Company Taxation
A foreign-owned company in Indonesia, a PT PMA, is an Indonesian taxpayer like any other, and the compliance burden is heavier than most newcomers expect. The rules were overhauled by the 2021 Harmonisation of Tax Regulations Law (UU HPP) and again across 2025 and 2026, so any older guide will mislead you on rates and filing. The figures here are current at the time of writing (mid-2026); confirm them before you act.
The corporate rate
Corporate income tax (PPh Badan) is a flat 22% of net taxable profit, not a progressive scale. That misconception is common and wrong. The rate has stood at 22% since 2022; the earlier 25% rate and a scheduled cut to 20% are both history. Publicly listed companies with at least 40% of their shares traded on the Indonesia Stock Exchange pay 19%.
Smaller companies get relief. Under Article 31E, a resident company with annual gross turnover up to Rp50 billion has the 22% rate halved on the portion of taxable income attributable to the first Rp4.8 billion of turnover, an effective 11% on that slice. The old 0.5% final tax on gross turnover, the PPh Final UMKM regime, is no longer open to companies: PP 20/2026, in force from 22 April 2026, restricts it to individuals, single-owner PT Perorangan and cooperatives. A conventional PT or PT PMA now pays the standard rates.
Withholding and VAT
Most Indonesian tax is collected at source, and your company does the collecting. It withholds PPh 21 on employee salaries, PPh 23 at 2% on payments to resident service providers, and PPh 26 at 20% on payments to non-residents, reduced under a tax treaty only if the recipient files a Certificate of Domicile (the DGT form). Foreign directors and staff pay their own personal income tax on Indonesian earnings on top of this. Once annual turnover exceeds Rp4.8 billion you must register as a taxable enterprise (PKP) and charge Value Added Tax (PPN), currently 11%.
Filing and deadlines
Filing is relentless and monthly. Corporate tax instalments (PPh 25) and withholding taxes are paid by the 15th of the following month; the monthly returns (SPT Masa) are due by the 20th. The annual corporate return (SPT Tahunan PPh Badan) is due four months after the financial year ends, 30 April for calendar-year companies, although the 2025-year deadline was extended once to 31 May 2026. A dormant company must still file nil returns. Skipping them draws a Rp1,000,000 penalty on the annual return and Rp500,000 on a VAT return, plus interest of roughly 2% a month on unpaid tax. Since January 2025 all of this runs through Coretax, the tax office's integrated online platform, which replaced the former DJP Online and e-Faktur systems and has been troublesome in practice.
Beyond filing, a PMA must keep its books in the Indonesian language, retain records for ten years, prepare accounts to Indonesian standards (PSAK) and document any related-party transactions. Rates, thresholds and the Coretax system itself shift from year to year. For company-specific advice and current filings, Okusi Associates is the authoritative reference.
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