Answer Summary
Referring to article 23 of the Income Tax Law, income from website domain purchase transactions is not listed as an income object subject to income tax. Services related to purchasing website domains are not mentioned in the services regulated in article 23 of the Income Tax Law, but are included in other types of services regulated in PMK-141/2015).
Referring to PMK-141/2015, there is no mention of the imposition of PPh Article 23 in relation to domains. This is because purchasing a domain does not include purchasing services. Purchasing a domain is only considered purchasing a website name or address, not website management, so it is not included in the delivery of services. Domains are considered intangible taxable goods so they are not included in the provision of services which are subject to Income Tax Article 23. Thus, the purchase of domains is not subject to Income Tax Article 23.
Complete Discussion
Thank you Mr Euis for your question. Previously, we must first know the difference between a domain and a website because this will affect the imposition of Income Tax Article 23. Hosting is a medium used to store data or information which will later be packaged in the form of a website. Meanwhile, the address of a website is called a domain. A domain is a unique name used to identify a website server address on the internet network. Domains are used to make it easier to mention data or information on a website, for example “pratamaindomitra.co.id”. It’s like if a domain is an address then the website is the house. Thus, domains are different from websites and the tax treatment of both is also different.
The treatment of PPh Article 23 on domains and websites is also different. Services related to domains or websites are not mentioned in Article 23 paragraph (1) of Law no. 7 of 1983 concerning Income Tax s.t.d.t.d. UU no. 11 of 2020 concerning Job Creation (“PPh Law”), but is included in other types of services regulated in Minister of Finance Regulation Number 141/PMK.03/2015 (PMK-141/2015). In Article 1 paragraph (6) letter v PMK-141/2015, it is stated that other services subject to PPh Article 23 include services related to creating or managing websites.
“Other types of services as intended in paragraph (1) consist of:
v. Website creation and/or management services;”
(Article 1 paragraph (6) letter v PMK-141/2015)
In PMK-141/2015 there is no mention of the imposition of Income Tax Article 23 related to domains. This is because purchasing a domain does not include purchasing services. Purchasing a domain is only considered purchasing a website name or address, not website management, so it is not included in the delivery of services. Domains are considered intangible taxable goods so they are not included in the provision of services which are subject to Income Tax Article 23. Thus, the purchase of domains is not subject to Income Tax Article 23.
