- November 22, 2019
- Posted by: admin
- Category: Daily News
- President Joko “Jokowi” Widodo’s omnibus law bill will introduce sweeping tax reforms ranging from reduced income and value-added taxes and zero tax on dividends to lower non-resident taxes and a so-called Netflix tax, Finance Minister Sri Mulyani Indrawati announced on 22 Nov 19.
- The minister said the omnibus law will revise the current tax code, income tax law, value-added tax law and regional tax and retribution law.
- The new law will cut corporate income tax to 22% in 2021 and 2022 from 25% today. The tax will be lowered again to 20% from 2023 onward.
- Companies that go public for the first time in 2021 and the years after will get a further discount of 3% for five years on their income tax.
- Corporate or individual shareholders will no longer be required to pay tax on dividends they receive from local companies, Sri Mulyani said. Today, the tax office takes a 10% cut for the state on any dividend.
- Indonesia’s new tax code will also recognize the economic presence of digital companies like Netflix or game distributor Steam – and tax them.
- Even if these companies do not have a subsidiary registered in Indonesia, they would still have to “collect, pay and report value-added taxes to our tax authority here,” Sri Mulyani said.
- The government will also modify how expatriates in Indonesia and the Indonesian diaspora pay their tax. “Anyone who receives dividends from abroad will not have to pay tax on them, as long as they invest the dividends here,” Sri Mulyani said.
- Sri Mulyani said the government will also adjust how the tax office imposes tax deduction and tax fines to benefit businesses.
- Under the new tax policy, the government will let local companies that make purchases from small businesses to claim the deduction, up to 80% of the full-claim amount.
- The government will also redefine the jurisdiction of local government when imposing local taxes or retributions. Sri Mulyani said all new regional regulations on taxation will need approval from the president.
External Link : https://jakartaglobe.id/business/netflix-tax-zero-dividend-tax-among-indonesias-new-sweeping-tax-reforms