Final tax at 5% is generally imposed on corporate taxpayers, while transfer of basic houses (rumah sederhana) and basic apartments (rumah susun sederhana) by a taxpayer whose main business is to engage in transfer of land and buildings is subject to 1% final tax. Transfer duty of 5% is payable by the purchaser (See ―Land… Read More
Loss Carried Forward
Losses may be carried forward for a maximum of five years. However, for a limited category of businesses in certain regions or businesses subject to certain concessions, the period can be extended for up to ten years. The carrying-back of losses is not allowed. Tax consolidation is not available.
Indirect Purchase of Indonesian Shares or Assets Involving Special Purpose Companies
The indirect purchase of shares or assets of an Indonesian taxpayer by another Indonesian party through an entity established especially for such purpose (Special Purpose Company – SPC) can be stipulated as the purchase of shares or assets by the other Indonesian party if the SPC has a special relationship with the other Indonesian party… Read More
Non-Deductible Expense
Disallowed deductions There are a number of non-deductible expenses. These non- deductible expenses are specified in the law or in associated regulations and pronouncements. Major categories of non- deductible expenses include: Benefits-in-kind (BIKs) (e.g., free housing, 50% of the acquisition and maintenance costs of certain company provided cars), except food and drink provided to all… Read More
Deductible Expenses
Calculation of Income – Deductible Expenses Under the new Income Tax Law, all legitimate business expenses directly or indirectly related to earning, collecting, or maintaining income are deductible from the assessable income to calculate the taxable income. These expenses include but are not limited to: 1. Expenses that are directly or indirectly related to business… Read More
Tax Rates
Normally, corporate income tax that is used in Indonesia is as much as 25%. This rate starts for the fiscal year of 2010 onward. Public companies that satisfy a minimum listing requirement of 40% and other special conditions are entitled to a tax cut of 5% off the standard rate. Thus, it gives them a… Read More
Tax Holiday
New corporate taxpayers in certain pioneer industries may enjoy a CIT exemption for a period of five to ten years from the start of commercial production. After the end of the CIT exemption, the company will receive a 50% CIT reduction for two years. To be eligible for the above facilities, taxpayers should be newly… Read More
Profit Distribution
Tax is withheld from dividends as follows: 1. Resident recipients Dividends received from an Indonesian company by a limited liability company incorporated in Indonesia ( Perseroan Terbatas/PT), a cooperative, or a state-owned company, are exempt from income tax if the following conditions are met: The dividends are paid out of retained earnings; and The company… Read More
Investment Incentives
The DGT, on behalf of the Minister of Finance (MoF) and based on the recommendation of the Investment Coordinating Board (Badan Koordinasi Penanaman Modal/BKPM) Chairman, may provide the following tax concessions to PT companies following their investment in certain designated business areas or in certain designated regions: A reduction in net income of up… Read More
Gains Resulting from Revaluations of Fixed Assets
Gains resulting from a DGT-approved revaluation of fixed assets are subject to final tax at a rate of 10%.
INDONESIAN TAX 