Corporate Tax Indonesia
A corporate income tax rate of 25 percent applies in Indonesia; however there are several exemptions for this.
If a company is domiciled in Indonesia, it is subject to the set of tax obligations set by the Indonesian Government. Understanding your companies tax obligations in Indonesia is crucial to ensuring its future success.
Similarly, a foreign company that has a permanent establishment in Indonesia – and carries out business activities through this local entity – falls under the Indonesian tax regime. If the foreign company does not have a permanent establishment in Indonesia but does generate income through business activities in Indonesia, then it needs to settle its tax liabilities through withholding of the tax by the Indonesian party paying the income. Small Enterprises obtain a 50 percent tax discount, imposed proportionally on taxable income of the part of gross turnover (up to IDR 4.8 billion). In July 2018, Government issued a regulation that set a 0.5% of revenue for income tax tariff on individual and corporate taxpayers with an annual gross turnover below IDR 4.8 billion (approximately USD $320,000).
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