Indonesia is no different. Whether you’re an employee, consumer, or a business owner; whether you live in Jakarta or Bali, you are bound by the laws of taxation.
HC Consultancy will assist our Client to be complaint with the rules that govern Indonesia.
INDIVIDUAL INCOME TAX
The individual income tax is a levy on the different sources of income.
These include capital gains from the transfer or sale of property, rents and other forms of passive income, self-employment income, and, of course, employment income.
Your Payment of Individual income tax will depend on your status.
These are the Indonesian nationals since birth or have obtained permeant residency in the country.
A foreign resident, for the sole basis of determining taxation, is an alien who has stayed in the country for no less than 183 days over 12 months.
These are foreign individuals who do not meet the criteria to be considered as tax residents but are earning money in Indonesia.
Meanwhile, if you’re a foreign non-resident, your income tax is based on your earnings in the country only.
If you’re an individual tax resident (local or foreign)
|Income (in IDR)||Tax Rate|
|up to 50 million||5%|
|between 50 – 250 million||15%|
|between 250 – 500 million||25%|
|over 500 million||30%|
If you’re a tax non-resident: 20% based on gross income
Other income-related tax rates to keep in mind:
- 5% of the final tax based on the capital gains proceeds or taxable sale value, whichever is higher
- 20% final tax on interest income earned from local and Indonesian-based banks regardless of the currency
- 1% final tax on the proceeds of a share sale for companies traded in the Indonesia Stock Exchange
- 10% final tax on rental of the building or land
- 2% on services rendered (not applicable to foreign non-tax residents)
CORPORATE INCOME TAX
Indonesia corporate income tax is set at a 25% flat rate on its income unless it meets certain conditions, in which case the effective rate is lower:
|Corporate Income||Tax Rate|
|public company with > 40% of its shares traded on the IDX||20%|
|company with a gross turnover < 50 billion IDR||12.5%|
|company with a gross turnover < 4.8 billion IDR||1%|
Resident Indonesia companies are required to withhold tax at a rate of 20% from the payments to foreign companies.
However, Indonesia boast 65 double tax treaties which minimizes the withholding tax for service fees, dividends, interest, royalties and branch profits. To claim these reduced rates a foreign party must present it certificate of Domicile to the DGT.
VALUE ADDED TAX (VAT)
VAT in Indonesia In general at a flat rate of 10%.
The flat rate, however, can go up or down depending on the goods and services offered.
CUSTOMS & EXCISE TAX
Indonesia’s custom and excise tax is averaged at 40%.