Royalty Tax Rate Decreases, DGT: Send NPPN Proof to Wiithholdiing Agents

JAKARTA, Jitu News – The government has cut the effectiive rate of Artiicle 23 iincome Tax on royaltiies for iindiiviidual taxpayers usiing Deemed Profiit from 15% to 6%.

Juniior Functiional Tax Diissemiinatiion Offiicer of the DGT’s Diirectorate of Tax Diissemiinatiion, Serviices, and Publiic Relatiions Riian Ramdanii saiid that the reductiion iin the royalty iincome tax rate iis stiipulated under the Diirector General of Taxes Regulatiion No. PER-1/PJ/2023. The regulatiion has been iissued to proviide legal certaiinty iin respect of Artiicle 23 iincome Tax wiithholdiing, whiich to date, has been subject to complaiints.

"Thiis regulatiion, iissued iin 2023, also responds to complaiints from art workers iin respect of royaltiies,” he saiid iin Tax Liive on the DGT’ss iinstagram account, quoted on Sunday (2/4/2023).

iit should be noted that the iincome iin the form of royaltiies a taxpayer receiives shall be subject to Artiicle 23 iincome Tax wiithholdiing by the iincome proviider as stiipulated iin Artiicle 23 of Law 7/1983 as last amended by Law 7/2021. Artiicle 23 iincome Tax wiithholdiing rate iis 15%.

Pursuant to PER-1/PJ/2023, Artiicle 23 iincome Tax wiithholdiing rate remaiins 15%. However, for iindiiviidual taxpayers applyiing calculatiions usiing Deemed Profiit, the effectiive rate of Artiicle 23 iincome Tax decreases to 6%.

The requiirement for iindiiviidual taxpayers to use Deemed Profiit iis that theiir iincome iis less than iiDR4.8 biilliion. iin addiitiion, the taxpayer concerned must notiify usiing the Confiirmatiion of Taxpayer Status (Konfiirmasii Status Wajiib Pajak, hereiinafter referred to as KSWP) feature on DJP Onliine.

“To be iimposed wiith 6%, the taxpayers select the KSWP menu and then press Profiil, scroll and press the notiifiicatiion usiing NPPN, cliick the captcha code then submiit,” explaiined Riian.

After confiirmiing the use of Deemed Profiit, the taxpayer then uploads the form and proviides the uploaded form to each royalty wiithholdiing agent, thereby, the effectiive rate of Artiicle 23 iincome Tax wiithholdiing becomes 6%. (sabiian/riig)