As the public’s income increased, the funds collected by banks through deployment devices and in the form of deposits, savings, and Bank Indonesia Certificates (SBI) are improving. Thus, there is a need for adjusted regulations on the imposition of Income Tax on interest and discounts.
Tax Subject
Article 4(2) Income Tax is imposed on individuals, corporations, institutions, or organizations that receive income in the form of Bank Indonesia Certificates (SBI) discounts.
Below is the list of those not included as subjects of the Article 4(2) Income Tax:
Domestic individual tax subject whose income for 1 (one) tax year, including interests and discounts, does not exceed Non-Taxable Income;
Banks established in Indonesia or is a branch of foreign banks in Indonesia; and
Pension funds whose establishment has been approved by the Minister of Finance as long as the funds are obtained from income sources as intended in Article 29 of Law Number 11 of 1992 concerning Pension Funds based on an Exemption Certificate issued by the Information System of the Directorate General of Taxes or the Tax Service Office where the Pension Fund is registered as Taxpayers.
Tax Withholder
The withholder is Bank Indonesia as the issuer of SBI as well as bank and/or pension funds that resell SBI.
Tax Object
Article 4(2) Income Tax is imposed on income in the form of SBI discounts. An exemption is given for SBI discounts with the principal amount not exceeding IDR7,500,000 and is not a split amount.
SBI is securities denominated in Rupiah issued by Bank Indonesia as recognition of short-term debt as intended in the provisions governing Monetary Operations.
SBI Discounts are the excess difference between:
nominal value of SBI at the due date with the cash value of SBI acquisition; or
cash value of SBI sales with cash value of SBI acquisition.
Tax Base
The imposition basis for Article 4 (2) Income Tax is income in the form of SBI discounts, which is the received or acquired gross amount from SBI.
Tax Rate
SBI discounts are imposed with a final Income Tax with rates as such:
20% of the gross amount for domestic taxpayers and permanent establishment;
20% of the gross amount of rate based on the applicable Tax Treaty for foreign taxpayers
Due Date
Article 4(2) Income Tax on income in the form of SBI discounts is payable at the time the SBI matures or when the SBI is resold by Banks or Pension Funds.
Withholding Tax Procedure
Article 4(2) Income Tax on SBI Discounts is withheld by Bank Indonesia on income in the form of discounts received or obtained by parties other than Banks and Pension Funds, which has been ratified by the Minister of Finance or the Indonesia Financial Services Authority by the time the SBI matures.
In the case of Banks or Pension Funds which has been ratified by the Minister of Finance of the Indonesia Financial Services reselling the SBI to parties other than Banks or Pension Funds, Banks or Pension Funds are obligated to withhold Article 4(2) Income Tax by the time of selling.
During the development of this article, there are no specific regulations addressing the withholding tax procedure for Article 4(2) Income Tax on SBI discounts.
Tax Payment Procedure
The withholder of Article 4(2) Income Tax is required to pay the tax to the Post Office or a bank appointed by the Minister of Finance, no later than the 10th (tenth) of the following month after the month the tax withholding is made.
If the tax payment due date coincides with a holiday including Saturday, Sunday, national holidays, days off for holding the General Election, or national collective leave, the payment can be made on the next working day.
The payment is made using a Tax Payment Slip with the tax account code 411128 and the payment code 404 for Final Income Tax on SBI discounts.
Tax Filing Procedure
The withholder of Article 4(2) Income Tax must report the income tax withheld in the monthly Article 4(2) Final Income Tax return by no later than the 20th (twentieth) days after the tax period ends.
If the filing due date of the monthly Article 4(2) Final Income Tax return coincides with a holiday including Saturday, Sunday, national holidays, days off for holding the General Election, or national collective leave, the filing can be made on the next working day.
For individuals that receive SBI discounts which have been withheld with Article 4(2) Income Tax, they will be obligated to file income in the form of SBI discounts and withheld Article 4(2) Income Tax on their Annual Income Tax Returns maximum by 3 (three) months after the end of a tax year.
For corporate taxpayers that receive SBI discounts which have been withheld with Article 4(2) Income Tax, they will be obligated to file income in the form of SBI discounts and withheld Article 4(2) Income Tax on their Annual Income Tax Returns on Attachment IV maximum by 4 (four) months after the end of a tax year.
Example of Article 4(2) Income Tax on Bank Indonesia Certificates Discount
Pension Funds from Bank Plat Merah, of which its establishment has been ratified by the Minister of Finance, bought an SBI from Bank Indonesia with a value of IDR1,000,000,000 and receives a 6,5% discount (IDR65,000,000). Thus, Pension Funds from Bank Plat Merah will only need to pay IDR935,000,000.
Before its due date, Pension Funds from Bank Plat Merah resells the SBI to Mr. William for IDR950,000,000. How much tax should be withheld on that transaction?
The amount of SBI discount received by Pension Funds from Bank Plat Merah is IDR950,000,000 - IDR935,000,000 = IDR15,000,000
Withheld Article 4(2) Income Tax: Rate x SBI Discount Gross Amount
Withheld Article 4(2) Income Tax = 20% x IDR15,000,000
Withheld Article 4(2) Income Tax = IDR3,000,000
Thus, Pension Funds from Bank Plat Merah should withhold Article 4(2) Income Tax with an amount of IDR134,000,000.
Legal Basis:
Law Number 7 Year 1983 regarding Income Tax as lastly amended by Law Number 7 Year 2021 regarding Harmonization of Tax Regulations
Government Regulations Number 123 Year 2015 on Adjustments on Government Regulations Number 131 Year 2000 regarding Income Tax on Deposit Interests and Bank Indonesia Certificate Discounts
The Minister of Finance Regulations Number 212/PMK.03/2018 regarding Income Tax Withholding on Deposit Interests and Bank Indonesia Certificate Discounts
The Director General of Taxes Regulation Number PER-03/PJ/2020 regarding Procedures for Issuing Tax Exemption Certificates on Income Tax Deductions on Deposit Interest and Savings and Bank Indonesia Certificates Discounts Received or Obtained by Pension Funds whose Establishment Has Been Approved by the Minister of Finance or Has Obtained Permission from the Indonesian Financial Services Authority
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