Gold-Related Services Subject to Tax Withholding, MSMEs Excluded

JAKARTA, DDTCNews – Minister of Finance Regulation (MoF Reg.) 48/2023 stipulates that remunerations in respect of services related to gold jewellery, gold bullion, non-solid gold jewellery and/or gemstones and/or other similar stones are Income Tax Objects subject to the withholding of Article 21 Income Tax or Article 23 Income Tax.

However, the withholding of Article 21 Income Tax or Article 23 Income Tax is excluded if the recipient of the remuneration for services are taxpayers that use the MSME final Income Tax scheme in exercising their Income Tax obligations.

“Income Tax on the remuneration in respect of services … is not withheld if the Taxpayers receiving or accruing the remuneration for the services constitute Taxpayers subject to final Income Tax pursuant to statutory tax provisions …”, reads a fragment of Article 9 letter a of MoF Reg. 48/2023, quoted on (3/5/2023).

To be not subject to the withholding of Article 21 Income Tax or Article 23 Income Tax, MSME taxpayers must submit a photocopy of the certificate whose validity has been confirmed in the DGT information system.

In addition to taxpayers utilising the MSME final Income Tax, Article 21 Income Tax or Article 23 Income Tax is not withheld if the taxpayers receiving the remunerations hold an Article 21 Income Tax or Article 23 Income Tax Withholding Exemption Certificate (SKB).

If the taxpayers receving the remunerations do not fulfil one of the two above criteria, the taxpayers will be subject to Article 21 Income Tax or Article 23 Income Tax using the rates and tax bases stipulated under tax provisions.

Article 21 Income Tax is withheld on resident individual taxpayers, whereas Article 23 Income Tax is withheld on corporate taxpayers.

Services related to gold jewellery, gold bullion, non-solid gold jewellery and/or gemstones and/or other similar stones, include modification services, repair services, plating services, gilding services, cleaning services and other similar services.

Having performed withholding, the withholding agent is obliged to prepare a withholding receipt and submit it to the party subject to the withholding, remit Income Tax to the state treasury and file the withholding in the Periodic Income Tax Returns pursuant to applicable provisions. (sap)