Personal Taxation

Indonesians have never taken warmly to the tax office, and compliance remains low. But the system has been overhauled, and enforcement now reaches foreign residents.

Reside here more than 183 days in any twelve-month period and you are a resident taxpayer, liable on your worldwide income, subject to treaty relief. Progressive rates run 5% up to Rp60 million, 15% to Rp250 million, 25% to Rp500 million, 30% to Rp5 billion, and 35% above that. Non-residents pay a flat 20% on Indonesian-sourced income.

Residents need an NPWP. Since July 2024 an Indonesian's NIK serves as one; foreigners register a 16-digit number using passport plus KITAS or KITAP. Earning without an NPWP adds a 20% surcharge. Annual returns are filed through the Coretax system.

A warning: a "second" salary paid offshore does not escape Indonesian tax. As a resident you owe tax on it, and banks now report foreign transfers. The old FISKAL airport exit tax was abolished in 2011. If you would rather keep matters simple, Okusi Associates handles basic reporting for foreign residents.

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