Reviewed by Florent Delente, Founder, ILA Global Consulting. Last updated: October 2026.

Indonesia taxes resident individuals on their worldwide income at progressive rates from 5% to 35%, and taxes companies at a flat 22%. VAT is 12% on paper, but for most goods and services it is charged on a base of 11/12 of the price, which gives an effective rate of 11%. Non-residents pay a 20% withholding tax on Indonesian income unless a tax treaty lowers it. You become a resident after more than 183 days in Indonesia in any 12 months, or from the day you arrive if you hold a stay permit (KITAS) valid for more than 183 days.

This guide is for foreigners living in Bali or Jakarta on a KITAS, and for founders of a foreign-owned company (PT PMA). It puts every main rate in one place and explains what changed in 2025 and 2026: Coretax, the VAT mechanism and the 0.5% small business tax. If you would rather hand over your annual return, ILA’s tax declaration service prepares and files personal returns for foreign residents in English and French.

USD amounts are approximate, at IDR 17,900 per USD (Katadata, 5 October 2026).

What are the main tax rates in Indonesia in 2026?

Indonesia tax rates

Tax Rate in 2026 Who it applies to Legal basis
Personal income tax 5%, 15%, 25%, 30%, 35% (progressive) Resident individuals, on worldwide income Income Tax Law Art. 17, as amended by UU HPP
Non-taxable allowance (PTKP) IDR 54,000,000 a year, plus IDR 4,500,000 for a spouse and per dependant (max. 3) Resident individuals PMK 101/2016
Non-resident withholding (PPh 26) 20% of gross, unless a treaty reduces it Non-resident individuals and companies with Indonesian income Income Tax Law Art. 26
Corporate income tax 22% Resident companies, including PT PMA UU HPP
Small company discount (Art. 31E) 50% off the rate on profit linked to the first IDR 4.8 billion of turnover Companies with turnover up to IDR 50 billion Income Tax Law Art. 31E
Final tax on turnover 0.5% of gross turnover Individuals, single-person PTs and cooperatives with turnover up to IDR 4.8 billion; no longer new PTs, CVs or firms PP 55/2022 as amended by PP 20/2026
Dividends to resident individuals 10% final, or exempt if reinvested in Indonesia Indonesian residents Income Tax Law, UU HPP
Branch profits tax 20% of after-tax profit, unless reinvested Permanent establishments of foreign companies Income Tax Law Art. 26(4)
VAT (PPN) 12% statutory; 11% effective for most goods and services Supplies by VAT-registered businesses UU HPP; PMK 131/2024
Rental of land or buildings 10% final Landlords, withheld by corporate tenants Art. 4(2)
Sale of land or buildings 2.5% final on the gross value Sellers Art. 4(2)

Sources: PwC Worldwide Tax Summaries, Indonesia, last reviewed 11 June 2026; UU HPP, JDIH BPK; PP 55/2022, JDIH BPK; PP 20/2026, JDIH Kemenkeu.

Each line is explained below, with the traps we see most often.

When do you become an Indonesian tax resident?

You are a resident taxpayer (subjek pajak dalam negeri, SPDN) if you meet any one of three tests in Article 2(3) of the Income Tax Law:

  1. You live in Indonesia: a home here that you can use at any time, and your main personal, social or economic activity is here.
  2. You are physically present for more than 183 days in any 12 month period. The days do not have to be consecutive, the 12 months can straddle two calendar years, and a part day counts as a full day.
  3. You are here during a tax year with the intention to reside.

The Directorate General of Taxes (DGT) restated these tests in PER-23/PJ/2025, issued in December 2025. It lists the documents that prove an intention to reside: a permanent stay permit (KITAP), a limited stay visa (VITAS) or limited stay permit (ITAS, the KITAS) valid for more than 183 days, a work or business contract in Indonesia for more than 183 days, a lease of more than 183 days, or proof that your family has moved here (DDTCNews, 30 January 2026).

In practice, a one-year KITAS of any type (investor, working, remote worker, retirement, spouse) makes you a resident from arrival. In June 2026 the Singaraja tax office told Bali visa agents that retirement permit holders are not exempt either (DGT, KPP Pratama Singaraja, June 2026), contrary to an older ILA post.

Non-residents are taxed only on Indonesian-source income, mostly through 20% withholding (PPh 26) by the payer (PwC). A tax treaty can override Indonesia’s residence tests when you are also resident at home; see the treaty section below.

What are the personal income tax brackets in 2026?

The brackets set by the Harmonisation of Tax Regulations Law (UU HPP, Law 7/2021) have applied since tax year 2022 and are unchanged in 2026.

Annual taxable income Rate Approx. USD band
Up to IDR 60,000,000 5% Up to 3,350
Over IDR 60,000,000 to IDR 250,000,000 15% 3,350 to 13,970
Over IDR 250,000,000 to IDR 500,000,000 25% 13,970 to 27,930
Over IDR 500,000,000 to IDR 5,000,000,000 30% 27,930 to 279,330
Over IDR 5,000,000,000 35% Over 279,330

Source: PwC, Taxes on personal income (reviewed 11 June 2026); UU HPP, JDIH BPK.

How much income is tax free (PTKP)?

The non-taxable allowance (penghasilan tidak kena pajak, PTKP) is deducted before the brackets apply. The old post called it a “salary exemption of IDR 54 million”. It is a personal allowance that depends on family status, and it is not available to non-residents.

Status Code Annual PTKP
Single, no dependants TK/0 IDR 54,000,000
Single, 1 / 2 / 3 dependants TK/1 to TK/3 IDR 58,500,000 / 63,000,000 / 67,500,000
Married, no dependants K/0 IDR 58,500,000
Married, 1 / 2 / 3 dependants K/1 to K/3 IDR 63,000,000 / 67,500,000 / 72,000,000

Source: PwC, Deductions (reviewed 11 June 2026). Employees can also deduct an occupational expense of 5% of gross income, capped at IDR 6,000,000 a year, and their own pension contributions, and some religious contributions such as zakat paid through approved bodies are deductible.

Worked example: a foreign manager in Bali

Marc is single, holds a working KITAS and earns IDR 50,000,000 a month (about USD 2,790) from a PT PMA in Canggu. Ignoring pension contributions:

  • Gross annual salary: IDR 600,000,000
  • Less occupational expense (capped): IDR 6,000,000
  • Less PTKP (TK/0): IDR 54,000,000
  • Taxable income: IDR 540,000,000

Tax: 5% x 60,000,000 = IDR 3,000,000; 15% x 190,000,000 = IDR 28,500,000; 25% x 250,000,000 = IDR 62,500,000; 30% x 40,000,000 = IDR 12,000,000. Total IDR 106,000,000 (about USD 5,920), or 17.7% of gross salary. His employer withholds it through the year. Any foreign income, such as rent from a flat at home, goes on his annual return with a credit or treaty relief.

How is tax withheld from salaries under the TER method?

Since 1 January 2024, employers withhold employee income tax (PPh 21) with the average effective rate (tarif efektif rata-rata, TER) method under PP 58/2023 and its implementing regulation PMK 168/2023.

  • January to November: the employer multiplies the monthly gross pay by a TER percentage from one of three tables. Table A covers TK/0, TK/1 and K/0; table B covers TK/2, TK/3, K/1 and K/2; table C covers K/3.
  • December (or the last month of employment): the employer recalculates the full year with the normal brackets above and withholds the difference. That is why December payslips often show a much larger deduction.
  • Daily and casual workers use a daily TER rate.

TER changes timing, not the final amount. If you leave mid-year, ask for your annual withholding slip before your last day.

For Bali employers in 2026: PMK 105/2025 lets the government bear the PPh 21 of employees earning under IDR 10,000,000 a month in five sectors, including tourism, for the whole of 2026, provided their NIK or NPWP is registered with the tax office. Many hotel, villa and restaurant staff fall in this group.

Can foreigners be taxed only on their Indonesian income?

Some can, but far fewer than older articles suggest. The 2020 Job Creation Law created a territorial option: a foreign resident with “certain expertise” pays Indonesian tax only on Indonesian-source income for the first four tax years of residency. The conditions in PMK 18/2021 are strict (DGT article, 3 September 2021):

  • You hold one of 25 positions listed in Annex II of PMK 18/2021, with expertise in science, technology or mathematics, and an obligation to transfer knowledge. Foreign researchers also qualify.
  • You prove the expertise with a certificate from a government-approved body, a degree, and/or at least five years of work experience.
  • You apply to the DGT and receive approval. It is not automatic.
  • You do not claim benefits under a tax treaty. You choose one or the other.

KPMG Indonesia’s view, reported in December 2024, is that the regime fits workers employed by Indonesian entities, not remote workers paid by foreign companies (Pajak.com, December 2024). The old version of this guide implied every foreigner gets four tax-free years on foreign income. That is wrong. If you do qualify, you still file a return and report your Indonesian income. Retirees and investors usually do not qualify; digital nomads are covered in our digital nomad tax guide.

How are dividends, interest, rent and property sales taxed?

Several types of income carry a final tax: the payer withholds it and nothing more is due on your annual return, though you still report the income.

Income (resident individual) Tax Notes
Dividends from an Indonesian company 10% final Exempt if reinvested in Indonesia within the set period
Interest on Indonesian bank deposits and savings 20% final Bond interest 10%
Rent from land or buildings 10% final on gross rent Withheld by a corporate tenant; otherwise you pay it yourself by the 15th of the following month
Sale of land or buildings 2.5% final on gross value Paid before the deed is signed
Sale of listed Indonesian shares 0.1% of proceeds Withheld by the broker
Severance pay 0% up to IDR 50 million, then 5%, 15% and 25% Carried over from our earlier post

Sources: PwC, Income determination; PwC, Other taxes. Property taxes (PBB, BPHTB, VAT on new builds) are covered in our property tax guide.

What is the corporate income tax rate in Indonesia?

The standard rate is 22% of net taxable profit. Listed companies with at least 40% of shares in public hands can get 19% (PwC, Corporate income).

Article 31E discount. A company with gross turnover up to IDR 50 billion (about USD 2.8 million) gets a 50% rate reduction on the share of its profit that corresponds to the first IDR 4.8 billion of turnover. The old post described this as “a reduced rate between 11 and 13%”, which was not how the rule works.

Worked example: a PT PMA in Seminyak has turnover of IDR 12 billion and taxable profit of IDR 1.2 billion.

  • Profit linked to the first IDR 4.8 billion of turnover: 4.8 / 12 x 1,200,000,000 = IDR 480,000,000, taxed at 11% = IDR 52,800,000.
  • Remaining profit: IDR 720,000,000 at 22% = IDR 158,400,000.
  • Total IDR 211,200,000, an effective 17.6% instead of 22% (IDR 264,000,000). The saving is IDR 52,800,000, about USD 2,950.

The 0.5% final tax is no longer open to new companies. Under PP 55/2022, small businesses with turnover up to IDR 4.8 billion could pay 0.5% of turnover instead of profit tax, for a limited number of years (three for a PT). PP 20/2026, in force since 22 April 2026, narrows the regime to individuals, single-person companies (PT Perorangan) and cooperatives. Ordinary PTs, which includes every PT PMA, CVs and firms can no longer start using it; those already inside keep only what remains of their PP 55/2022 period. Individuals keep the first IDR 500 million of turnover tax free, and income from independent professional work (consultants, doctors, notaries, and now influencers and content creators) is excluded (Infiniti, PP 20/2026 summary; Investortrust, 2 June 2026). If a Bali company plan relies on “0.5% tax”, redo the numbers.

Our corporate tax guide for PT PMAs covers monthly filings, deductible costs and transfer pricing.

What is the VAT rate in Indonesia in 2026: 11% or 12%?

Both numbers are correct, which is why people get confused. The UU HPP raised the statutory VAT rate to 12% from 1 January 2025. On 31 December 2024 the Ministry of Finance issued PMK 131/2024, which applies the 12% to a tax base of 11/12 of the selling price for everything except luxury goods subject to luxury goods tax (PPnBM). The result is an effective 11% for almost every business (PwC, Other taxes, reviewed 11 June 2026).

Example: a villa management company invoices a service fee of IDR 20,000,000.

  • Tax base: 11/12 x 20,000,000 = IDR 18,333,333
  • VAT at 12%: IDR 2,200,000, which is exactly 11% of the price.

For a luxury car or other PPnBM item, the full 12% applies to the full price. As of September 2026 the Finance Minister said there was no plan yet to cut the rate (IKPI, 11 September 2026).

A business must register for VAT (become a PKP) once turnover passes IDR 4.8 billion a year. Hotels, guest villas and restaurants charge the regional tax (PBJT) of up to 10% instead of VAT on those sales. ILA handles VAT and NPWP registration for companies.

Which withholding taxes apply in Indonesia?

Much of Indonesian tax is collected by the payer, not the person who earns the income. A PT PMA withholds on most payments it makes.

Article What it covers Rate
PPh 21 Salaries, fees and other payments to resident individuals Progressive rates through TER; 20% higher if the recipient has no NPWP
PPh 22 Imports and certain purchases 2.5% of import value with an importer ID (API), 7.5% without, 10% for certain consumer goods
PPh 23 Payments to resident companies: services and rental of movable assets; interest, royalties and prizes 2% of gross for services; 15% for interest, royalties and prizes; doubled without an NPWP
PPh 4(2) Final taxes: rent of land and buildings, construction, deposit interest, property sales 10%, 1.75% to 6%, 20% and 2.5%
PPh 26 Payments to non-residents: dividends, interest, royalties, services 20%, reduced under a treaty with the DGT form
Branch profits tax After-tax profit of a permanent establishment 20%, nil if reinvested in Indonesia by the following year

Sources: PwC, Withholding taxes (reviewed 11 June 2026); UU HPP.

The risk for small companies: a PT that pays a freelancer, a foreign consultant or a landlord owes the withholding whether or not it deducted it.

When are tax returns due, and how do you file in Coretax?

Since 1 January 2025, Indonesian tax administration runs on Coretax, the DGT’s new core system, under PMK 81/2024 (amended four times, most recently by PMK 1/2026). The 2025 annual returns, filed in 2026, were the first full season on Coretax (detikFinance, 16 January 2026). What changed for individuals:

  • You log in to coretaxdjp.pajak.go.id with an activated Coretax account. The old EFIN number is no longer needed to file (Pajakku, 12 February 2026).
  • You sign returns with a DGT authorisation code (KO DJP) or an electronic certificate, protected by a passphrase you set during activation.
  • Your tax number is either your activated NIK or a 16 digit NPWP. Our NPWP guide covers registration.
Obligation Deadline
Annual personal return (SPT Tahunan) and balance payment 31 March of the following year
Annual corporate return and payment 30 April of the following year (end of the fourth month)
Monthly instalments (PPh 25) and withholding payments 15th of the following month
Monthly withholding returns 20th of the following month
Extension of the annual return Up to 2 months, by notice before the deadline, with an estimate of the tax and payment of any balance

Sources: PwC, Tax administration (reviewed 11 June 2026); UU KUP Art. 3, as amended by UU HPP.

In 2026, because of Coretax start-up problems, the DGT waived late filing penalties for individuals who filed their 2025 return by 30 April 2026. The legal deadline stayed 31 March (DDTCNews, 31 March 2026). Do not count on the same relief in 2027.

A resident’s return also lists assets and debts at year end, including those abroad.

What are the penalties for late filing or payment?

Failure Penalty
Late annual return, individual IDR 100,000
Late annual return, company IDR 1,000,000
Late monthly VAT return IDR 500,000
Late other monthly return IDR 100,000
Late payment Monthly interest at the Ministry of Finance reference rate plus 5%, divided by 12, for up to 24 months; part of a month counts as a full month
Not registering or not filing, causing loss to the state Criminal offence: 6 months to 6 years in prison and a fine of 2 to 4 times the unpaid tax

Sources: UU KUP Art. 7, 9 and 39 as amended by UU HPP; PwC. The old personal tax post quoted a 2% monthly surcharge, which is the rule from before 2020.

The fixed fines are small. The real cost is the assessment that follows an audit, with interest.

How do tax treaties work, for example with France?

A double tax treaty (P3B) decides where you are resident when both countries claim you, and caps the tax the source country can withhold.

Residence tie-breaker. Under Article 4 of the France and Indonesia treaty (signed 1979), a dual resident is resident where they have a permanent home, then where their centre of vital interests is, then where they habitually live. A flat kept in Paris while you live in Bali on a KITAS is the classic conflict.

Withholding caps for French residents receiving Indonesian income:

Income paid from Indonesia to a French resident Domestic rate Treaty rate
Dividends, company holding 25% or more 20% 10%
Other dividends 20% 15%
Interest 20% 0%, 10% or 15% depending on the case
Royalties 20% 10%
Branch profits 20% 10%

Source: PwC, Withholding taxes; treaty Art. 10 to 12. The payer applies the treaty rate only with the DGT form (certificate of domicile) completed by the recipient and certified by the French tax office; without it, 20% applies.

How France removes double tax (treaty Art. 24): most income that Indonesia may tax under the treaty is exempt in France, but still counted to set your French rate; dividends, interest and royalties stay taxable in France with a credit for the Indonesian tax.

Claiming treaty benefits rules out the four year territorial regime, so compare both before you file.

Four mistakes that cost foreign residents money

  1. Assuming a KITAS has nothing to do with tax. A KITAS of more than 183 days makes you resident from arrival, whatever its type.
  2. Planning around 0.5% for a new PT PMA. Since PP 20/2026, a new PT pays 22%, with the Article 31E discount if eligible.
  3. Forgetting foreign income and assets. Credits for foreign tax only work if you declare the income.
  4. Leaving without closing the file. File a final return and ask for the NPWP to be deleted or set to inactive.

ILA’s accounting and tax team in Bali and Jakarta prepares personal and company returns in Coretax, in English or French. Contact us before 31 March, not after.

Want this guide offline? Get the free PDF version, or browse all 27 free ILA guides.

Frequently asked questions

What is the income tax rate for foreigners in Indonesia?

Residents, including foreigners on a KITAS, pay 5% to 35% on worldwide taxable income after allowances. Non-residents pay 20% withholding on Indonesian income, reduced if a treaty applies.

Is VAT in Indonesia 11% or 12% in 2026?

The legal rate is 12%. For everything except luxury goods it is applied to 11/12 of the price, so the effective rate is 11%. Luxury goods subject to PPnBM pay a full 12%.

Does a KITAS make me a tax resident?

Usually yes. A KITAS or KITAP valid for more than 183 days shows an intention to reside under PER-23/PJ/2025, so you are resident from arrival, even before you reach 183 days.

How much is the tax-free allowance in Indonesia?

IDR 54,000,000 a year for a single person, plus IDR 4,500,000 for a spouse and for each dependant up to three, so at most IDR 72,000,000.

When is the deadline to file personal income tax in Indonesia?

31 March for the previous calendar year, through Coretax. Companies file by 30 April.

Can my company still use the 0.5% tax?

Only if it is a single-person PT (PT Perorangan) or a cooperative, or an existing PT still inside its PP 55/2022 period. New ordinary PTs, including PT PMAs, cannot since PP 20/2026 took effect on 22 April 2026.

What is the tax on dividends in Indonesia?

10% final for resident individuals, nil if reinvested in Indonesia under the set conditions. Dividends to non-residents carry 20%, or the treaty rate (10% or 15% for France).

Sources

  1. PwC Worldwide Tax Summaries: Indonesia, Taxes on personal income (reviewed 11 June 2026)
  2. PwC Worldwide Tax Summaries: Indonesia, Residence (reviewed 11 June 2026)
  3. PwC Worldwide Tax Summaries: Indonesia, Deductions (reviewed 11 June 2026)
  4. PwC Worldwide Tax Summaries: Indonesia, Income determination (reviewed 11 June 2026)
  5. PwC Worldwide Tax Summaries: Indonesia, Other taxes, individual (reviewed 11 June 2026)
  6. PwC Worldwide Tax Summaries: Indonesia, Tax administration (reviewed 11 June 2026)
  7. PwC Worldwide Tax Summaries: Indonesia, Corporate income (reviewed 11 June 2026)
  8. PwC Worldwide Tax Summaries: Indonesia, Corporate other taxes, VAT (reviewed 11 June 2026)
  9. PwC Worldwide Tax Summaries: Indonesia, Withholding taxes (reviewed 11 June 2026)
  10. Law 7/2021 on Harmonisation of Tax Regulations (UU HPP), JDIH BPK
  11. PP 55/2022 on income tax adjustments, JDIH BPK
  12. PP 20/2026 amending PP 55/2022, JDIH Kemenkeu (22 April 2026)
  13. PP 58/2023 on PPh 21 withholding rates (TER), JDIH BPK
  14. PMK 18/PMK.03/2021, JDIH Kemenkeu
  15. PMK 131/2024 on VAT, JDIH Kemenkeu
  16. PMK 81/2024 on tax provisions for Coretax, JDIH Kemenkeu (PDF)
  17. PER-23/PJ/2025 on domestic and foreign tax subjects, DDTC legal database
  18. DDTCNews: Revised criteria for resident individuals (30 January 2026)
  19. DGT: KPP Singaraja briefs sponsors and visa agents on foreigners’ tax (June 2026)
  20. DGT article: When foreigners are taxed only on Indonesian income (3 September 2021)
  21. Pajak.com: KPMG on remote workers’ tax position (December 2024)
  22. Bisnis: PMK 105/2025, PPh 21 borne by government in five sectors for 2026 (5 January 2026)
  23. Infiniti: PP 20/2026 changes to the 0.5% final tax
  24. Investortrust: Final tax now only for individuals, PT Perorangan and cooperatives (2 June 2026)
  25. IKPI: Finance Minister on the VAT rate (11 September 2026)
  26. DDTCNews: 2026 annual return penalty relief for individuals (31 March 2026)
  27. detikFinance: Activating a Coretax account (16 January 2026)
  28. Pajakku: Is EFIN still needed under Coretax? (12 February 2026)
  29. Coretax DJP portal
  30. France and Indonesia tax convention, impots.gouv.fr
  31. Katadata: Rupiah at IDR 17,916 per USD (5 October 2026)