‘Resident tax subject’ means any organization established or domiciled in Indonesia, and any permanent establishment of organizations not established or domiciled in Indonesia. ‘Organization’ means a limited-liability company, limited partnership, other form of company, state-owned corporation, regional-owned corporation regardless of name and form, partnership, firm [firma], association [kongsi], co-operative, foundation, or similar body, institute, pension fund, or other form of business entity.

A ‘permanent establishment’ is an establishment used by an individual not residing in Indonesia, or individual present in Indonesia for not more than 183 days in a period of 12 months, or an organization not established or domiciled in Indonesia, to carry out business or operate in Indonesia, in such forms as :

·Management office ;

·Branch office;

·Representative office ;

·Office Building ;

·Factory;

·Workshop;

·Mine or quarry of natural resources or an area of drilling operation used for mining exploration ;

·Fishing area ; livestock breeding area, agriculture area, plantation, or forest area ;

·Construction project, installation, or assembly project ;

·Provision of services in whatever form by an employee or another person, as long as done for more than 60 days in a period of 12 months.

·Individual or organization acting as an agent with a dependent position ; and

·Agent oremployee of an insurance company not established or domiciled in Indonesiawho receives insurance premiums or insures risks in Indonesia.

Resident tax subjects are taxed on their worldwide income.

Persons Exempt from Tax

The following persons are exempted from income tax:

·Representative agencies of foreign countries ;

·Officials of diplomatic missions and consulates or other officials of foreign countries, and individuals who assist them, working for and living with them, as long as they are not Indonesian citizens and do not receive or earn income other than that from their functions in Indonesia and the relevant countries also give reciprocal treatment ; and

·International organizations (as long as they are not engaged in business or other activities to earn income in Indonesia and Indonesia is a member of such organizations) and representatives of international organizations (as long as they are not Indonesian citizens nor engaged in business or other activities to earn income in Indonesia) as designated by the Minister of Finance .