements for a reduction in income tax rates for domestic corporate taxpayers in the form of a public company.
PMK No. 40 Year 2023 regulates that domestic corporate taxpayers can obtain a lower rate reduction of 3% if they meet the following requirements:

  1. Taxpayer is a Public Company that lists its shares on the IDX.

  2. The number of shares of the Taxpayer paid up and traded in the stock exchange in Indonesia is at least 40% (forty percent).

  3. The number of shares is owned by at least 300 shareholders.

  4.  The shares are owned by the parties for a minimum of 183 days.

  5. Shares are owned by the parties for a minimum of 183 days.

  6.  Taxpayers report their shareholders to DGT.

Furthermore, Ministry of Finance Regulation Number 40 Year 2023 also regulates that taxpayers who repurchase their shares and taxpayers who have a special relationship with their shareholders are not included in the definition of taxpayers who can obtain a reduction in the corporate income tax rate. This provision can be found in Article 3 paragraph (3) of Ministry of Finance Regulation No. 40 Year 2023.

 

Regular Report

As mentioned above, one of the requirements for corporate taxpayers to obtain a reduced corporate income tax rate is to submit a report to the DGT. There are two forms of reports submitted to the DGT, namely Monthly Reports and reports on share ownership that have affiliated relationships. The form and procedure of reporting are regulated in Ministry of Finance Regulation Number 40 Year 2023.

 

In the event that the taxpayer who makes the report does not fulfill the requirements as stipulated in the Ministry of Finance Regulation Number 40, the taxpayer is subject to a corporate income tax rate of 22%. This Ministry of Finance Regulation Number 40 Year 2023 shall come into force on April 11, 2023.

 

 

Related Regulations

  • Law number 7 of 1983 concerning Income Tax as amended by Law number 7 of 2021 concerning Harmonization of Tax Regulations

  • Ministry of Finance Regulation Number 40 of 2023 concerning Forms and Procedures for Submitting Reports and Taxpayer Lists in the Context of Fulfilling the Requirements for Obtaining Reduced Income Tax Rates for Domestic Corporate Taxpayers in the Form of Public Companies

 

References

Databox. (2023, January 13). Number of Issuers on Indonesia Stock Exchange (2015-January 2023). Retrieved from Databoks: https://databoks.katadata.co.id/datapublish/2023/01/13/awal-2023-ada-833-emiten-di-bursa-efek-indonesia

 

IDX. (2023, May 23). Company Profile Recorded. Retrieved from Indonesian Stock Exchange: https://www.idx.co.id/id/perusahaan-tercatat/profil-perusahaan-tercatat/

 

IDX Channel. (2022, May 23). The Number of Companies Listed on the IDX Has Reached 787. Retrieved from IDX Channel: https://www.idxchannel.com/market-news/jumlah-perusahaan-terdaftar-listing-di-bei-sudah-mencapai-angka-787

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