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
EXCHANGE CONTROL
Although there are no strict foreign exchange controls currently in place in Indonesia, the Indonesian government has issued several regulations on the monitoring of foreign exchange traffic and places certain restrictions on the holding of Rupiah by nonresidents. This monitoring measure mainly comes in the form of reports on the foreign exchange flow in and… Read More
REPRESENTATION IN INDONESIA
As part of the growth in global economic activity, a great number of companies have expanded their business operations to include operations and offices in foreign countries. For the purpose of maintaining close supervision of the management of foreign business activities, many companies open a representative office in other countries even if they do not… Read More
LEGAL SYSTEM
The history of Indonesian legal system is closely related to the Dutch legal system. During the colonial period, the Netherlands-Indies Government implemented the concordantie principle in the legal sector throughout the territory of Indonesia. On the basis of this principle, virtually every law that was passed by the Netherlands parliament would take effect in the… Read More
INDONESIAN TAX 