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Jakarta, Ideatax -- Recently, a comedian shared his story when dealing with taxation issues. The comedian mentioned that he had received three "love letters" from tax officials regarding his income from Google AdSense. He also explained that he only received income from YouTube AdSense in 2018. After that, he never received income from YouTube again (Rachman, 2023). The comedian's upload also received various comments, one of which was from the Indonesian Directorate General of Taxes. The Admin of the Directorate General of Taxes advised the artist to confirm with the Account Representative where he is registered (Indraini, 2023).
Indeed, recently, DGT has been promoting tax supervision for social media celebrities. In fact, on one occasion, the previous Director of P2Humas, Mr. Neilmadrin Noor, stated that as taxpayers, YouTubers or artists are obliged to perform their tax obligations. So, what exactly is the procedure for implementing the rights and obligations of social media activists? Through this article, we will discuss it thoroughly.
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In general, there are no rules that specifically regulate taxation provisions for YouTubers, TikTokers or other over the top (OTT) media service activists. Thus, in practice, content creators and social media activists can be equated with art workers (KLU 90002) in accordance with Directorate General of Taxes Regulation Number 17 of 2015 concerning Net Income Calculation Norms. For information KLU 90002 also includes the activities of art workers such as novelists, story writers, other authors, actors, singers, playwrights, dancers and other stage artists. This includes radio, television and film producers, painters, cartoonists and sculptors.
Procedure of calculation
The provisions of Perdirjen Number 17 of 2015, among others, regulate that the net income norm for the income of art workers is 50% of gross circulation. Thus, to calculate taxable income, the gross income received by art workers is multiplied by 50% and then multiplied by the Income Tax Article 17 rate.
For example, a YouTuber earns an income from YouTube of IDR 120 million in a year. The YouTubers are unmarried and do not have dependents. For this income, YouTube has not deducted income tax. Based on this, the amount of tax that must be paid by the YouTubers is as follows:
Gross income = IDR 120,000,000
Net income (50% x IDR 100,000,000) = IDR 60,000,000
Non-taxable income (TK/0) = IDR 54,000,000
Taxable income (IDR 60,000,000 – 54,000,000) = IDR 6,000,000
Income Tax (5% * IDR 6,000,000) = IDR 300,000
The abovementioned income must be reported by taxpayers in the Individual Income Tax Return before March 31 of each year using form 1770.
Is YouTubers' Income subject to Final Income Tax?
Some taxpayers may experience confusion as to whether or not the income of YouTubers and other social media activists of less than 4.8 billion in a year is subject to income tax according to article 17 or subject to final income tax according to Government Regulation (hereinafter referred to as PP) number 46 of 2013 in accordance with PP 23 of 2018. PP Number 46 of 2013 in accordance with PP 23 of 2018 generally regulates that taxpayers who have a certain gross turnover of less than 4.8 billion in a year are subject to Final Income Tax of 0.5% of gross turnover.
However, PP No. 46 of 2013 in accordance with PP No. 23 of 2018 also regulates that there are several incomes that are exempted from the imposition of Final Income Tax on certain business turnover, including income received or obtained by individual taxpayers from services in connection with independent work.
PP 46/2013 in accordance with PP 23/2018 regulates that services related to free work as above, among others, include musicians, hosts, singers, comedians, movie stars, soap opera stars, advertising stars, directors, film crew, photo models, exhibitors, dramatists and dancers. Therefore, if the profession of YouTubers and social media activists is included in the definition of artistic workers such as musicians, hosts and so on, then the income received is not subject to Final Income Tax on certain business circulation as regulated by PP 46/2013 in accordance with PP 23/2018, but is subject to Final Income Tax Article 17 as explained above.
Optimization of YouTubers' Income Tax
Based on the We Are Social report, we know that the number of YouTube users in Indonesia in 2023 is 139 million. This means that half of the population in Indonesia owns and uses a YouTube account. Seeing the magnitude of the potential income tax on YouTubers' income, there are basically several things that can be done by the government. First, the government, the Ministry of Finance in this case, needs to clarify the definition of YouTubers and social media activists who spread their content through social media platforms. This is important considering that so far YouTubers and other social media activists have been equated with art workers who may be substantially different which causes the net income norm to be different.
For example, dancers and artists who perform in a performance hall require transportation and mobility costs to attend the performance hall, so it is reasonable if the estimated net income received is 50%. However, for YouTubers who can broadcast their performances anywhere and anytime, the net calculation norms set could be irrelevant.
Second, the government can strengthen cooperation with Google, YouTube, TikTok or other social media platforms to obtain data on how much income received by Indonesian taxpayers. The obstacle faced by the tax authorities so far is the unavailability of data to determine how much income actually received by YouTubers and social media activists. So far, the government has only relied on self-assessment from taxpayers without any other comparative data as a means of check and balance.
References
Indraini, A. (2023, Oktober 16). 3 Fakta Soleh Solihun Ditagih Pajak Adsense Meski Tak Dapat Cuan dari YouTube. Retrieved from detik FInance: https://finance.detik.com/berita-ekonomi-bisnis/d-6984014/3-fakta-soleh-solihun-ditagih-pajak-adsense-meski-tak-dapat-cuan-dari-YouTube
Rachman, A. (2023, October 15). Begini Kisah Soleh Solihun 'Diburu' Petugas Pajak. Retrieved from CNBC: https://www.cnbcindonesia.com/news/20231015191659-4-480713/begini-kisah-soleh-solihun-diburu-petugas-pajak
We Are Social. (2023, Oktober 22). Digital 2023: Indonesia. Retrieved from We Are Social: https://datareportal.com/reports/digital-2023-indonesia
