For those living or moving to Indonesia, whether in Bali or on other islands, one key obligation is obtaining a Tax Identification Number (TIN), known locally as a Nomor Pokok Wajib Pajak (NPWP).
The NPWP is an essential document for anyone conducting business in Indonesia or earning income, either locally or from abroad.
To get an NPWP in Indonesia, foreigners with a KITAS and taxable income must provide their KITAS and passport to the tax office or Directorate General of Taxes (Indonesia).
It is required for filing annual tax reports and is commonly used in various financial transactions, whether you’re an investor, business owner, or a resident.
In this article, we’ll guide you through understanding the Tax Identification Number (NPWP), why you need it, the pros and cons of having one, and how to get one.
Over the past years, ILA Global Consulting has built a strong reputation by helping hundreds of international clients invest in Indonesia and navigate the country’s legal, tax, and investment frameworks with precision and care.
Our team combines deep local knowledge with international best practices, ensuring that every solution is both compliant and strategic.
With a proven track record, clear communication, and a client-focused approach, ILA has become a trusted advisor for individuals and businesses looking to establish a strong, sustainable presence in Indonesia.
What is a Tax Identification Number (NPWP)?
The NPWP (Nomor Pokok Wajib Pajak) is a taxpayer identification number to identify the person through the tax office into the system called Coretax. From 2025, the number will be 16 digits.
Key requirements and uses of the NPWP include:
- It is mandatory for individuals aged 21 and above with a taxable income in Indonesia.
- It is compulsory for businesses operating in Indonesia, such as PT, CV, Representative Offices, and Joint Operations (KSO).
- The tax number is essential for tax filing and various financial transactions.
- Foreigners holding a KITAS (Limited Stay Permit) must obtain an NPWP to comply with regulations and file annual tax returns.
- Individuals working in Indonesia, investors, or those with residency should apply for an NPWP after receiving their KITAS.
- Married couples living in Indonesia can file their tax returns under one NPWP or use two separate tax numbers if they wish to separate their assets and income.
- Indonesia defines tax residency as living in the country for more than 183 days or expressing the intention to reside by holding a stay permit like a KITAS.
Understanding these regulations is key, especially if you are considering avoiding risk when buying property or looking into a villa investment in Bali.
| Terms | Definitions |
|---|---|
| NPWP (Nomor Pokok Wajib Pajak) |
Indonesia’s Taxpayer Identification Number (TIN) is required for individuals and businesses with taxable income. Becomes a 16-digit number from 2025. |
| KITAS (Kartu Izin Tinggal Terbatas) |
Limited stay permit for foreigners in Indonesia—required for those working, investing, or residing long-term. |
| Coretax | Indonesia’s centralized tax system connecting taxpayers, banks, and the Directorate General of Taxes (DJP). |
| PT / CV / KSO / Representative Office | Types of legal business entities in Indonesia: PT: Limited liability company CV: Limited partnership KSO: Joint operation (Kerja Sama Operasi) Representative Office: Non-commercial presence of a foreign company |
| Tax Resident | A person who stays in Indonesia for more than 183 days in a year or expresses intent to reside (e.g., via KITAS). |
Why Do You Need a Tax Identification Number (NPWP)?
Foreigners living in Indonesia will need an NPWP for several reasons. Banks are now requesting citizens provide the NPWP and are connecting bank accounts to the central tax system called Coretax.
An NPWP is necessary to perform international transactions and register some bank and crypto accounts through Indonesian platforms.
KITAS holders must declare their income tax between January and the end of March. The tax number is necessary to also report some transactions such as lease transactions, property acquisitions, purchasing vehicles etc.
If you are considering obtaining a residence permit in Bali or wondering how to move to Bali with your family, understanding the NPWP’s role is important.
The Tax Identification Number (TIN)/NPWP is also mandatory for company directors. When companies are registered, a PIC (person in charge) is declared in the tax system.
The director of the company is responsible for the annual tax filling and company tax filling cannot be done if the director did not comply with its personal tax declaration. In other words the director of a company has to be resident director by applying for a KITAS and obtaining a NPWP.
For those frequently traveling for business, knowing how to apply for an Indonesian multiple entry business visa is also highly beneficial.
The NPWP is the first step in getting all the documentation needed to complete the tax. After obtaining the NPWP, the KITAS holder or foreigner must apply for a personal EFIN (Electronic Filing Identification Number) and obtain a password to complete its obligations.
| Term | Definition |
|---|---|
| EFIN (Electronic Filing Identification Number) |
A personal code used to access and submit online tax filings in Indonesia. Issued after receiving an NPWP. |
What are the Advantages and Consequences of Having an NPWP?
a. Advantages of Having an NPWP
- Enables Compliance and Financial Transactions: An NPWP is essential for filing annual income tax returns between January and March for KITAS holders. It’s also necessary for reporting various financial transactions, including lease agreements, property acquisitions, and vehicle purchases. Banks now require NPWPs to register bank accounts, and it’s needed for certain international and crypto transactions.
- Facilitates Company Directorship: For directors of companies, having an NPWP is mandatory for tax filing, as the company’s tax filing cannot be completed without the director’s personal tax declaration.
b. Consequences of Having an NPWP
- Becomes a Tax Resident and Needs to Income: By having an NPWP and filing taxes in Indonesia, alongside holding a KITAS, a foreigner becomes a tax resident in Indonesia. This obligates them to report their income, although tax treaties may exist to avoid double taxation on certain incomes. Understanding this is key if you’re exploring Bali investment opportunities.
| Term | Definition |
|---|---|
| Tax Resident | A person who stays in Indonesia for more than 183 days in a year or expresses intent to reside (e.g., via KITAS). |
How to Get an NPWP in Bali, Indonesia?
The process is simple and fast. Foreigners need to provide their KITAS and passport. It can be done at the tax office quickly and the foreigner will receive a virtual card with the tax number.
Frequently Asked Questions (FAQ)
1. Should I get a NPWP after applying for a KITAS?
It is mandatory as a foreigner having a KITAS and taxable income to apply for a NPWP even if the person stays less than 183 days.
2. Can I get a NPWP with remote worker KITAS?
Yes you can get a NPWP if you have a remote worker KITAS. You can move your residency to Indonesia.
3. Should I declare my tax even if I have no income?
By having a NPWP you need to report your tax even if you received zero income in Indonesia. The declaration is even more important for directors who are responsible for the tax filling of the company.
4. Should I declare my tax if I have an investor KITAS?
The most common situation is to have shareholders, directors having an investor KITAS. It is mandatory to apply for a NPWP as a director in order to fill out the tax report.
Summary About NPWP or Tax Identification Number
The NPWP (Nomor Pokok Wajib Pajak) is Indonesia’s mandatory Taxpayer Identification Number (TIN) for individuals over 21 with taxable income and for all businesses operating in the country. From 2025, the NPWP will be a 16-digit number.
Foreigners residing in Indonesia with a KITAS (Limited Stay Permit) must obtain an NPWP to comply with regulations, file annual tax returns, and conduct various financial transactions, including banking and property acquisitions. This also applies to individuals working or investing in Indonesia.
The NPWP is the initial step for tax documentation, followed by obtaining a personal EFIN (Electronic Filing Identification Number). Acquiring an NPWP makes a foreigner a tax resident in Indonesia, obligating them to report their worldwide income.
The process to get an NPWP is simple, requiring a KITAS and passport at the tax office. ILA Global Consulting assists international clients in navigating Indonesia’s tax and legal frameworks.
With ILA by your side, nothing can go wrong. Schedule a free consultation today or learn more about our tax and accounting services.
