08
Feb
2019

Individual Income Tax in Indonesia

Who is a domestic tax subject?

Pursuant to the Indonesian Income Tax Law, a domestic tax subject is an individual who: (i) resides in Indonesia for more than 183 days within 12 months, or (ii) has the intention to reside in Indonesia.

 

What is subject to tax (object)?

Any income, i.e. additional economic ability received by a domestic tax subject, whether sourced in Indonesia or sourced from outside Indonesia, that can be used for consumption or adding the wealth of the subject, in any kind of any nature.

If both of the above subjective and objective criteria are met, you are required to pay taxes in Indonesia, and should register with the Indonesian tax authorities to get a Tax ID Number (NPWP).

 

Obligations

 The deadline to submit your annual income tax report for the year 2018 is 31 March 2019. Indonesia taxes worldwide income, and tax reporting is self-assessed. Annual income tax reporting relates to any income (domestic or foreign sourced income) earned during the year. As part of the annual income tax report, a list of assets and debts should be submitted, which list includes:

  1. assets as reported in the previous year, unless the assets are sold during the year of reporting;
  2. any assets of transportation (cars, motorcycles);
  3. cash or its equivalent;
  4. immovable assets, i.e. electronics, valuable furniture or collections;
  5. jewelry;
  6. land and buildings;
  7. other income information and/or debt obligations (if any).

 

E-Fin

Before you can file and report your annual income tax, the following documents should be prepared:

  • Withholding tax form from employer (Formulir 1721 A1 or A2);
  • EFIN

EFIN or Electronic Filing Identification Number is an identification number given by the tax office to the taxpayer to do an e-filing or an online tax reporting. To obtain an EFIN, the taxpayer may visit the nearest tax office to submit the Efin Activation Form, together with a copy of NPWP, identity card and power of attorney (if submitted by someone else).

 

E-Billing

At the end of the year, you should have an overview of all your income (both domestic and foreign sourced income) received during the year. If, after consolidating all your income, there is still tax to be paid, you will need to first pay the underpaid taxes before you can submit your tax report. This payment can be done through bank transfer by creating an online E-Billing or ID Billing before the 31 March.

 

E-Filing

Once you have paid the underpaid taxes (if any), you are ready to submit your annual income tax report. This can be done using the electronic filing system through the internet via the Tax Office platform: http://www.pajak.go.id or other Application Service Provider (ASP).

 

This overview is intended solely to provide a general overview, for informational purposes. It does not constitute tax advice and should not be relied upon as such. For further information, please feel free to contact us through info@purnomo-consult.com or send a text to +62 811 911 2147.

 

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