Anti-avoidance Rules

The income tax law contains specific anti-avoidance provisions. Where the Indonesian DGT considers that transactions have not been conducted at arm’s length due to the existence of a “special relationship” between the parties, the consideration paid may be adjusted. The DGT’s power extends to all domestic and cross border transactions. In addition to the power… Read More

Indonesia

In Indonesia, taxes are levied under three laws that were introduced in December 1983. These cover: General Tax Provisions and Procedures Income Tax Value-Added Tax (VAT) on goods and services, and Sales Tax on Luxury goods (STLG). The latest amendment to the Law on General Tax Provisions and Procedures was published by the government on… Read More

SOURCE JURISDICTION

Non-Resident Tax subjectUnder the provisions of the Income Tax Law, a non-resident tax subject is an individual not residing in Indonesia, an individual present in Indonesia for not more than 183 days in a period of 12 (consecutive) months, or an organization not established or domiciled in Indonesia who:·is carrying out business or operating through… Read More

Income Taxation Law & Administration

Introduction The current framework of Indonesia’s tax laws initiated in 1983 has been subsequently amended, most recently in 2008. Companies doing business in Indonesia are subject to income tax, withholding tax, value added tax (VAT) and various other indirect levies, such as tax on land and building, and stamp duty. Individual articles contained in the… Read More

DOING BUSINESS IN INDONESIA

Doing business successfully in Indonesia requires some understanding of Indonesian legal and regulatory environments. Many promising changes are underway in Indonesian business environment which will help Indonesia emerge as an attractive destination of doing business and profitable market for Malaysian companies. SETTING UP BUSINESS ACTIVITIES AND A COMPANY IN INDONESIA To establish a business in… Read More

Expatriate Employees

Indonesian companies, whether national companies of foreign investment companies are permitted to employ expatriate employees as a Director, Commissioner or certain other position in the company that open for expatriate employee. A company who would like to employ expatriate employee must provide necessary education and training programs for Indonesian employees who are expected to replace… Read More

EMPLOYMENT

The development of Indonesian employment regulations is progressive and further changes are expected in the coming years. Due to the active involvement of various NGOs, the awareness of Indonesian laborers has also increased during the last 10 years. Principally, labor matters in Indonesia are regulated in the following laws: · Law Number 13 of 2003… Read More