Individual Income Tax: Obligations That You Must Know and Fulfill
January 2023
Almost all income earned by individual taxpayers in Indonesia is subject to income tax. In fact, if an individual fulfills any of the following conditions, then he/she is regarded as a tax resident in Indonesia:
- The individual lives in Indonesia
- The individual is in Indonesia for more than 183 days within a 12-month period
- The individual is in Indonesia during a fiscal year and intends to reside in Indonesia
For non-resident individuals, they are subject to a 20 percent withholding tax on Indonesia-sourced income.
The Indonesian tax office (Direktorat Jenderal Pajak) requires all resident individuals in Indonesia to have their own personal tax numbers, Nomor Pendaftaran Wajib Pajak or NPWP. This regulation also applies to expatriates. incorrect statement.
According to the latest government law, the rate of the tax that an individual need to pay is based on this table:
|
Annual Income |
Personal Income Tax Rate |
|
Up to – IDR 60 Million |
5% |
|
Over IDR 60 Million up to IDR 250 Million |
15% |
|
Over IDR 250 Million up to IDR 500 Million |
25% |
|
Over IDR 500 Million up to IDR 5 Billion |
30% |
|
Over IDR 5 Billion |
35% |
Tax Payment and Filing Obligations
Tax liabilities for a certain time of year are normally paid to the State Treasury through an authorized tax-payment bank (bank persepsi) and then reported to the DGT office through the submission of relevant tax forms.
Some income tax is collected through a withholding tax mechanism, which the payer must withhold and submit the tax to the tax offices on a monthly basis. The monthly payment deadline is the 10th of the following month, and the monthly filing deadline is the 20th of the following month.
Indonesia Tax Deadlines
|
Type of tax |
Monthly payment deadline |
Monthly filing deadline |
Annual filing deadline |
|
Corporate income tax |
Before end of the 4th month after the tax year ends. |
N/A |
End of the 4th month after the tax year ends |
|
Personal income tax |
Before end of the 3rd month after the tax year ends. |
N/A |
End of the 3rd month after the tax year ends |
|
Withholding tax |
10th of the following month |
20th of the following monthz |
– |
|
VAT |
Before the VAT return filing deadline |
End of the following month |
– |
As a member of the Praxity alliance with a presence in the major economies of the world, Moores Rowland in Indonesia has a thorough understanding of the complexity of taxes. For your company, we offer simple tax advising and processing that are convenient and result in thorough reports. For more information on our services, please email: contact-jakarta@moores-rowland.com or contact-bali@moores-rowland.com.
**By: Stefani W. Anggraeni — Marketing Communications & Social Media Specialist