Taxes in Indonesia

Indonesia tax rates in 2026 at a glance

A quick cheat sheet of the 2026 rates. Details, exceptions and worked examples in rupiah follow below.

What changed going into 2026. Headline value added tax rose to 12% on 1 January 2025, but for everything except luxury goods the base is 11/12 of the price, so the real burden stayed at 11%. Government Regulation PP 20/2026, in force from 22 April 2026, made the 0.5% turnover tax permanent for individuals and PT Perorangan but closed it to ordinary PTs and CVs, and expressly classed bloggers and influencers as professionals who cannot use it. Crypto rules changed on 1 August 2025, and the UTPR, the last piece of the global minimum tax, took effect on 1 January 2026.

Amounts below are in US dollars with the sum in rupiah in brackets; one dollar is about 17,900 rupiah. If a reference table shows 10% value added tax or a 1% turnover tax for small businesses, it is out of date: 10% value added tax applied until April 2022, and the 1% turnover tax until mid-2018.

Compare taxes in 146 countries: relocation taxes 2026

Tax residency in Indonesia: 183 days and the intention to stay

A resident is taxed on worldwide income, a non-resident only on Indonesian-source income. An individual becomes a resident by meeting any one of these tests.

The third test is the trap. In practice the tax office assumes that a long-term stay permit, a KITAS or KITAP, can on its own show an intention to reside, so residency starts on arrival rather than on day 184. The 183-day test runs over any rolling 12 months, so splitting a stay across two calendar years does not help. See our article on tax residency and the 183-day rule.

Territorial regime for foreign experts

Under the 2020 Omnibus Law and Finance Minister Regulation PMK 18/2021, a foreign resident can be taxed only on Indonesian-source income for the first four years. It is not a general expat rule: you need proven expertise in science, technology or mathematics (a certificate, a degree or at least five years of experience), a duty to transfer knowledge, an approved position or researcher status, and an application to the tax office. It cannot be combined with treaty relief: you choose one or the other.

On the E33G remote worker visa or any other permit, tax status is set by tax law, not the visa. See Indonesia residence permits and the digital nomad visa.

Indonesia tax residency: how to become a resident and count the days

Indonesia makes you resident if any 12 months hold more than 183 days. There is a shortcut too: arriving during the tax year with the intention to live here makes you resident without counting days. A long-stay visa and a yearly lease in Bali are typical evidence of such an intention.

A resident pays progressive income tax on worldwide income, but qualifying foreign experts can pay only on local income for the first 4 years. A non-resident pays only on Indonesian income. The status is confirmed by the Directorate General of Taxes.

Mistakes cost more: the tax office reads your intention from the visa and the lease, not from your words. Murblz support removes these risks: we count days, assess the grounds and obtain the certificate. We guarantee professional work and a transparent process, and in most cases a result on the first filing.

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Personal income tax: the 5-35% scale and allowances

The scale comes from the Income Tax Law as amended by the Harmonised Tax Regulations Law (UU HPP No. 7/2021) and is unchanged for 2026. It applies to annual taxable income after deductions; there are no local income taxes.

Allowances: PTKP and job expenses

The non-taxable allowance, PTKP (penghasilan tidak kena pajak, income not subject to tax), is available only to residents. Non-residents are taxed on the gross amount.

The maximum personal allowance for a married taxpayer with three children is 54 + 4.5 + 3 × 4.5 = $4,100 (72 million rupiah) a year. Zakat and religious contributions paid to a government-recognised body are also deductible.

How tax is withheld from salary

Since 2024 employers withhold tax monthly using average effective rate tables (TER, tarif efektif rata-rata) based on monthly pay and family status. In December the tax is recalculated on the annual scale and the difference is settled, so the December deduction can look very different. The mandatory religious holiday allowance (THR) and bonuses are taxed together with salary.

Income subject to final tax

Some income bears a final tax withheld on the gross amount and kept out of the annual scale.

To get the dividend exemption, the dividends must be invested in qualifying instruments in Indonesia within the set deadline and held there for at least three tax years. Gains on other assets are taxed for residents at the ordinary scale.

BPJS contributions and take-home pay

Social security has two schemes: BPJS Ketenagakerjaan (work accidents, death, old-age savings, pension) and BPJS Kesehatan (health care). Foreigners working in Indonesia for at least six months join both, but the JP pension programme is not mandatory for expatriates.

Extra family members can be added to health cover for 1% a month each; the self-employed pay fixed contributions.

Example: a salary of $1,700 (30 million rupiah) a month

A resident employee, single with no dependants (status TK/0), paid $1,700 (30,000,000 rupiah) a month by an employer on the minimum JKK rate of 0.24%. For simplicity: 12 salaries without THR or bonuses, and the JP cap of $630 (11,086,300 rupiah) for the whole year. Employer JKK, JKM and health contributions count as taxable income; the employee's JHT and JP are deducted.

Tax is about 12.2% of salary, and about 14.9% is withheld in total. The employer adds roughly $120 (1.97 million rupiah) a month: JKK 72,000, JKM 90,000, JHT 1,110,000, JP 221,726 and health 480,000 rupiah. The full cost is about $1,800 (31.97 million rupiah) a month.

Corporate income tax and dividends

The standard corporate income tax rate (PPh Badan) is 22%. A company established or managed in Indonesia is taxed on worldwide income; a foreign company only on Indonesian income, including via a permanent establishment.

Example: the small company discount

A PT with turnover of $560,000 (10 billion rupiah) and taxable profit of $56,000 (1 billion rupiah). The discounted share of profit is 4.8 / 10 × 1 billion = $27,000 (480 million rupiah), taxed at 11%, which is 52.8 million. The remaining 520 million is taxed at 22%, which is 114.4 million. Total tax is $9,400 (167.2 million rupiah), an effective rate of 16.72% instead of 22%.

Losses carry forward for five years, up to ten in certain incentivised industries; carrybacks are not allowed. The tax holiday for large pioneer-industry projects, a reduction for investments from $5.6 million (100 billion rupiah) and full exemption from $28 million (500 billion rupiah), is closed to new applications: under PMK 69/2024 they were accepted until 31 December 2025, and in 2026 the government is still only discussing a replacement. Super deductions of up to 200% of training and 300% of R&D costs remain. The global minimum tax applies from 1 January 2025 (IIR and DMTT) and from 1 January 2026 (UTPR).

Dividends

Dividends between Indonesian companies are exempt. A resident individual pays a 10% final tax or nothing if the dividends are reinvested in Indonesia; a non-resident pays 20%, which a treaty may reduce. Foreign listed dividends and active foreign business income can be exempt if reinvested in Indonesia; for dividends from a foreign unlisted company, at least 30% of after-tax profit, pro rata, must be reinvested.

Controlled foreign companies

If Indonesian residents directly or indirectly hold at least 50% of an unlisted foreign company, its passive income (interest, dividends, royalties, rent and gains on assets) can be treated as a dividend received even if nothing is paid out. Review any offshore holding structure before you become resident, see our page on controlled foreign companies.

To set up a PT and open an account, see company registration in Indonesia and business accounts in Indonesia.

VAT in Indonesia: 12% on paper, 11% in practice

The Harmonised Tax Regulations Law raised value added tax (PPN) to 11% in April 2022 and to 12% from 1 January 2025. But under Finance Minister Regulation PMK 131/2024 everything except luxury goods is taxed on a base of 11/12 of the price, so 12% × 11/12 = 11% and shoppers saw no change. Cuts were discussed in 2025, but the rate and the 11/12 mechanism were unchanged in 2026.

Registration threshold

A business with turnover above $270,000 (4.8 billion rupiah) a year must register as a taxable entrepreneur for value added tax (PKP, pengusaha kena pajak). Voluntary registration below the threshold is possible and useful if your clients want to reclaim input tax. Invoices are electronic, and the return is due by the end of the following month, with payment before filing.

Regional consumption taxes

Restaurant and hotel services are not subject to value added tax but to a regional tax, PBJT, which Law 1/2022 caps at 10%. For discos, karaoke, nightclubs, bars and spas the law sets a separate band of 40-75%. So a Bali restaurant bill often shows a tax line, while the service charge is not a tax.

The 0.5% MSME regime, freelancers and digital nomads

The MSME regime (UMKM, usaha mikro, kecil dan menengah, micro, small and medium enterprises) lets you pay 0.5% of turnover instead of tax on profit. Government Regulation PP 20/2026, in force from 22 April 2026, reshaped it substantially.

The $270,000 (4.8 billion rupiah) threshold counts all business and professional income, including foreign income, aggregated across husband, wife and their PT Perorangan companies. Exceed it and the regime is lost from the next year. Moving a consulting practice into a PT Perorangan to pay 0.5% does not work either, and only Indonesian citizens can set one up anyway.

Example. A resident individual sells goods with annual turnover of $68,000 (1.2 billion rupiah). Tax: (1,200,000,000 - 500,000,000) × 0.5% = $200 (3,500,000 rupiah) for the year. It is paid monthly by the 15th of the next month once the tax-free 500 million is used up. With turnover of $27,000 (480 million rupiah) there is no tax at all.

Freelancers and independent professionals

A freelancer with turnover up to $270,000 (4.8 billion rupiah) can skip full bookkeeping and use the deemed profit norm, NPPN (norma penghitungan penghasilan neto): profit is a set percentage of revenue by activity and region, taxed at the ordinary 5-35% scale. The tax office must be notified within the first three months of the year.

Digital nomads and the E33G visa

The E33G remote worker visa has been available since 1 April 2024 for people earning at least $60,000 a year from an employer or clients outside Indonesia. It is an immigration status, not a tax break: tax law contains no direct exemption for E33G holders. The E33G is issued as a KITAS, which the tax office may read as an intention to reside. Once resident, your foreign salary is formally part of worldwide income. Fewer days in the country and a clear centre of vital interests abroad strengthen a non-resident position, but there are no guarantees. For the visa terms see our page on the digital nomad visa in Indonesia.

Under PMK 37/2025 marketplaces are to withhold 0.5% of turnover from their sellers; the launch has already been postponed and is now set for 1 November 2026.

Property, cars, inheritance and crypto

Property taxes are mostly regional: Law 1/2022 (UU HKPD) sets the caps and provinces and regencies set the actual rates, so figures can differ between Bali, Jakarta and Lombok.

Example: buying a house for $170,000 (3 billion rupiah)

A resale house at a price of $170,000 (3,000,000,000 rupiah), in a regency with the maximum BPHTB rate of 5% and the minimum exemption of $4,500 (80 million rupiah).

In practice PBB-P2 is usually lower, as NJOP is often below market value and local rates below the cap; land deed official (PPAT) fees come on top. The bigger issue is ownership: a foreigner cannot hold freehold (Hak Milik). The options are a right of use (Hak Pakai) with a stay permit, a long lease or a building right through a PT PMA. Nominee arrangements carry serious legal risk. More in our section on investment property in Indonesia.

Inheritance and gifts

There is no inheritance, gift or net wealth tax. Inheritances and gifts between parents and children (first-degree relatives in a direct line) are not income, but gifts from unrelated people may be taxed as the recipient's income. Re-registering inherited land still triggers BPHTB, with a higher exemption of at least $17,000 (300 million rupiah).

Crypto

From 1 August 2025 (PMK 50/2025) crypto is treated as a financial asset on a par with securities: no value added tax is charged on transfers, and the seller pays a final tax of 0.21% of the transaction value on a licensed Indonesian exchange or 1% on a foreign platform appointed as a tax collector. If the platform does not withhold the tax, the seller must pay it directly. The tax is on turnover, not profit, so frequent traders feel it. For the wider picture, read our article on crypto and taxes when relocating.

Non-residents, withholding tax and tax treaties

A non-resident without a permanent establishment pays tax only on Indonesian income, almost always through withholding under Article 26 of the Income Tax Law, with no allowances.

To use a lower treaty rate, the recipient must be the beneficial owner and give the Indonesian payer a certificate of residence on the special form of the Indonesian tax authority (DGT), certified by the tax authority at home. Without it, the full 20% is withheld. Working from Indonesia for a foreign company for long periods can create a permanent establishment risk for it.

Double tax treaties

Indonesia has more than 70 treaties, and the MLI with its anti-abuse rules has applied since 1 August 2020.

The treaty with Russia has applied since 1 January 2003 and remains in force: Russia's 2023 suspension of treaties did not affect Indonesia. Under it, interest paid to the government is exempt and branch profits tax is cut from 20% to 12.5%.

There is no double tax treaty with Kazakhstan, Kyrgyzstan, Georgia or Azerbaijan. A resident who paid tax abroad can credit it, but only up to the Indonesian tax on the same income, and no credit is given for exempt income.

A treaty does not override the other country's residency rules: a person who remains resident there still declares income there. Dual residency is settled by the tie-breakers: permanent home, centre of vital interests, habitual abode, then mutual agreement.

Filing, deadlines and penalties

Penalties

From 1 January 2025 all filing runs through the Coretax system: registration, returns, e-invoices and payments. A foreign resident will need a tax number (NPWP), a local bank account and Coretax access. In the annual return residents report not just income but all worldwide assets and liabilities.

If you leave for good, deregister the tax number or make it inactive, or the filing duty continues. For bookkeeping and returns, see our audit and reporting service.

What it means if you are moving: the uncomfortable truth

The rates look moderate, but this is a worldwide tax system with fast-changing rules. Here is what glossy Bali guides leave out.

Worldwide income for most people. A resident pays tax on income from everywhere and declares foreign assets; the four-year territorial regime is only for approved foreign experts, not every KITAS holder.

A visa is not a tax status. Neither the E33G, nor the golden visa, nor any other permit exempts you from tax. A long-term KITAS can by itself show an intention to reside, in which case the 183 days no longer matter.

The 0.5% rate no longer works for a PT. Many Bali PT PMA guides still promise a 0.5% turnover tax, but since 22 April 2026 ordinary PTs and CVs are outside the regime, and existing users only keep their original period. Freelancers, consultants and bloggers are taxed at 5-35%, and moving the same services into a PT Perorangan will not get them to 0.5%.

The rules change on the fly. The 12% headline value added tax has applied since 2025 but on an 11/12 base; the marketplace seller tax has been postponed more than once; crypto rules were rewritten in 2025; PP 20/2026 changed the MSME regime. Check the figures on the date of your transaction.

Cash and currency controls. Cash of $5,600 (100 million rupiah) or more must be declared to customs on entry and exit, and since 1 July 2026 Bank Indonesia requires a supporting underlying document for purchases of foreign currency against rupiah above $10,000 a month.

Bureaucracy in Indonesian. Coretax and tax office letters are mostly in Bahasa Indonesia; it is easy to miss a deadline, so Murblz specialists handle filings together with local partners.

Related reading: all Indonesia programmes, taxes in Malaysia for comparison and taxes by country. For a structure tailored to your case, talk to Murblz specialists or start with company registration.

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