Indonesia Taxes

Corporate Income Tax (CIT):

• The standard corporate income tax rate is 22%.
• Specific industries or investment areas may have different rates or tax holidays.

Individual Income Tax (PIT):

• Individual income tax rates are progressive.
• Rates vary based on income brackets.
• Non-resident individuals are taxed on income sourced in Indonesia.

Value Added Tax (VAT):

• The standard VAT rate is 11%.
• From January 1st 2025, the legal VAT rate becomes 12%, however, through a special calculation, the effective VAT rate on most goods will remain at 11%.
• Luxury goods will be taxed at 12% from January 1st 2025.
• Specific goods and services may be exempt or subject to different rates.

Withholding Tax (WHT):

• Payments to non-residents are subject to withholding tax.
• Withholding tax rates vary depending on the type of income and applicable Double Taxation Avoidance Agreements (DTAAs).
• Withholding tax applies to payments like dividends, interest, royalties, and fees for technical services.

Land and Building Tax (PBB):

• Land and building tax is levied on property ownership.
• Rates and regulations vary by region.

Stamp Duty:

• Stamp duty is levied on certain documents.

Luxury Goods Sales Tax (PPnBM):

• Luxury goods sales tax is levied on specific luxury goods.
• Rates vary depending on the type of goods.

Tax Residency:

• Tax residency is determined by factors such as the number of days spent in Indonesia and the individual's intention to reside.
• Specific rules apply to determine residency status.

Double Taxation Avoidance Agreements (DTAAs):

• Indonesia has DTAAs with numerous countries.
• These agreements aim to prevent double taxation of income.
• DTAAs may reduce withholding tax rates or provide exemptions.

Tax Compliance:

• Taxpayers are required to file tax returns and comply with other tax regulations.
• Electronic filing is mandatory for many taxpayers.

Transfer Pricing:

• Transfer pricing regulations apply to transactions between related parties.
• These regulations aim to prevent tax evasion.

Global Minimum Tax:

• Indonesia is implementing regulations regarding the global minimum tax, according to OECD standards.

Automatic Exchange of Information:

• Indonesia participates in the automatic exchange of financial account information.
• It is important to seek professional tax advice specific to your situation.