Summary
Architects in Indonesia earn fees from design projects, supervision, and consulting. Whether working independently or through an architectural firm, fees paid by entity clients trigger PPh 21 withholding at 50% DPP. This guide covers the full tax picture for Indonesian architects.
Tax Status of Architects
| Work Arrangement | Tax Treatment |
|---|---|
| Employee of architecture firm | PPh 21 withheld monthly by employer |
| Independent architect (freelance) | PPh 21 expert 50% DPP from entity clients |
| Studio owner (CV/PT) | Badan PPh (corporate tax) |
| Solo practice (perorangan) | SPT 1770, NPPN or bookkeeping |
Key Regulations
| Regulation | Article | Provision |
|---|---|---|
| UU PPh No. 36/2008 | Article 21(1) | Withholding on professional/expert income |
| PMK 168/PMK.03/2023 | Article 13(7) | DPP for expert workers = 50% of gross fee |
| PER-17/PJ/2015 | Appendix | NPPN 57%/55%/50% for architect KLU 71110 |
| PP 55/2022 | Article 7 | Final PPh 0.5% for MSME turnover < IDR 4.8B |
How to Calculate PPh
1. Design/Supervision Fee from Entity Client
Fees paid by a company (developer, contractor) to an independent architect are withheld at 50% DPP.
Example: Design fee IDR 80,000,000 from a developer.
- DPP = 50% x IDR 80,000,000 = IDR 40,000,000
- PPh 21 (assuming cumulative DPP still in 5% bracket): 5% x IDR 40,000,000 = IDR 2,000,000
At higher annual DPP (above IDR 60M/year cumulative), the 15% bracket applies.
2. Design Fee from Individual Client
If the client is an individual (private homeowner), there is no withholding obligation. The architect declares the income themselves in SPT 1770.
3. Deemed Net Income Norm (NPPN) for Architects
KLU 71110 (architectural activities) from PER-17/PJ/2015:
| City Size | Norm |
|---|---|
| Major city | 57% |
| Provincial capital | 55% |
| Other areas | 50% |
Example: Annual fee income IDR 500,000,000, Jakarta.
- Deemed net income (57%): IDR 285,000,000
- Less PTKP (TK/0): IDR 54,000,000
- Taxable income: IDR 231,000,000
- PPh: 5% x IDR 60M + 15% x IDR 171M = IDR 3M + IDR 25.65M = IDR 28,650,000
PPh Final 0.5% vs. NPPN Comparison
For IDR 500M turnover (all from individual clients, no withholding):
| Method | PPh |
|---|---|
| NPPN 57% | IDR 28,650,000 |
| Final PPh 0.5% (above IDR 500M) | IDR 0 (below threshold) |
Final PPh 0.5% wins when turnover is just above IDR 500M. NPPN becomes more attractive when there are large withheld credits to offset.
VAT for Architects
Architectural services are Taxable Services (JKP). Architects with turnover above IDR 4.8 billion/year must register as PKP and charge VAT 11% on all services.
Filing Your Annual Tax Return
- Use SPT 1770.
- Collect bukti potong from entity clients.
- Report income from individual clients separately.
- Choose: NPPN 57%, final PPh 0.5%, or bookkeeping.
- Deadline: 31 March of the following year.
Real-World Example
Dian, freelance architect, 2024:
| Source | Gross | PPh Withheld |
|---|---|---|
| Developer project A | IDR 200,000,000 | IDR 5,000,000 (PPh 21) |
| Developer project B | IDR 150,000,000 | IDR 3,750,000 (PPh 21) |
| Private homeowner projects | IDR 100,000,000 | — |
| Total | IDR 450,000,000 | IDR 8,750,000 |
Using NPPN 57%:
- Deemed net income = 57% x IDR 450M = IDR 256,500,000
- Less PTKP: IDR 54,000,000
- Taxable income: IDR 202,500,000
- PPh: 5% x IDR 60M + 15% x IDR 142.5M = IDR 3M + IDR 21.375M = IDR 24,375,000
- Less withheld: IDR 8,750,000
- Underpayment: IDR 15,625,000