Remember, P2P Lending Organizers Must Create Income Tax Deposits

JAKARTA, DDTCNews - Peer-to-peer (P2P) lending service providers based on information technology must issue income tax withholding evidence (bupot PPh). This topic is one of the discussions in the national media today, Friday (May 13, 2022).

According to Article 3 paragraph (4) of PMK PMK 69/2022, P2P lending providers are designated to withhold PPh on the interest income received by lenders from borrowers.

"P2P lending service providers... must issue income tax withholding evidence and provide such evidence to lenders," reads part of Article 4 paragraph (1) letter a PMK 69/2022.

P2P lending providers can issue one bupot PPh for all interest payment transactions received by one lender in one tax period.

The referred P2P lending providers are those who have obtained permission and/or are registered with the Financial Services Authority (OJK). Withholding PPh is applicable to Article 23 PPh and Article 26 PPh.

For Article 23 PPh, the withholding rate is 15% of the gross amount of interest if the lender is a domestic taxpayer and a Non-Taxable Subject (BUT). If the lender is a foreign taxpayer other than BUT, the withholding rate for Article 26 PPh is 20% of the gross amount of interest or as stipulated in the P3B.

Furthermore, for interest payments to lenders that have been subject to withholding tax by the P2P lending providers, there is no further withholding tax by the borrowers.

In addition to the obligation to issue bupot PPh by P2P lending providers, there are also discussions related to the bundling of tax invoices for deliveries to end consumers by Retail Taxable Enterprises (PKP pedagang eceran). There are also discussions related to non-taxable turnover for individual taxpayers of Micro, Small, and Medium Enterprises (UMKM).

This is the complete news review.

Payment and Reporting

Apart from issuing bupot, P2P lending providers are also required to deposit Article 23 PPh and Article 26 PPh that have been withheld to the state treasury. P2P lending providers are also required to report the withholding of Article 23 PPh and Article 26 PPh in the Monthly Tax Return (SPT Masa PPh).

The procedures for issuing bupot PPh, depositing the withheld PPh, and reporting the Monthly Tax Return (SPT Masa PPh) are carried out in accordance with the provisions of tax regulations. (DDTCNews)

Loan Interest Lenders receive income in the form of loan interest paid by borrowers through P2P lending providers. This interest income must be reported in the Annual Tax Return of the lenders.

Interest

received by P2P lending providers from borrowers is not considered as income for the P2P lending providers.

The interest paid by P2P lending providers to lenders is not considered an expense and cannot be deducted from gross income in determining the taxable income of the P2P lending providers. (DDTCNews)

Bundling of Tax Invoices Tax invoices

bundled for deliveries to end consumers by taxable entrepreneurs (PKP) retail traders are not tax invoices that must be uploaded on the 15th, as regulated in Article 18 paragraph (1) of PER-03/PJ/2022.

"Maximum upload on the 15th of the following month is only for output tax invoices, while deliveries to end consumers or deliveries by PKP retail traders using bundled tax invoices are not included," wrote the Twitter account @kring_pajak in response to netizens' questions. (DDTCNews)

Non-Taxable Turnover for UMKM Individual Taxpayers

The Directorate General of Taxes (DGT) reaffirms that transfer or refund requests can be submitted if Micro, Small, and Medium Enterprises (UMKM) individual taxpayers have mistakenly submitted final income tax (PPh final) PP 23/2018 while still having turnover below IDR 500 million.

If the payments have been made from January to March 2022, UMKM individual taxpayers can apply for transfer or refund for the tax period.

"Then, if in April the gross turnover has not exceeded IDR 500 million, there is no need to submit 0.5% final income tax for the gross turnover received," tweeted the account @kring_pajak. (DDTCNews)

Tax Incentives

Vice Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Sarman Simanjorang requests the government not to discontinue tax incentives in the near future. He urges the continuity of incentives until the economy fully recovers.

Some sectors of businesses have started to recover after being affected by the Covid-19 pandemic. However, business players still need support from the government, especially those in the Micro, Small, and Medium Enterprises (UMKM) sector. (Kontan) (kaw)