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Tax Glossary
Tax Treaty (P3B / Double Tax Agreement)
A Tax Treaty (P3B) is a bilateral agreement between two countries to avoid double taxation and prevent fiscal evasion on income sourced in either country. Governed by Article 32A of the Income Tax Law. Indonesia has tax treaties with over 70 countries. Treaties cover: taxation rights over business income, dividends, interest, royalties, and capital gains; PE definitions; and Mutual Agreement Procedure (MAP) for dispute resolution. Foreign taxpayers must present a Certificate of Residence (SKD) to claim treaty benefits.
Tax Glossary
Permanent Establishment (BUT)
A Permanent Establishment (BUT, Bentuk Usaha Tetap) is the form used by a non-resident individual who is not domiciled in Indonesia or who stays in Indonesia for no more than 183 days within a 12-month period, or by an entity not established and not domiciled in Indonesia, to conduct a business or activity in Indonesia. Governed by Article 2(5) of the Income Tax Law (UU PPh), a BUT is treated as a corporate tax subject. A BUT can take many forms: a branch office, a representative office, a factory, a workshop, a construction project, services rendered for more than 60 days in a 12-month period, a dependent agent, or even computers or automated equipment used to conduct business through the internet in Indonesia. The tax consequences are twofold: a BUT is subject to the 22% corporate income tax on taxable income, plus a 20% Branch Profit Tax on after-tax profit (Article 26(4) UU PPh), unless an applicable Double Tax Avoidance Treaty (P3B) provides otherwise.
Tax Guides
Permanent Establishment (BUT) in Indonesia: Definition, Forms, PPh Rate, and Filing
A Permanent Establishment (BUT) is the tax vehicle for foreign individuals or entities running a business or activity in Indonesia. This guide covers the BUT definition, its forms, applicable PPh rates, and filing obligations.
Tax Guides
Tax Guide for Expatriates and Foreign Nationals in Indonesia
Foreign nationals who are Indonesian tax residents (stay more than 183 days in a 12-month period) are subject to Indonesian income tax on worldwide income. Non-residents are taxed only on Indonesian-source income at a flat 20% withholding rate.
Tax Guides
Tax Guide for Stock and Mutual Fund Investors in Indonesia
Capital gains from Indonesian stock exchange (IDX) transactions are subject to a 0.1% final income tax on gross proceeds. Dividends from Indonesian companies are tax-exempt if reinvested under PMK 18/2021.
Tax Guides
Indonesia PPh Article 26 Guide: 20% Rate, Objects, and Withholding for Foreign Taxpayers
PPh Article 26 is Indonesia's withholding tax on Indonesia-sourced income paid to foreign taxpayers (WPLN) other than a permanent establishment. The standard rate is 20% on gross income. Tax treaties can reduce the rate. Legal basis: Article 26 of the Income Tax Law.
Tax Guides
Indonesia Crypto Miner Tax Guide 2026: General PPh Rates, 2.2% VAT, and How to File
A practical guide for crypto asset miners in Indonesia for tax year 2026. Covers the legal basis under MoF Reg 50/2025, general PPh rates, 2.2% specific-rate VAT, PKP threshold, filing steps, worked examples, and FAQs.