Dividend Facilities Exempted from Income Tax (PPh)

To encourage investment growth in the financial market and real sectors in Indonesia, the government has implemented a policy to exempt dividends from taxes — in other words, dividends received are not subject to Income Tax (PPh).

There are several terms and conditions to enjoy this facility in accordance to UU No. 11 Year 2021 (Cipta Kerja). The requirements for tax-exempted dividends are as follows:

1. Dividends received must be reinvested in Indonesia. Investments can be made in the forms of bonds, equities of companies established in Indonesia, stocks, deposits, and others (PMK No. 18 Year 2021 Articles 34 & 35).
2. Investments must be made no later than 3 years since the dividen payouts (PMK No. 18 Year 2021, Article 36).
3. Investments must be properly reported in the Annual Tax Return (SPT).
4. Annual investment report must be filed through the official website of Directorate General of Taxes.

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