Land and building tax (Pajak Bumi dan Bangunan/PBB) is a type of property tax chargeable on all land and/or buildings, unless exempted. The negative list setting out land and buildings not subject to PBB includes those: Used simply for public interest in the areas of religious and social affairs, health, education and national culture, and… Read More
Withholding Tax Rates
The withholding tax rates applicable under tax treaties are summarised below: Notes Portfolio Substantial holdings Interest Royalties Tax 1. Algeria 15% 15% 15/0% 15% 10% 2. Australia 15% 15% 10/0% 15/10% 15% 3. Austria 15% 10% 10/0% 10% 12% 4. Bangladesh… Read More
Tax Treaties
Indonesia’s tax treaties provide for tax benefits in the form of withholding tax exemptions for service fees and for reduced withholding tax rates on dividends, interest, royalties, and branch profits received by residents of a country with which Indonesia has signed a tax treaty. Tax exemption on the service fees is typically granted only if… Read More
Permanent Establishment Time Test
Certain activities may give rise to the creation of a PE if they are conducted in Indonesia for more than a certain period of time. The following is a summary of these periods for the activities specified in the relevant tax treaties: Bldg. Site Construction Installation Assembly Supervisory Activities Other Services 1. Algeria 3 months… Read More
Deemed Salaries
Expatriate employees working for oil and gas drilling companies are deemed compensated at specifed amounts, which vary by position, resulting in the following deemed taxable income: US$ per month (gross before tax) General managers 11,275 Managers 9,350 Supervisors and tool pushers 5,830 Assistant tool pushers 4,510 … Read More
Main Personal Relief
Annual non-taxable income (Penghasilan Tidak Kena Pajak/ PTKP) for resident individuals are as follows: Rp. Taxpayer 15,840,000 Spouse 1,320,000 Each dependant (max. of 3) 1,320,000 Occupational expenses (5% of gross income, max. Rp. 500,000/month) 6,000,000 Employee contribution to Jamsostek for old age security savings (2% of gross income) Full… Read More
Social Security (Jamasostek)
Indonesia does not have a comprehensive social security system; however, there is a worker’s social security program (Jamsostek) which provides compensation in the event of working accidents, deaths, and old age (55 years) as well as sickness or hospitalization. The program is maintained by a designated state-owned company, PT Jamsostek, and calls for premium contributions… Read More
Concessional Tax Rates
The final tax rates for severance payments (if paid within 2 years) are as follows: Taxable Income Rate Tax Rp. On the frst Rp. 50,000,000 Nil Nil On the second Rp. 50,000,000 5% 2,500,000 Rate Tax Rp. On the next Rp. 400,000,000 15% 60,000,000 On the… Read More
Benefits In Kind
BIKs, for example cars, housing, education, home leave and reimbursement of an employee’s Indonesian tax liability provided by the employer, are typically not assessable in the hands of the employee. This also applies to BIKs which are required for the execution of a job, for example protective clothing, uniforms, transportation costs to and from the… Read More
Tax Rate – Individual
Most income earned by individual tax residents is subject to income tax at the following normal tax rates: Taxable Income Rate Tax Rp. On the first Rp. 50,000,000 … Read More
INDONESIAN TAX 