Administrative Procedures and Guidelines for the Application of CIT Rate Reduction for Publicly Listed Taxpayers
- October 14, 2020
- Posted by: Administrator
- Category: Tax News
On 1 September 2020, the Minister of Finance (“MoF”) issued a new Regulation No. 123/PMK.03/2020 (“PMK-123”) which provides further administrative guidelines to enjoy the Corporate Income Tax (“CIT”) rate reduction for Publicly Listed Taxpayers registered in the Indonesia Stock Exchange.
This MoF Regulation is a supplement to the previous Government Regulation (i.e. PP-30 in conjunction with Perppu-1 of 2020 – “PP-30”) which stipulated that Publicly Listed Taxpayers may be entitled to a CIT rate reduction of 3%. In brief, PMK-123 provides further administration guidelines as follows:
- The Publicly Listed Taxpayer should submit the following reports:
- Monthly reports which outline the name of the taxpayer, Tax ID number, fiscal year and specific statement on the fulfillment of the administrative requirements which can be obtained from the Securities Administration Bureau or those who performs self-reporting, and
- Report of Shares Ownership by affiliated parties of the Taxpayers.
The appendices of PMK-123 provide the template of the above reports. Kindly note that the above reports should be attached along with the CIT return at the time of submission.
- A Taxpayer may enjoy the CIT reduction in fiscal year 2020 provided that it fulfills the following cumulative requirements:
- For early periods of 2020 until PP-30 came into force, at least 40% of the total shares are publicly traded in Indonesia, and the shares must be owned by a minimum of 300 parties and the ownership of each shareholder shall be less than 5% of the total issued shares; and
- After PP-30 came into force, the above shares shall not be repurchased by the issuer and/or its affiliated parties; and
- These requirements must be fulfilled for at least 183 calendar days of a fiscal year.
- Please be aware that PMK-123 also defines Affiliated Party of a Publicly Listed Taxpayer based on the definition in the prevailing Income Tax Law, but limited to the controlling shareholder and/or main shareholders under the definition of the Indonesian Capital Market Law and regulations.
This MoF Regulation came into force on 2 September 2020.