InCorp offers a comprehensive range of solutions to ease the company registration process and help you create a viable roadmap for your business.
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Get assistance from experts with a decade of experience in assisting international business owners expanding into Indonesia.
Avoid any bureaucratic complexity when closing your company by engaging with our experienced legal advisors.
What type of legal entities should you choose to register a company in Indonesia? We can assist you in choosing which is the best one to grow your business.
To help businesses survive during this unfortunate time, InCorp provides corporate recovery in Indonesia and insolvency services.
Granting an environmental permit in Indonesia needs an Environmental Impact Analysis (AMDAL) in advance.
Obtaining property & land ownership in Indonesia offers some challenges for foreigners. However, buying property in Indonesia is attainable with specific resources and documents.
Recent regulatory changes have a knock-on effect on Indonesia's Merger & Acquisition landscape. Check on how we can navigate you through your M&A in Indonesia.
InCorp provides Virtual Office services Indonesia in various locations: Jakarta, Bali, Semarang, Surabaya, and Batam.
Applying for a B3 waste permit in Indonesia is important to ensure your business aligns with government regulations.
Business process outsourcing in Indonesia is a viable option to streamline bureaucratic complexities that hurdle your business expansion objectives.
InCorp offers a complete range of accounting service Indonesia, from tax reporting to auditing.
With professional financial audit services from InCorp, you can ensure all accounting activities are accurately recorded and compliant with Indonesian regulations.
Using an Employer of Record service to set your roots in Indonesia opens the doors to new opportunities in the country.
Financial and Operational Resilience services from InCorp are developed to support businesses and help them survive during this difficult time.
Payroll services in Indonesia are a practical solution to avoid unnecessary complexities while you focus on growing your business.
Using a recruitment agency in Indonesia will help you hire the best candidates for your company, saving you time and money.
Tax consulting in Indonesia are the shortcuts to fulfill the administrative obligations with high accuracy and in a timely manner.
The Indonesian government promotes tax holidays as one of the fiscal incentives to attract major foreign direct investment in Indonesia.
Operating businesses in Indonesia, entrepreneurs must comply with the regulations accordingly, especially concerning taxes.
Our expert consultants on tax reporting services in Indonesia ensure prompt fulfillment of administrative obligations with utmost accuracy.
Streamline your global business operations with a Global Mobility Service as one complete solution from InCorp Indonesia.
Immigration in Indonesia is one of the strictest and most complex processes due to its ever-changing regulations. InCorp provides a seamless experience in obtaining your stay and work permits.
Avoid any hassles by engaging with an experienced visa agent in Indonesia.
A dependent visa Indonesia is a document that allows foreigners to bring their family while settling down in the country.
Investor KITAS Indonesia is a stay permit that offers many benefits to investors that invest in the country.
Overseas Visas are required for Indonesians who are planning to stay abroad for an extended period of time.
KITAP is a permanent stay visa for foreigners who have intentions to stay in Indonesia.
Foreign retirees often find their plans stuck due to the complex visa application process. InCorp helps expedite the process.
Obtaining a social visa is daunting if you are not familiar with the countrys complex bureaucratic processes. Consult with us for a seamless Indonesian visa application experience.
Foreigners married to an Indonesian citizen are eligible for a spouse-sponsored KITAS.
Learn how to obtain an Indonesian tourist visa seamlessly and securely, directly from a trusted visa and travel agent.
Get assistance from a trusted visa agent in Indonesia to make your traveling plan to Indonesia even more convenient.
Expedite your Indonesian work permit application process by engaging with a trusted visa agent.
If you’re a member of the Indonesian diaspora and have lost your citizenship, you can get a diaspora visa to return home more quickly. InCorp Indonesia can help you take full advantage of this benefit.
All imported goods must obtain permission granted by specific governing bodies prior to entering the local market.
Learn more about the cosmetic product registration services in Indonesia.
Learn more about exporting goods to Indonesia.
Learn more about the food & beverage product registration services in Indonesia
Learn how to go through halal certification in Indonesia directly from experts successfully.
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Learn more about importing goods from Indonesia
An Importer of Record in Indonesia is a legal service that enables companies to import products into Indonesia, through an import partner.
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Learn more about the SNI registration services in Indonesia.
Register a trademark is necessary to avoid legal issues in the future. InCorp can help you with Trademark Registration services in Indonesia.
Compliance is one of the most challenging parts of business overseas, especially in a country packed with complex bureaucratic processes such as Indonesia.
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Due Diligence services are needed to assess the credibility of the company or partner you wish to work with or acquire in Indonesia
From Company Regulations to Employment Agreement Drafting, Employment law services from InCorp will help you to compliance with employment policy in Indonesia.
InCorp’s legal consultation services in Indonesia are crafted to help your business settle and fully comply with the latest regulations.
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As the market-entry consulting firm in Indonesia, InCorp provides a wide range of customized solutions to ease the business incorporation process.
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IMEI Registration in Indonesia is necessary to ensure telecommunication devices from abroad can function properly in Indonesia.
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Improve your business by knowing the market conditions in Indonesia through market research services in Indonesia.
InCorp can help you gain information about your competitor's product through mystery shopping.
It may be old, but the adage has always remained true and relevant: one of the constant things in the world is taxes – even capital gains tax Indonesia. It doesn’t matter which country you go to. In some way or form, you will pay for it.
Indonesia is no different. Whether you’re an employee, consumer, or business owner; whether you live in Jakarta or Bali, you are bound by the laws of taxation. What’s important is to remember these important points: what you will pay, how much to pay, also how and when to file the report.
Cekindo is here to make sure you just don’t learn these things but also pay them in compliance with the rules and regulations of the country. Know the basics of accounting and tax reporting, as well as capital gains tax Indonesia.
The individual income tax is a levy on the different sources of income. These include capital gains tax Indonesia from the transfer or sale of property, rents and other forms of passive income, self-employment income, and, of course, employment income.
Different types of people need to pay individual income tax:
These are the Indonesian nationals since birth. This person will continue to pay taxes even when he or she is working abroad until he or she decides to leave the country permanently.
A foreign resident, for the sole basis of determining taxation, is an alien who has stayed in the country for no less than 183 days over 12 months. During the fiscal year, this person decides (or thinks about) living in the country for good.
These are foreign individuals who do not meet the criteria to be considered as tax residents but are earning money in Indonesia.
It’s essential to know which of these you or your employees belong to since it affects your tax rate and its basis. For example, Indonesia, like some countries, adopts the worldwide income principle. It means if you’re a tax resident in the country, you need to pay taxes to the Indonesian government even for income earned overseas. The only time you can avoid this is if your country where you’re working and Indonesia has a double taxation agreement.
Meanwhile, if you’re a foreign non-resident, your income tax is based on your earnings in the country only.
With these in mind, here’s your tax rate:
If you’re an individual tax resident (local or foreign)
As you can see above, Indonesia uses a progressive tax rate.
If you’re a tax non-resident:20% based on gross income
Other income-related tax rates to keep in mind:
Concerning tax reporting in Indonesia, the responsibility for individual income tax lies on the resident or the employee. The country implements the self-assessment system. In this process, the taxpayer files its annual return detailing all its income and assets, and liabilities. But the law also compels the employers to withhold a portion of the salary for taxes (withholding tax).
The corporate income tax, on the other hand, is straightforward. It applies a 25% flat rate on its income unless it meets certain conditions, in which case the effective rate is lower:
Here’s the question: who pays the corporate tax? The answer depends on whether the company is a tax resident or has a permanent establishment (PE) in the country. A business is said to be a tax resident if he has a domicile (or business address) in Indonesia. It is also a resident if it has a PE in the country. In both cases, the company should be engaged in regular trading or business activities in Indonesia during the fiscal period.
If the foreign company doesn’t have a PE but performs business activities, the tax-paying Indonesian party should withhold the corresponding tax of the foreign company to settle its liabilities.
Under Article 21 on withholding taxes, employers need to withhold taxes on incomes, including a severance payment, of employees every month. The withheld taxes may become prepaid taxes, which means the employee may be entitled to a refund at the end of the fiscal year or a credit to their final tax liability. It may also represent the person’s final tax.
Corporations may also have withholding taxes especially for certain types of dividends including those not paid from the retained earnings.
Article 22 governs withholding taxes for imported goods and transactions to the authorized government body. While article 23 covers withholding taxes deducted while using a non-fixed asset rental or services rendered by corporate vendors, which is 2% of the gross fees.
Non-tax residents who received other forms of income including pension, interest, and dividends pay 20% tax on these payments, withheld by a resident taxpayer, whether an individual, organization or company.
VAT in Indonesia is the tax imposed on many goods and services that go in and out of Indonesia. In general, it has a flat rate of 10%. It also applies to services performed by foreigners overseas that benefit Indonesia.
The flat rate, however, can go up or down depending on the goods and services offered. Most of the exports, for example, are zero-rated. Many services also do not have to pay VAT. These include but are not limited to non-commercial broadcasting, insurance, financial, hotel, education, stamp-requiring mail services, and medical health. Intra-government business transactions are also exempted from the VAT.
Goods sales tax is a type of tax levied on the supply chain, which means the tax is applied upon the importation or delivery of the considered luxury goods. As long as the product is taxable, it may be covered by LGST. The rate can go as high as 200%, which is the limit, or as low as 10%.
Because LGST raises the price of the commodity significantly, retailers encourage shoppers with a tax rebate, which can be 10%. But to take advantage of this, buyers must be tourists who have not been staying in the country for over 2 months. They can also claim it only at VAT refund centers and only on the day of departure. They also need to bring the original invoice with the reflected tax. The refund doesn’t apply to foreign residents.
As one of the global traders in the world, Indonesia has relaxed some of its policies on customs duties. In many cases, it’s been lower than before. But the rate can be as much as 150% or on average, which is 40%. Some goods may also be zero-rated. Importation of luxury goods gets some of the highest taxes.
Tax compliance doesn’t only mean paying the correct taxes. It also compels you to pay them on time. Here are some of the dates to remember.
Let’s face it, taxes are complicated especially in countries where laws can be just as confusing. On top of the information above, you need to know:
The last thing you want to happen is not to be compliant, whether it’s a deliberate choice or not. Violations can carry not only hefty fines but also other serious penalties including imprisonment.
Make accounting and tax reporting hassle-free. Send us your question below. Our business consultants will get in touch with you within 24 hours.
With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.
Disclaimer: The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.
We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.
We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.