Tips for Calculating Taxes from Forex Trading

original article Tips Menghitung Pajak dari Trading Forex

Today, foreign exchange (forex) is one of the most popular investment choices for those who are planning their future welfare.

Therefore, more and more forex brokers are popping up with various offers for large profits. Sometimes the provisions sound unreasonable. Be careful with such brokers.

Trading only with legal and trusted Forex brokers in Indonesia, which are officially registered with the regulator. By trading at Finex, you can trade on 70 different instruments including 27 currency pairs, 7 indices, 33 single stocks, as well as WTI, Gold and Silver.

Forex trading itself can be interpreted as the process of speculating on the fluctuations in currency prices to generate profits by exchanging one currency for another. Due to its global nature, the Forex trading market is the largest and most liquid asset market in the world.

Many investors – especially novice investors – are attracted to Forex because it is low in complexity, easy to cash out (high liquidity), as well as many brokers who give you the opportunity to try it first.

For Forex trading, you need a broker who will act as an intermediary, as well as a provider of facilities such as security systems and transaction facilities. A reliable broker like Finex also serves as an informant for you traders in analyzing the market.

You need a broker you can trust fully to deposit your funds, which provides the best, safe, convenient, and fast service. You need a broker who can provide you with the tools to ensure you get the best trading experience, so that the path to profit becomes more flexible. Finex as one of the best Indonesian Forex brokers is your answer.

Before trading Forex, one aspect that you should pay attention to is the costs involved. In the previous article we discussed spreads in return for you to use the services of your broker in an effort to trade Forex safely and profitably.

In addition to spreads, you also have to take into account other costs in the form of Forex taxes.

How to Calculate Forex Tax?

The activity of generating profits from foreign exchange rate margins makes Forex subject to income tax which is regulated by income tax law.

As an Indonesian citizen, the reference is to the tax law, namely Law Number 7 of 1983 stdd Law Number 36 of 2008 concerning Income Tax which is stated in article 4 paragraph (1) letter l that foreign exchange gains are included in the object PPh tax.

Citing the explanation from the Directorate General of Taxes, the imposition of tax on income from foreign exchange gains is included in the non-final tax object so that the rate of Article 17 of the Income Tax Law is imposed.

Forex Tax in Indonesia

Forex tax calculations in Indonesia are included in the Individual Taxpayer subject to progressive rates:

  • IDR 0 to IDR 50,000,000.00 at 5% rate.
  • IDR 50,000,001.00 to IDR 250,000,000.00 at 15% rate.
  • IDR 250,000,001.00 to IDR 500,000,000.00 at a rate of 25%.
  • More than IDR 500,000,000 at 30% rate.
  • Tariff for Corporate Taxpayers and Permanent Establishments (BUT) is 25%

If you use the services of a foreign Forex broker, you will still be subject to income tax because the tax on Forex is based on two aspects: the principle of source and the principle of domicile.

Directorate General of Taxes explains that the principle of source applies to every Tax Subject who derives income from Indonesia, as long as the provisions of the legislation concerning tax subjects and objects are met. While the domicile principle applies to every Tax Subject who meets the provisions of domicile in Indonesia, the income earned either from income sources in Indonesia or outside Indonesia is subject to income tax by the Government of Indonesia.

Now you know the potential costs you will have to incur when making a profit trading Forex per month or per year.

Always keep a record of when you have to file your Forex income tax, so you can be prepared ahead of time.

Taxes are the largest source of income for a country. Forex trading income tax is included. By paying taxes means you are contributing to the financing of state expenditures. For a better shared environment.

Huynh Nguyen

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