Indonesia tax guide

Indonesia tax apply self assesment system.

Corporate Income Tax

Income tax for corporate are levied on revenue after deducted by main allowable deduction and tax credits.

Corporate income tax rate
Single tax rate of 25% from inoome before tax; or,

1% from monthly gross revenue for certain business with gross annual revenue less than 50billion, except for permanent establishment.

Tax facility a 50% rate reduction from 25% is provided for entity with sales up to IDR 50billion, 50% are given for taxable income in proportion of revenue up to IDR 4.8billion from IDR50billion,

Income subject to final income tax

Some income are subject to final tax are excluded from corporate income tax calculation. Income subject to final income tax is included income from rent, construction services, and interest from financial instruments provided by authorized financial insititution or bonds issuer. Dividends received or derived from a resident company and stemming from holdings in another Indonesian limited liability company are exempt from tax if the beneficiary exercises commercial activities and holds at least 25% of the shares of the payer and if the dividends come from non-distributed profits.

Income exempted from tax

These income can be exempted from tax: aid, donations and gifts received (as long as there are no commercial or work relations between the parties), inheritances, payments made by an insurance company (health, accident, life, education), the share of profits received by a member of a limited partnership without capital holding, affiliation, association or company.

Tax Rate For Foreign Companies
Tax rate applies in the same way to residents and non-residents.

Fiscal Loss
Fiscal loss are allowed to carried forward for 5 years as deduction to corporate income tax payable, in certain criteria tax facility for more than 5 years loss carry forward are given.

Other tax on business activity
Other tax apply on transaction is value added tax for sales and provision of service, including internal use of service.

Read more about Indonesia value added tax guide.

Main allowable deductions
Generally, all legitimate expenses linked to business activities are deductible from income when income tax is calculated, but there are many exceptions, including benefit in kind expense, and expenses related to company facilities for executive level. All expenses which associated with income subject to final income tax shall be excluded from allowable deductions.

Income tax credits (prepaid tax)
Income earned from Indonesian tax payer are withheld by payer and serves as corporate income tax credit. Corporate income tax monthly installment are required for company and individual who fulfill certain criteria. Income tax credit also include income tax imposed on import transactions of goods and services.

Date of reporting
Corporate income tax payment and reporting due date is the last day of 4th month of subsequent year of fiscal period.

Corporate income tax guide Indonesia
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