Indonesian Income Tax Rates

Corporate Income Tax

  • 25 percent on all income (normal rate)
  • a 5 percent lower than normal rate is applied to a Limited Company of which at least 40 percent of its shares are traded on the stock exchange market (IDX)
  • a 50 percent deduction from the normal rate is applied to companies with a gross turnover up to IDR 50 billion

VAT (Value Added Tax)

  • Input and Output mechanism
  • The current rate is 10 percent

Withholding tax – for payments to residents

  • 15 percent for interest, dividends and royalties
  • 2 percent for services
  • These withholding taxes are considered corporate tax prepayments
  • 10 percent for land and building rental (final tax)
  • Withholding tax calculated on sales/revenue is considered a final tax

Withholding tax – for payments to non-residents

  • 20 percent according to the domestic law, but can be reduced by using tax treaty provisions, or exempt for services that qualify as business profits

Individual Tax – the following progressive rates are charged to taxable annual income

  • Up to IDR 50 million, tax rate applied is 5 percent
  • Over IDR 50 million to IDR 250 million, tax rate applied is 15 percent
  • Over IDR 250 million to IDR 500 million, tax rate applied is 25 percent
  • Over IDR 500 million, tax rate applied is 30 percent

Tax Losses

  • Can be carried forward for 5 years

 

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