Tax procedure on dividends paid to foreigners eased<\/p>\n
JAKARTA (JP): The government has eased the procedure for the
\ncollection of the withholding tax imposed on dividends paid by
\npublicly listed companies to their foreign shareholders whose
\nhome countries have double taxation agreements with Indonesia.<\/p>\n
Custodians representing the foreign shareholders of the
\npublicly listed companies, under the new procedure, are no longer
\nrequired to obtain an exemption letter from the local tax office.
\nPreviously, such a letter was a requirement to qualify for an
\nincome withholding tax assessment.<\/p>\n
The simplification was issued in response to a letter from the
\nchairman of the Capital Market Supervisory Agency, who argued
\nthat the requirement to obtain an exemption letter from the tax
\noffice often delayed or hindered the distribution of the
\ndividends to foreigner shareholders.<\/p>\n
The new procedure will be effective beginning next month.<\/p>\n
Under the existing regulation, the tariff of the withholding
\ntax imposed on dividends is set at 20 percent of their gross
\nvalue. But the tariff for foreigners whose countries have signed
\na double taxation treaty with Indonesia could be adjusted to
\nthose applied in their own countries, which usually results in
\ntax obligations lower than the standard 20 percent.<\/p>\n
Under the old procedure, local custodians handling the
\ninterests of foreign shareholders of publicly listed companies
\nshould first obtain an exemption letter from the local tax office
\nin order to obtain lower tax assessments.<\/p>\n
Tax Director General Fuad Bawazier said yesterday that the
\nsimplification of the procedure is essential in encouraging
\nforeign investors' trading activities on the local stock market.<\/p>\n
Fuad said that custodians, under the new procedure, are
\nrequired only to provide a letter of notification about the
\ndomiciles of foreign shareholders of publicly listed companies,
\nwhich have been authorized to collect the withholding tax.<\/p>\n
If the information about the domiciles of the foreign
\ntaxpayers is misleading or manipulated, the custodians would be
\nsanctioned according to the existing regulation, Fuad said. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/tax-procedure-on-dividends-paid-to-foreigners-eased-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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