TAXATION GUIDE FOR EXPATRIATE WORKING IN INDONESIA
A. Category for an Individual Taxpayer
A resident tax subject shall be:
· An individual residing in Indonesia or
· An individual who is present in Indonesia for more than 183 days in
any 12 month period, or
· An individual who is present in Indonesia in a tax year with an
intention to reside in Indonesia.
A non-resident tax subject shall be:
An individual not residing in Indonesia or who is present in Indonesia
for not more than 183 days in any 12 month period.
· who is conducting a business or carrying out activities through a
fixed based in Indonesia.
· Who derives income from Indonesia other than from conducting business
or carrying out activities through a fixed based in Indonesia.
A taxpayer is an individual or a body which, pursuant to provisions in the
tax law, is required to fulfill tax obligations, including tax collection
or tax withholding of certain taxes. (Article 1- paragraph (1) law No. 16
B. Tax Identification Number ( Nomor Pokok Wajib Pajak - NPWP)
What is a Tax Identification Number ?
The Tax Identification Number (NPWP) is a number issued to taxpayers by
the tax office to identify taxpayers and assist them in fulfilling their
tax obligations. (Article 1- paragraph (5) law No. 16 Year 2000 ).
How to get an NPWP
Taxpayer shall be obligated to register at the tax office in the
district in which the taxpayer resides (Article 2- paragraph (1) law No.
16 Year 2000 ) by submitting the following documents:
a. Registration and change of data form
b. Copy of passport
c. Copy of limited stay permit card (KITAS)
d. Copy of work permit (for a taxpayer who is an employee)
e. Copy of tax identification number of the employer (for a taxpayer who
is an employee)
f. Power of attorney (if his/her registration process is done by another
g. Copy of business permit (for a taxpayer who is conducting business or
is an independent professional)
An individual taxpayer who is an entrepreneur as mentioned in the
Circular Letter of Director General of Taxation No. SE-40/PJ.41/2000 is
an individual who has several places of business activities. He/she is
obligated to register his/her place of business activities as follows:
a. A taxpayer who has several places of business activities in one
operational area of the tax office must register each place of business
in the said tax office.
b. A taxpayer who has several places of business activities located in
the districts of several tax office must register each place of business
in each related tax office.
What if the taxpayer does not want register?
a. The Director General of Taxation has the authority to issue an NPWP
officially. (Article 2- paragraph (4) law No. 16 Year 2000).
b. If a taxpayer fails to register intentionally resulting in losses to
the state revenue, he/she shall be sentenced to imprisonment for a
period not exceeding 6 year and shall be subject to a fine for an amount
not exceeding four times the tax unpaid/underpaid. (Article 39-
paragraph (1) law No. 16 Year 2000).
What if there is a change in taxpayer's date?
A taxpayer may inform the tax office of any change in his data (such as
change of address, change of employer, etc.) by filing the registration
and change of data form at the tax office where the taxpayer is
What if the taxpayer is leaving Indonesia permanently or has applied for
an Exit Permit Only to the Immigration Office?
A taxpayer should state in writing that an Exit Permit Only (EPO) will
be forwarded to the tax office where he is registered, so that the tax
office will not issue a tax collection letter due to non filing or non
payment of the monthly Article 25 income tax.
The following are to be attached when submitting the deregistration form
(now known as registration and change of data form):
a. Exit Permit Only (EPO)
b. Statement from the employer stating that a taxpayer's contract in
Indonesia has ended (for a taxpayer who is an employee)
c. Cancellation of business permit letter (for a taxpayer who is
conducting business or is an independent professional)
d. Power of attorney (if his/her deregistration process is handled by
e. Original copy of taxpayer identification number card.
Before forwarding the EPO, the taxpayer should fulfill other tax
obligations such as:
a. Pay any tax due which has not been paid.
b. File an annual individual tax return for the year of departure, by
providing a closes approximation
of his/her global income.
c. File applications for deregistration of NPWP.
C. Monthly and Annual Income Return
After registering and obtaining the NPWP, a taxpayer has to file the
following tax returns:
a. Monthly Article 25 income tax return using tax payment slips (SSP) at
the latest 20 days from the end of the month. An individual who is not
conducting a business or who is not an independent professional is
exempted from filing the monthly returns.
b. Annual individual tax return (form 1770) at the latest 3 months from
the end of a tax year. The Form 1770 can obtained from the tax office.
(Article 3- paragraph (3) law No. 16 Year 2000).
What the taxpayer should know before completing the tax return: a.
Every taxpayer has to complete the tax return in Bahasa Indonesia
using latin letters, Arabic numerals, and Rupiah currency, then sign
and file it at the tax office where the taxpayer is registered.
(Article 3- paragraph (1) and 1 (a) law No. 16 Year 2000).
b. A taxpayer has to complete and file a tax return correctly,
thoroughly and clearly. The tax return has to be signed. (Article 4-
paragraph (1) law No. 16 Year 2000).
c. Where a tax return is completed and signed by a person other than
the taxpayer, a power of attorney must be attached. (Article 4-
paragraph (3) law No. 16 Year 2000).
d.Completion of annual income tax return by taxpayer who have to
maintain bookkeeping records must be accompanied by financial
statements in the form of balance sheet and income statement as well
as other information required to calculate the amount of taxable
income. (Article 4- paragraph (4) law No. 16 Year 2000).
e.For filing of 2001 annual income tax return, a taxpayer has to
attach a statement of assets and liabilities (MOF Decree No.
534/KMK.04/2000 dated December 22, 2000)
f.The filing of a tax return may be done by the registered mail
through the Post Office or by such others means regulated by the
decree of the Director General of Taxation. (Article 6- paragraph
(2) law No. 16 Year 2000).
D. Tax Payment
The taxpayer has to pay the tax due to the state treasury via Post Office
and/or a State Owned Bank or local Government Owned Bank or other place of
payment stipulated by the Minister of Finance. (Article 10- paragraph (1)
law No. 16 Year 2000).
Payment of Monthly Installment Article 25 Income Tax
For Monthly Article 25 Income Tax Return, the monthly tax installment
payment is due no later than 15 days from the end of the month. If the
15th is a public holiday, Saturday or Sunday, the due date is the
following day (Article 9- paragraph (1) law No. 16 Year 2000).
The amount of monthly installment which should be paid by a taxpayer
shall be equal to the tax due according to the annual income tax return
for the preceding year, deducted by income tax under Article 21,22,23
and 24: then divided by 12 (twelve) or the number of months for part of
the tax year. For the months before the due date of the annual income
tax return (January - February), the amount of monthly Article 25 income
tax shall be equal to such amount paid in the last month (December) of
the preceding tax year.
For n individual taxpayer who is conducting a business or is an
independent professional and has several places of business, the monthly
Article 25 income tax payable in the current tax year shall be 1 % (one
percent) of the monthly gross turnover from each place of business
(Section 3 of Circular Letter No.: SE-40/PJ.41/2000 dated 29 December
For a new taxpayer who is conducting a business or is an independent
professional, the monthly Article 25 income tax shall be equal to the
income tax liability calculated using the normal tax rate on annualized
net income, divided by 12 (twelve). The amount of that net income is
previously deducted by the non-taxable income threshold amount (Article
2 of Minister of Finance Decree No. 522/KMK.04/2000 dated 14 December
However, for a new taxpayer other than the above mentioned, the monthly
Article 25 income tax shall be equal to the income tax liability
calculated at 10 % of annualized net income, divided by 12 (twelve). The
amount of that net income is previously deducted by the non-taxable
income threshold amount (Circular Letter Number SE-31/PJ.4/1995 dated
June 21, 1995.
Payment of Annual Individual Tax Return Article 29 Income Tax
The tax underpayment based on the annual tax return should be paid by
the 25th of the third month after the end of a tax year or part of part
of year, before the annual tax return is filed (Article 9- paragraph (3)
law No. 16 Year 2000).
Payment of Tax Assessment
Additional payments required as result of a Tax Collection Letter (STP),
Tax Underpayment Assessment (SKPKB), Additional Tax Underpayment
Assessment (SKPKBT), or Tax Correction Notice, Decision letter on
Objection or Appeal should be paid at the latest one month from the date
of issuance (Article 9- paragraph (3) law No. 16 Year 2000).
Payment of Exit Tax
An individual taxpayer who travels abroad has to pay exit tax at a
counter located at each point of departure from Indonesia through land,
sea, and air. The tax is paid at the counter by using an Exit Tax Form
or paid at the post office or a bank authorized to receive tax payments
on behalf of Director General of Taxation by using tax payment slip
(SSP). (Article 25- paragraph (8) law No. 17 Year 2000).