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New Stamp Duty Law

By : M. Arie Armand, Agung Santoso, Suherlin

11-Jan-2021

On 26 October 2020, the government of the Republic of Indonesia has issued Law Nr. 10 of 2020 concerning Stamp Duty (the “New Stamp Duty Law”) which will come into effect on 1 January 2021. This New Stamp Duty Law revokes the previous Law Number 13 of 1985 concerning Stamp Duty (the “Old Stamp Duty Law”).

In order to give a brief outline on this New Stamp Duty Law, below are a few notable updates thereunder:

 

I. Increase of Stamp Duty Price

 

	Before	After
Amount of Stamp Duty	IDR3,000 or IDR6,000 per document	IDR10,000 per document
Value Threshold	Up to IDR250k = no stamp duty; More than IDR250k and up to IDR1mio = IDR3,000 stamp duty; More than IDR1mio = IDR6,000 stamp duty.	Up to IDR5mio = no stamp duty; More than IDR5mio = IDR10,000 stamp duty.

 

Based on the New Stamp Duty Law, the implementation of the new stamp duty price will subject to the following provisions:

1. documents for which stamp duty is not paid or underpaid before the New Stamp Duty Law comes into effect, such stamp duty shall be payable and paid based on the Old Stamp Duty Law;
2. stamp duty that has been printed based on the Old Stamp Duty Law, can still be used up to a transition period of 1 (one) year after the New Stamp Duty Law comes into effect or until 1 January 2022 but cannot be exchanged for money or any other form;
3. the affixation of old stamp duty (meterai tempel) pursuant to point (b) above, can be used provided that the total value of the affixed stamp duty is at least IDR9,000 (nine thousand Rupiah).

 

II. Forms of Stamp Duty

The followings are 3 (three) forms of stamp duty provided under the New Stamp Duty Law:

1. Affixation stamp duty (meterai tempel);
2. Electronic stamp duty; and
3. Other forms of stamp duty as determined by Ministerof Finance.

 

Ad.1 Affixation stamp duty (meterai tempel)

Affixation stamp duty (meterai tempel) will contain common features and special features. The common features of affixation stamp duty (meterai tempel) at least consist of (i) the national emblem picture of Garuda Pancasila; (ii) “Meterai Tempel” phrase; and (iii) number(s) indicating the nominal value of the affixation stamp duty (meterai tempel). The special features will be used as a safety element contained in the design, materials and printing techniques of the affixation stamp duty (meterai tempel). The common and special features of the affixation stamp duty (meterai tempel) will be further regulated in a separate Minister of Finance regulation.

Ad.2 Electronic Stamp Duty

Electronic stamp duty will contain unique code and special information. The unique code and the special information concerned in relation to the electronic stamp duty will be further regulated in a separate Minister of Finance regulation. This electronic stamp duty is planned and intended to apply for online or electronically generated documents.

Ad.3 Other Forms of Stamp Duty determined by Minister of Finance

Other forms of stamp duty determined by Minister of Finance is the stamp duty made by using a digital stamp machine (mesin teraan meterai digital), computerized systems, printing technology, and other systems or technologies. An approval from the relevant Head of Tax Office (having jurisdiction over the domicile of the taxpayer) must be obtained to pay stamp duty by way of this alternative forms.

In relation to the implementation of other forms of stamp duty determined by Minister of Finance, we already have these following existing regulations:

1. Minister of Finance Decree No. 133B/KMK.04/2000 of 2000 concerning Settlement of Stamp Duty by Other Means; and
2. Tax General Director Regulation No. PER-66/PJ/2010 of 2010 concerning the Settlement of Stamp Duty Procedure by Affixing the Stamp Duty Paid-Off Mark (Tanda Meterai Lunas) with Digital Stamp Machine (Mesin Teraan Meterai Digital).

 

III. Subsequent Payment of Due Stamp Duty (Pemeteraian Kemudian)

In relation to the subsequent payment of due stamp duty (pemeteraian kemudian) or more commonly known as nazegelen, the New Stamp Duty Law provides that this nazegelen (pemeteraian kemudian) will be further regulated in a separate Minister of Finance regulation.

Up to this date, however, no new Minister of Finance regulation has been issued that revokes the implementation of the existing Minister of Finance Regulation No. 70/PMK.03/2014 of 2014 concerning the Procedure of Subsequent Payment of Due Stamp Duty (Pemeteraian Kemudian).  Therefore, for the time being the payment for nazegelen shall still be subject to this existing regulation.

Under the existing regulation, nazegelen can be made at any local post office by paying the penalty of 200% of the initial due stamp duty price.

 

IV. Banking Document that Subject to Stamp Duty (e.g. Trade Confirmation for Derivative Transaction)

Prior to the enactment of New Stamp Duty Law, the types of banking documents that subject to stamp duty have been listed under the Circular Letter of Tax General Director No. SE 29/PJ.5/2000 concerning Banking Documents that Subject to Stamp Duty, e.g. (i) forward sale and purchase contract (kontrak jual-beli forward) and (ii) binding derivative trade confirmation (surat pengikatan perjanjian transaksi derivatif), shall be subject to stamp  duty payment.

In practice, some banks will document their derivative transactions related trade confirmations [which are entered electronically], by way of generating a hardcopy version of said trade confirmations to be signed by both parties subsequently.

This foregoing documented trade confirmations* will then be subject to stamp duty payment IF (i) it is executed in Indonesia (and payable at the time of execution) or (ii) in respect of any document executed abroad, if it is to be used as an evidence in the Republic of Indonesia (and payable prior to such document is admissible as an evidence).

The failure to pay the abovementioned stamp duty does not affect the validity of the underlying document, however will prevent such document from being accepted as an evidence in an Indonesian court. An executed agreement that has not been stamped can be stamped at a later time (nazegelen).

Going forward, in line with the plan to implement electronic stamp duty for online or electronically generated documents, said derivative transactions related trade confirmations may be subject to stamp duty (whether or not hardcopy of such trade confirmations are subsequently made). However, the implementation of these electronic stamp duty is still subject to (i) the issuance of implementing regulation regarding the form, utilization and purchase of electronic stamp duty, (ii) the infrastructure readiness and (iii) a confirmed list for types of online or electronic documents that are subject to electronic stamp duty by the regulator.

 

*) In principle the stamp duty will due against the document and not the transaction. So, if a trade confirmation documented two or more transactions thereunder, the payable stamp duty is still one stamp duty for that one document.

 

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