Non-Taxable Income (applies to corporate and individual taxpayers) The law specifies a number of categories of income that are exempted from tax. These are: · Aid, donations, zakat, religious donations or gifts received, provided there is no business, work, or ownership relationship between the parties concerned; · Inheritances; · Dividends received by… Read More
Indirect sale of Indonesian Shares Involving Special Purpose Company
The sales of shares of a conduit company (SPC) owning Indonesian shares located in a tax haven country by a non- Indonesian tax resident can be deemed as a sale of shares of Indonesian party by the non-Indonesian tax resident so long as there is a special relationship between the SPC and the Indonesian party.… Read More
Foreign Loan
Government projects funded with foreign loans or foreign grants may be eligible for special tax treatment for the income derived from that funding. The projects that qualify are typically set out in the state Project Table of Contents (Daftar Isian Proyek/DIP) or other similar document. Main contractors, consultants and suppliers for foreign grant- funded or… Read More
Corporate Tax Facilities
Companies investing in certain business sectors and/ or in certain less developed regions having high priority on a national scale can be granted tax facilities in the form of: · Additional net income reduction, up to a maximum of 30% of the amount of investment; · Accelerated depreciation and amortization; · The period of loss… Read More
Business Profits
Taxable business profits are calculated on the basis of normal accounting principles as modified by certain tax adjustments. Generally, a deduction is allowed for all expenditures incurred to obtain, collect, and maintain taxable business profits. A timing difference may arise if an expenditure recorded as an expense for accounting can not be immediately claimed as… Read More
Luxury Goods Sales Tax
In addition to VAT, deliveries or imports of certain manufactured taxable goods may be subject to Luxury-goods Sales Tax (LST). A particular item will only attract LST once, i.e., tax will be charged either on importation of the good or on delivery by the (resident) manufacturer to another party. LST must be accounted for every… Read More
Article 23
Article 23 income tax (PPh 23) Certain types of income paid or payable to resident taxpayers are subject to Article 23 income tax at a rate of either 15% or 2% of the gross amounts: a. Article 23 income tax is due at a rate of 15% of the gross amounts on the following: 1. … Read More
Article 22
Article 22 income tax is typically applicable to the following: Event Tax rate Tax base 1. The import of goods (except goods 2.5% Import value, i.e., CIF value plus mentioned in number 2 below) using duties payable an Importer Identifcation Number (Angka Pengenal… Read More
Article 21
Article 21 income tax (PPh 21) Employers are required to withhold Article 21 income tax from the salaries payable to their employees and pay the tax to the State Treasury on their behalf. The same withholding tax is applicable to other payments to non- employee individuals (e.g., fees payable to individual consultants or service providers). … Read More
Article 4 (2)
Article 4 (2) – final income tax (PPh Final) Resident companies, Permanent Establishments (PEs), representatives of foreign companies, organizations, and appointed individuals are required to withhold final tax from the following gross payments to resident taxpayers and PEs: 1. Rental of land and/or buildings 10% 2. Proceeds from transfers of land and building rights 5%… Read More
INDONESIAN TAX 