Welcoming the Coffee Stock IPO: Let’s Understand the Tax Rules for Stock Trading!
The Scent of Coffee Fills the Stock Exchange Floor. The company behind the FORE brand, PT Fore Kopi Indonesia, officially listed its shares in an Initial Public Offering (IPO) on Monday (April 14).
According to the official Indonesia Stock Exchange (IDX) website, the offering price of the company’s shares was IDR 188.00 per share, with a total of 8,918,359,270 shares listed. This brings the company’s market capitalization to IDR 353.44 billion.
On its first trading day, FORE’s stock hit the upper limit of the Auto Reject Atas (ARA) by 34%, signaling a positive market response to FORE's debut.
However, before jumping into a buy position, it is advisable to conduct a comprehensive analysis. Besides being able to analyze technical and fundamental factors, you also need to understand the tax rules related to stock trading.
The size of your potential profit will be influenced by how much tax you are required to pay. This article will discuss the tax aspects of stock trading.
READ: Income Tax Regulation for Listed Companies Released
Tax Aspects When Purchasing Stocks
Stocks are not subject to Value Added Tax (VAT). However, when you buy stocks, you will usually incur a broker fee or transaction fee charged by the Indonesia Stock Exchange (IDX).
As a result, this broker fee is subject to VAT, which is calculated at the rate of 11/12 X 12% of the broker fee paid.
As an illustration, let's assume you purchase 10 lots of BMRI shares at IDR 4,800 per share, and the broker fee is 0.20%. The tax calculation would be as follows:
First, determine the broker fee to be deducted from the stock transaction:
| Broker Fee | = Stock Value X Broker Fee Percentage = [10 X 100 X IDR 4.800] X 0,20% = IDR 4.800.000 X 0,20% = IDR 9.600 |
Then, calculate the VAT owed by multiplying the VAT rate by the broker fee paid:
| VAT on Broker Fee | = VAT Rate X Broker Fee = [11/12X12] X [IDR 9.600] = IDR 1.056 |
Thus, the VAT on the broker fee for this transaction would be IDR 1,056.
Tax Aspects of Stock Sales
When you sell stocks, you will be subject to Income Tax Article (ITA) 4, Paragraph (2), which is a final tax of 0.5% of the stock's value.
For example, if you sell 10 lots of BMRI shares that were purchased at IDR 5,000 per share, the calculation of PPh Pasal 4, paragraph (2) would be as follows:
| Income Tax Payable |
= Tax Rate X Stock Value = 0,1% X [10 X 100 X IDR 5.000] = 0,1% X IDR 5.000.000 = IDR 5.000 |
Tax Reporting Obligations for Shareholders
Another tax obligation that shareholders must fulfill is to include their shareholding in the Annual Income Tax Return (SPT) for individual taxpayers (PPh Orang Pribadi).
Two key items must be reported in the Annual SPT for individual taxpayers:
The total number of shares owned, listed under the assets section.
The final income tax (PPh Pasal 4 Ayat (2)), which refers to income that has been subject to final tax withholding.
Asset Reporting
The total number of shares reported in the Annual SPT for individual taxpayers must reflect the value of the shares as of December 31 of the reporting tax year. This means the value should be based on the year-end (not March 31 or the filing deadline for the Annual SPT).
Final Income Tax Reporting
Additionally, income from the sale of shares must be reported in the final income tax section of the Annual SPT for individual taxpayers.
Conclusion
The IPO of PT Fore Kopi Indonesia presents an exciting moment in the capital market, especially for investors following the trend of new stock listings. However, beyond the potential profit from stock trading, it is essential for business owners and investors to understand the associated tax obligations.
Every stock transaction has fiscal consequences, whether when purchasing (through VAT on broker fees) or when selling (through 0.5% final income tax). Furthermore, shareholders must ensure accurate reporting in the Annual SPT, both for asset ownership and final income.
Understanding these tax aspects is not only crucial for compliance but also vital for crafting efficient investment strategies while minimizing legal risks. Therefore, tax education plays an integral role in capital market activities. (ASP/KEN)
