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%.

Depreciation and Amortization

Depreciation/ Amortization 1    Either straight-line or declining balance method of depreciation is allowable, except for buildings, for which only the straight-line method is permitted. 2     The chosen depreciation method must be applied consistently to assets. 3     When adopting a declining balance method, the remaining book value at the end of the useful life… Read More

Corporate Tax for Certain Industries

The tax provisions for the oil and gas, geothermal, and general mining (including coal) industries and for shariah-based industries shall be stipulated separately through Government Regulations.

Controlled Foreign Company

Controlled Foreign Company (CFC) Rules 1    The Income Tax Law, through a Minister of Finance Decree,      determines the time of receipt of dividend by a resident taxpayer on capital participation in a business entity abroad other than a business entity that sells its shares on a stock exchange in these cases: ·    The amount of… Read More

Tax Payments – Corporate

There are three ways to settle tax liabilities for resident taxpayers and Indonesian PEs of foreign companies: direct payments, third party withholding, or a combination of both. However, foreign companies without a PE in Indonesia have to settle their tax liabilities for their Indonesian-sourced income through withholding of the tax by the Indonesian party paying… Read More