PT PMA Share Sale Tax: Determining the Rate and Who Pays
Main topic: Classifying the seller, shares and withholding party before calculating tax on a PT PMA share transaction.
Full background: PT PMA Tax Obligations: A Transaction Based Guide.
Continue according to your needs: PT PMA Share Sale Treaty Review: When Does Indonesia Have Taxing Rights? and PT PMA Hotel Tax Due Diligence: An Investor Checklist.
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PT PMA share sale tax does not have one rate that automatically applies to every transaction. First identify whether the seller is a resident or nonresident taxpayer, an individual or a corporation, and whether the shares are sold off-market or through a stock exchange.
For a privately held PT PMA with foreign shareholders, PPh 26 is a key review point. However, the result can still be affected by the tax treaty between Indonesia and the seller’s country of residence.
PT PMA Share Sale Tax Has No Single Rate for Every Transaction
A major risk is taking a rate from another transaction and applying it to every PT PMA share sale.
Nonresident Sellers
For foreign shareholder transactions, PMK 81 of 2024 took effect on 1 January 2025; its JDIH amendment history identifies PMK 1 of 2026 as the latest amendment.
Article 238 provides that income from a company’s share sale by a nonresident other than a permanent establishment is subject to PPh 26 at 20% of deemed net income, set at 25% of the selling price. This produces an effective 5% of the selling price and is final tax.
If the seller is resident in an Indonesian treaty partner country, that withholding applies only where the relevant treaty gives Indonesia taxing rights.
The effective 5% rate should therefore not be used automatically before checking tax residence and the applicable treaty.
Resident Sellers
For resident sellers, gains from the sale or transfer of assets are included within income tax objects.
Do not therefore use 5% of the selling price merely because the asset is shares in a PT PMA. The calculation follows the seller’s status and applicable income tax provisions.
For a resident corporate taxpayer, the general corporate income tax rate is 22% of taxable income, subject to any applicable relief or special provisions.
PT PMA Share Sale Tax Decision Matrix
This table summarises the main points to compare before deciding the next step.
| Scenario | Main Basis to Check | Initial Treatment |
|---|---|---|
| Nonresident seller, shares in an Indonesian company | Selling price and treaty | Review PPh 26 and the treaty. |
| Resident corporate seller | Gain and taxable income | Include in the corporate income tax calculation under the relevant rules. |
| Resident individual seller | Gain and seller’s tax status | Review the applicable individual income tax provisions. |
| Shares sold through a stock exchange | Gross exchange transaction value | Special exchange transaction provisions apply. |
This is a decision framework. The final calculation must use the actual transaction facts and each party’s status.
PPh 26 on Share Sales by Foreign Investors
For a foreign shareholder in a privately held PT PMA, distinguish three figures:
- the share selling price;
- deemed net income of 25% of the selling price; and
- PPh 26 at 20% of that deemed net income.
Mathematically:
20% × 25% × selling price = 5% × selling price.
This formula comes from Article 238 and applies to nonresidents other than permanent establishments within its scope, subject to the relevant treaty.
Do not replace the selling price with the seller’s actual gain in this formula. The rule uses deemed net income set as a percentage of the selling price.
How Can a Treaty Change the Result?
Review the treaty before closing where the nonresident seller is from an Indonesian treaty partner country.
Questions include:
- what is the seller’s tax residence?
- is Indonesia’s treaty with that country in force?
- which article governs gains from the share transfer?
- does Indonesia have taxing rights?
- have the administrative requirements for treaty benefits been met?
This article does not assign one treaty rate because provisions vary by country and transaction facts.
If the Seller Is a Resident Taxpayer
The analysis for a resident seller differs from PPh 26.
Finance needs to establish:
- the share selling price;
- the acquisition cost or relevant tax basis;
- transaction costs that may be considered under the rules;
- the transaction gain or loss;
- whether the seller is an individual or corporation; and
- any relevant tax relief.
For a resident corporation, the general 22% rate applies to taxable income, rather than automatically to the share selling price.
A share transaction worth IDR 10 billion therefore does not automatically produce IDR 2.2 billion of tax. Taxable income must first be determined from the accounts and fiscal provisions.
Who Withholds or Collects the Tax?
For a nonresident seller, establish the withholding mechanism before paying the share price.
Under Article 240, the company records the deed transferring the shares only after the nonresident taxpayer has evidenced full payment of the tax due by providing a copy of the withholding or collection evidence.
The parties should therefore discuss more than the share price. The agreement and closing timetable need to address who performs withholding or collection and when tax evidence becomes available.
Calculation Example for a Nonresident Seller
Assume a foreign shareholder sells PT PMA shares for IDR 20,000,000,000 and, after treaty review, Indonesia retains taxing rights and the relevant domestic provisions apply.
Deemed net income:
25% × IDR 20,000,000,000 = IDR 5,000,000,000.
PPh 26:
20% × IDR 5,000,000,000 = IDR 1,000,000,000.
This is equivalent to:
5% × IDR 20,000,000,000 = IDR 1,000,000,000.
The example illustrates Article 238’s formula only. Check seller status and the treaty before using it for an actual transaction.
What If the Shares Are Traded on a Stock Exchange?
Do not equate privately held PT PMA shares with exchange-traded shares.
Where shares are sold through a stock exchange, Article 244 of PMK 81 of 2024 provides final income tax of 0.1% of the gross share sale transaction value. Founder shares can also require a separate review under the related provisions.
Before choosing the tax rule, establish whether the transaction is a privately held company’s share sale or an exchange transaction.
Documents to Check Before a Share Sale
Before finalising the net price and payment timetable, prepare at least:
- seller and buyer identities;
- each party’s taxpayer status;
- the foreign seller’s tax residence;
- the number and percentage of shares transferred;
- the shares’ acquisition cost;
- the agreed selling price;
- relevant capital or ownership change history;
- documents supporting treaty application, where used;
- the share purchase agreement;
- share transfer documents;
- withholding or collection evidence where required; and
- a reconciliation of share price payments to bank records.
This is not a complete legal closing checklist. For tax and accounting, the aim is to make transaction figures traceable and settle treatment before funds move.
Mistakes to Avoid
First, assuming all foreign investors automatically pay 5%. Check the treaty.
Second, applying 5% to resident sellers. Article 238’s PPh 26 rule concerns nonresident taxpayers other than permanent establishments.
Third, calculating a resident corporate seller’s tax directly from the selling price. The general corporate rate applies to taxable income, rather than automatically to gross proceeds.
Fourth, checking tax only after agreeing the seller’s net proceeds. Withholding can affect the funds received at closing.
Fifth, ignoring the buyer’s status. For a nonresident seller, buyer status determines the withholding or collecting party.
Conclusion
PT PMA share sale tax begins with identifying the seller, rather than assuming a universal rate.
For nonresidents other than permanent establishments within Article 238 of PMK 81 of 2024, the effective PPh 26 rate is 5% of the selling price and is final. A treaty can affect Indonesia’s taxing rights.
For resident sellers, share sale gains fall within income tax and the calculation follows taxpayer status and the applicable rules. Stock exchange transactions have separate provisions.
Before closing, establish four things: the seller, the price and transaction basis, treaty application, and the party required to withhold or collect tax.
Selling PT PMA Shares? Calculate the Tax Before Closing
Where a transaction involves foreign shareholders, treaties, historical acquisition costs or several buyers, complete the tax calculation before finalising net proceeds and the payment timetable.
Usman Tax supports business tax and accounting needs in Bali. Discuss transaction review, reconciliation and tax compliance through its tax consultation service.
Continue with the PT PMA share sale treaty review so the documents and next steps address the actual transaction.
Read Also: Business Tax Administration in Bali: Records and Controls
Prepare relevant documents before discussing your needs through tax consultation with Usman Tax.
Read Also: PT PMA Tax Obligations: A Transaction Based Guide
FAQ PT PMA Share Sale Tax
What Tax Applies When a Foreign Shareholder Sells PT PMA Shares?
For a nonresident other than a permanent establishment within Article 238 of PMK 81 of 2024, PPh 26 is 20% of deemed net income set at 25% of the selling price. This gives an effective final rate of 5% of the selling price, subject to treaty review.
Does the 5% Rate Apply to Indonesian Shareholders?
Not automatically. That effective rate concerns PPh 26 for nonresidents. Resident sellers follow income tax provisions based on their taxpayer status and transaction gain.
Who Withholds PPh 26 When PT PMA Shares Are Sold?
A resident buyer acts as withholding party. If the buyer is a nonresident taxpayer, the Indonesian company whose shares are transferred acts as collecting party under Article 239 of PMK 81 of 2024.
Can a Treaty Reduce or Change Share Sale Tax?
A treaty can affect Indonesia’s taxing rights. Because provisions vary by country and structure, check the seller’s tax residence and relevant treaty article before applying domestic withholding.
Is 22% Corporate Income Tax Calculated on the Share Selling Price?
Not automatically. For a resident corporate taxpayer, the general 22% rate applies to taxable income. First determine the transaction gain and fiscal calculation.
How Do Privately Held PT PMA Shares Differ from Exchange-Traded Shares?
Stock exchange sales have special final income tax rules based on gross transaction value. Privately held PT PMA share sales, particularly by foreign shareholders, require PPh 26 and treaty analysis.
Sources and References
- PMK 81 of 2024: Status and Amendment History — jdih.kemenkeu.go.id
- PPh 26 on Share Sales and Stock Exchange Transaction Provisions — pajak.go.id
- Fourth Amendment to PMK 81 of 2024 — jdih.kemenkeu.go.id
- Income Tax Objects: Gains on Asset Transfers — pajak.go.id
- Income Tax Rates After the Tax Regulation Harmonisation Law — pajak.go.id
