Dividend
A Dividend is a share of profits distributed to shareholders in proportion to their ownership. Under the Income Tax Law, dividends are taxable income unless specified conditions are met. Governed by Article 4 paragraph (1)(g) and Article 4 paragraph (3)(f) of the Income Tax Law, and Government Regulation No. 9/2021. Dividends received by individual residents from domestic companies are subject to 10% final tax. Dividends received by domestic corporate taxpayers from at least 25% ownership are excluded from taxable income. Foreign dividends are excluded if reinvested in Indonesia within the prescribed period.
This article is for education, not tax advice.
Example
Mr Andi holds 1,000 shares in PT XYZ. PT XYZ declares a Rp 500/share dividend. Andi receives Rp 500,000. PT XYZ withholds 10% final tax = Rp 50,000. Net received = Rp 450,000.
Source: Article 4 paragraph (1)(g) UU PPh No. 36/2008; PP No. 9/2021