Date de publication : 06-10-1907
The following information are for the sole purpose of providing a general overview of the local taxation of the Corporate tax aspects of the country. In any case, it can not replace a tax advice, or be considered as an official information.
Yes we tax in Indonesia
New tax reform: No specific information
New tax treaties:
- Protocol to tax treaty between Indonesia and Netherlands enters into force.
- Tax treaty between Indonesia and Laos enters into force.
Local tax advisors
No specific information on the local tax advisors.
Local tax administration
Website Tax administration: Click here
Resident companies are taxed on their worldwide income. However, non-resident companies are only taxed on their revenues derived from Indonesia sources.
Entities are considered to be resident for tax purposes in Indonesia if such entity is established or domiciled in Indonesia and earns income in Indonesia (local sources or foreign sources of revenue).
However, the place of residence is subject to the relevant provisions of any applicable double tax treaty, if any.
Corporate Income Tax
The general CIT tax rate is 25%.
Non-taxable income includes the following:
- Certain dividends (participation exemption – minimum 25% detention)
- Certain capital gains
Non-deductible expenses includes the following:
- Dividends and other distribution of profits
- Interest in excess of the thin-capitalization threshold
- Administrative fines and penalties
- CIT and similar taxes (including foreign withholding taxes)
Carry forward : Yes 5 years, but some restrictions may apply
Carry back: No
Companies should submit the tax return annually within 4 months from the end of the year.
Books, records and documents should be retained for at least 10 years.
Annual tax returns are established by the company on a self-assessment system.
Companies shall pay monthly advance payments within 15 days from the end of every month.
Whithholding Taxes (payment to foreign companies)
The local tax rates in Indonesia are the following, subject to the provisions of an applicable double tax treaty, if any.
There is 20% WHT on the profits paid from a branch to its foreign head office
The general rate of WHT on dividends is 20%.
The general rate of WHT on interest is 20%.
The general rate of WHT on Royalties is 20%.
The general rate of WHT on management fees is 20%.
The general rate of WHT on technical services is 20%.
All types of services paid abroad are subject to a WHT between 0% and 15% (i.e. 10% WHT on Insurance premiums).
Capital gains are taxed as general income under the regular CIT.
Standard VAT tax rate is 10%
Zero-rated supplies include, subject to certain conditions:
- exports of goods;
Exempt supplies include, subject to certain conditions:
- Islamic financial services
- Insurance services
- Training and education
- Health services
Input tax credit can be claimed for VAT paid on purchases related to export goods.
Note: export of services is generally not zero rated, so no refund could be claim.
No other specific information of VAT in Indonesia.
The general statute of limitation is 5 years starting at the end of the year in which the tax return had to be filed.
There is no foreign exchange control in Indonesia.
There are thin capitalization rules in Indonesia. The interests derived from loans between related parties may not be deductible in case where interest exceeds some ratios.
Do not hesitate to share your experience in Indonesia with us in the comments below. Any comments are welcome !