As a way to increase the effectiveness and efficiency of Income Tax imposition of Government Treasury Bond Discounts (“SPN”), as well as provide convenience and explanation for the public in the case of taxation on SPN, then it is worthy to note the need to reregulate the imposition of Income Tax on SPN Discounts to strengthen its legal basis, including its legal certainty, fairness, and usefulness, during its implementation so that it follows the principles mentioned in the Income Tax Law.
Tax Subject
Article 4(2) Income Tax is imposed on Taxpayers who receive income in the form of Government Treasury Bond Discounts.
The list below mentions those not part of the Article 4(2) Income Tax subject:
Banks established in Indonesia or a foreign bank branch in Indonesia
Pension Funds of which its establishment is ratified by the Ministry of Finance
Mutual Funds that are registered in the Capital Market and Financial Institutions Supervisory Agency, for 5 (five) years since their initial establishment or business license.
Tax Withholder
Income Tax withholding is done by:
SPN issuer or appointed custodian as the payment agent, on SPN Discounts received by SPN holder during its maturity date, or
Broker or banks as the intermediary or as the buyer, on SPN Discounts received in the Secondary Market.
Tax Object
Article 4(2) Income Tax is imposed on several incomes received by Taxpayers in the form of SPN Discounts, imposed with final income tax.
National Debt Certificates are securities in the form of debt acknowledgment letters, both in Rupiah or in foreign currency, where it is guaranteed by interest payment and principals by the Republic of Indonesia following its validity period, consisting of Government Treasury Bonds and Government Bonds.
Government Treasury Bonds are National Debt Certificates with a validity period of 12 (twelve) months with a discounted interest payment.
Tax Basis
The basis imposition for Article 4(2) Income Tax for income in the form of SPN Discounts are the excess difference between:
Nominal value during its maturity date with the acquisition price in the Primary or Secondary Market, or
Selling price in the Secondary Market with the acquisition price in the Primary or Secondary Market
This does not include withheld Income Tax
Tax Rate
SPN Discounts are imposed with Final Income Tax with the following rates:
20% of the total gross for Domestic Taxpayers and Permanent Establishments, and
20% of the total gross or rate based on the applicable Tax Treaty for Foreign Taxpayers
Tax Due Date
Article 4(2) Income Tax on SPN Discounts is payable on:
During interest and discount transactions received by Bond seller
During the maturity date of the Interest Bond on interest and/or discounts received by interest-bearing Bondholder
During the maturity date of Interest on Discounts received by non-interest bearing Bondholder
Withholding Tax Procedure
Withholding of Article 4(2) Income Tax is done by:
SPN issuer or appointed custodian as the payment agent, on SPN Discounts received by SPN holder during its maturity date, or
Broker or banks as the intermediary or as the buyer, on SPN Discounts received in the Secondary Market
Broker, banks, pension funds, and mutual funds as the SPN buyer without intermediaries, on Discounts received or obtained by SPN seller during transactions in the Secondary Market.
The SPN seller is obligated to inform the Tax Withholder of the actual SPN acquisition price for Discount calculation, which will be the Income Tax basis.
If the seller does not inform the withholder regarding said information, then income in the form of SPN Discounts that are not informed or not informed completely will be imposed with Income Tax in the year in which the incomplete information is discovered, with additional administrative sanctions in the form of interests.
Tax Payment Procedure
The Income Tax withholder is required to pay the Income Tax to the Post Office or a bank appointed by the Minister of Finance, no later than the 10th (tenth) day of the following month after the month the tax withholding is made.
The payment is made using a Tax Payment Slip with the tax account code 411128 and the payment code 401 for Final Income Tax on Interest Bonds of the National Debt Certificates.
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.
Tax Filing Procedure
Article 4(2) Income Tax withholder must report the income tax withheld and paid in the monthly unified tax return by no later than the 20th (twentieth) day after the tax period ends.
If the filing due date of the 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.
Individuals who receive the Article 4(2) Income Tax withheld SPN Discount will be required to file Income in the form of SPN Discounts and the withheld Article 4(2) Income Tax on the Individual Taxpayers Annual Tax Returns by 3 (three) months after the end of the Tax Year.
Corporates that receive the Article 4(2) Income Tax withheld SPN Discount will be required to file Income in the form of SPN Discounts and the withheld Article 4(2) Income Tax on Attachment IV of the Corporate Taxpayers Annual Tax Returns by 4 (four) months after the end of the Tax Year.
Calculation Example of Article 4(2) Income Tax on Government Treasury Bond Discounts
Illustration 1
On 1 May 2024, Government X (issuer) issued a Government Treasury Note with the following information:
Nominal value of IDR100,000,000
SPN validity period of 12 months (Maturity date which falls on 1 May 2024)
PT D (investor) during the initial issuance bought said SPN at the price of IDR94,000,000
PT D holds on to the SPN even until its maturity date
Discount and Final Income Tax calculation, which is payable by PT D during the SPN’s maturity date is as follows:
Discount = IDR100,000,000 - IDR94,000,000 = IDR6,000,000
Final Income Tax = 20% x IDR6,000,000 = IDR1,200,000
Withheld by the issuer or appointed custodian as the payment agent.
Illustration 2
PT D does not hold on to said SPN until its maturity date, but rather sold the entire SPN to PT M on 1 July 2023 in the Secondary Market, through the Securities Company PT X with a selling price of IDR95,000,000.
The Discount and Final Income Tax calculation which is payable by PT D during the SPN’s selling period on 1 July 2023 is as follows:
Discounts = IDR95,000,000 - IDR94,000,000 = IDR1,000,000
Final Income Tax = 20% x IDR1,000,000 = IDR200,000
Withheld by PT X Securities as the intermediary.
Illustration 3
On 1 August 2023, PT M sold the entire Government Treasury Bond that it owns to the ABC Pension Funds, which is already ratified by the Minister of Finance, directly without intermediaries at the price of IDR97,000,000.
The Discount and Final Income Tax calculation which is payable by PT M during the SPN’s selling period on 1 August 2023 is as follows:
Discounts = IDR97,000,000 - IDR95,000,000 = IDR2,000,000
Final Income Tax = 20% x IDR2,000,000 = IDR400,000
Withheld by Pension Funds as the SPN buyer.
Additional information: Even though the SPN transaction is not done through intermediaries, Pension Funds as the buyer are required to withhold the tax. The same provision is applied in the case of direct buying done by Securities, Banks, and Mutual Funds as the investor.
Illustration 4
On 1 December 2024, ABC Pension Funds sold their entire Government Treasury Bond to PT Y with a selling price of IDR98,000,000.
The Discount received by ABC Pension Funds during the SPN’s selling period on 1 December 2023 is as follows:
Discounts = IDR98,000,000 - IDR97,000,000 = IDR1,000,000
In this case, there is no payable Income Tax on SPN Discounts because ABC Pension Funds is considered as Taxpayers exempted from the withholding of Final Income Tax on SPN Discounts.
Illustration 5
On 1 May 2024, PT Y received a settlement from their entire SPN from Government X (issuer) with a settlement value following the nominal value of IDR100,000,000.
The Discount and Final Income Tax calculation which is payable by PT Y during the SPN’s maturity period on 1 May 2024 is as follows:
Discounts = IDR100,000,000 - IDR98,000,000 = IDR2,000,000
Final Income Tax = 20% x IDR2,000,000 = IDR400,000
Withheld by the appointed custodian as the payment agent.
Legal Basis:
Law Number 7 Year 1983 regarding Income Tax as lastly amended by Law Number 7 Year 2021 regarding Harmonization of Tax Regulations
The Government Regulation Number 27 Year 2008 regarding the Amendment on Government Regulations Number 11 Year 2006 regarding Income Tax on Government Treasury Bond Discounts
The Ministry of Finance Regulations Number 63/PMK.03/2008 regarding Procedures of Income Tax Withholding on Government Treasury Bond Discounts
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