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Tax Glossary
Corporate Income Tax (PPh Badan)
Corporate Income Tax (PPh Badan) is the tax on taxable income earned by corporate taxpayers in a tax year. Governed by Article 17 paragraph (1) (b) of the Income Tax Law (No. 36/2008). The standard corporate tax rate is 22% since tax year 2022 (previously 25%). Domestic public companies with at least 40% of shares traded on the Indonesia Stock Exchange qualify for a 3-percentage-point discount (19%). MSMEs with turnover below Rp 4.8 billion may apply a final tax rate of 0.5% under Government Regulation No. 55/2022.
Tax Glossary
Taxable Income (Corporate)
Corporate Taxable Income is the fiscal net income after loss compensation, multiplied by the corporate tax rate to compute tax due. Governed by Article 16 of the Income Tax Law. Calculation: Gross Income minus Allowable Expenses (Article 6 of the Income Tax Law) = Commercial Net Income; apply fiscal corrections (positive and negative) = Fiscal Net Income; deduct prior-year loss carry-forwards = Taxable Income.
Tax Guides
Corporate Annual Tax Return Guide via Coretax 2026
Complete guide to filing Indonesia's corporate annual income tax return via Coretax: legal basis, document checklist, Form 1771 walkthrough, PPh Article 29 calculation, and FAQ.
Tax Updates
DJP Extends Corporate Annual Tax Return Deadline to 31 May 2026 via KEP-71/PJ/2026
Indonesia's DGT issued KEP-71/PJ/2026 granting corporate taxpayers an extra month to file fiscal year 2025 annual returns until 31 May 2026, with administrative penalties waived during the Coretax transition.
Tax Glossary
Article 29 Income Tax (Balance Due)
PPh Article 29 is the remaining tax balance payable at year-end after deducting all tax credits paid or withheld throughout the year. Governed by Article 29 of Law No. 36/2008 on Income Tax (UU PPh). PPh 29 is calculated as: Annual Tax Liability (from annual return) MINUS Total Tax Credits (PPh 21, 25, 22, 23, 24, etc.). If the result is positive, it is PPh 29 (balance due), which must be paid. If the result is negative, it is PPh 28 (overpayment), which may be refunded or carried forward. PPh 29 must be settled before filing the annual return: by March 31 for individual taxpayers and April 30 for corporate taxpayers (Article 3 para. 3, UU KUP). Late payment incurs interest penalty of 2% per month (Article 9 para. 2b, UU KUP).
Tax Guides
Tax Guide for Programmers and Developers in Indonesia
Programmers and developers in Indonesia face two main tax scenarios: as a permanent employee (PPh 21 withheld monthly by the employer via TER) or as a freelancer (PPh 21 as expert worker with a 50% taxable base). Income from app marketplaces, international freelance platforms, and software licences carries separate tax obligations.
Tax Guides
NPPN Guide: How to Use Net Income Calculation Norm for Individual Taxpayers
A complete guide to Indonesia's Net Income Calculation Norm (NPPN) for individual taxpayers in independent professions and business activities. Covers eligibility, percentages, calculation method, Coretax filing procedure, and worked examples of tax due.
Tax Glossary
Dividend
A Dividend is a share of profits distributed to shareholders in proportion to their ownership. Under the Income Tax Law, dividends are taxable income unless specified conditions are met. Governed by Article 4 paragraph (1)(g) and Article 4 paragraph (3)(f) of the Income Tax Law, and Government Regulation No. 9/2021. Dividends received by individual residents from domestic companies are subject to 10% final tax. Dividends received by domestic corporate taxpayers from at least 25% ownership are excluded from taxable income. Foreign dividends are excluded if reinvested in Indonesia within the prescribed period.
Tax Guides
Tax Guide for Influencers and Social Media Creators in Indonesia
Indonesian influencers and content creators earning from brand endorsements, sponsored posts, and platform monetisation are taxed as independent professionals. Brand deals paid by Indonesian companies attract PPh 21 withholding; foreign platform income must be self-reported.
Tax Guides
PPh 21 DTP 2026 Guide: Eligible Sectors, Criteria, and How to Claim
The PPh 21 Borne by Government incentive runs through 2026 for employees in labor-intensive industries and tourism earning up to IDR 10 million per month. This guide covers eligible sectors, employee criteria, and employer reporting steps.
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 Glossary
Taxpayer
A Taxpayer (Wajib Pajak) is any individual or entity, including tax payers, withholding agents, and tax collectors, that holds tax rights and obligations under Indonesian tax law. Defined in Article 1 paragraph 2 of Law No. 28/2007 on General Tax Provisions and Procedures (UU KUP). Individual Taxpayers include any person with income above the non-taxable threshold (PTKP) from any source: employment, business, investments, or other sources. Citizenship is not a determining factor; both Indonesian residents and foreign nationals domiciled in Indonesia can be individual taxpayers. Corporate Taxpayers (Wajib Pajak Badan) include all legal entities established or domiciled in Indonesia, such as: Limited Liability Companies (PT), Partnerships (CV), Firms, Cooperatives, Foundations, and other legal entities. Corporations must pay income tax (PPh Badan) on net profits. Core taxpayer obligations: (1) Register and obtain NPWP, (2) Calculate tax liability, (3) Pay taxes on time, (4) File annual returns and supporting documents.
Tax Glossary
Annual Tax Return (SPT Tahunan)
The Annual Tax Return (SPT Tahunan) is the official form used by taxpayers to report all income, assets, liabilities, and tax calculations for a tax year to Indonesia's Directorate General of Taxes (DJP). Governed by Article 3 paragraph (1) of Law No. 28/2007 on General Tax Provisions and Procedures (UU KUP). Filing deadlines: March 31 for individual taxpayers and April 30 for corporate taxpayers (Article 3 para. 3, UU KUP). Filing is done through DJP Online using e-Filing or the official Coretax application. Late filing incurs penalties of Rp 100,000 for individuals and Rp 1,000,000 for entities (Article 7 para. 1, UU KUP). The return must be filed even if income is zero, below the non-taxable threshold, or resulting in a loss, provided the taxpayer is registered with DJP. Supporting documents include withholding certificates (Form 1721-A1), tax payment proof (monthly SPT), and income documentation.
Tax Guides
Tax Guide for Teachers and Lecturers in Indonesia
Teachers and lecturers are typically taxed as employees under PPh 21. Government teachers (PNS) are subject to Article 21 withholding by their institution, while private school and university lecturers follow TER-based withholding under PMK 168/2023.
Tax Updates
DJP Releases Coretax Update May 2026: New e-Bupot and Annual SPT Modules
The Directorate General of Taxes (DJP) released a Coretax update in May 2026, adding refinements to e-Bupot and the corporate Annual SPT module.
Tax Guides
Indonesia Tax Refund Guide: Eligibility, Procedure, and How to File
A complete guide to Indonesian tax refunds: legal basis (UU KUP, UU PPN, PMK 28/2026), advance vs regular refund mechanisms, eligibility for each taxpayer category, how to file via Coretax, plus worked examples and FAQ.
Tax Glossary
Permanent Establishment (PE / BUT)
A Permanent Establishment (PE / BUT) is the form of business used by non-resident individuals or foreign entities to conduct business activities in Indonesia. Governed by Article 2 paragraph (5) of the Income Tax Law. Examples include: representative offices, management offices, foreign company branches, workshops, warehouses, and dependent agents. A BUT is treated as a domestic corporate taxpayer, subject to PPh Badan on Indonesia-source income.
Tax Guides
Tax Guide for Photographers and Videographers in Indonesia
Photographers and videographers in Indonesia are taxed based on how they earn: as employees at a studio, as freelancers billing clients directly, or as business owners. Fees from Indonesian companies trigger PPh 21 expert withholding.
Tax Guides
Tax Guide for Lawyers and Advocates in Indonesia
Lawyers in Indonesia are classified as independent professionals (tenaga ahli) for PPh 21 purposes. Honorarium from clients is subject to 50% taxable base. Law firm partnerships and individual practices have different reporting obligations.
Tax Guides
Tax Guide for SME Owners and Entrepreneurs in Indonesia
Small and medium enterprises (UMKM) with gross turnover up to IDR 4.8 billion per year may use the final PPh rate of 0.5% of monthly gross revenue under PP 55/2022. Larger businesses switch to the normal progressive or corporate rate.
Tax Guides
Tax Guide for Architects in Indonesia
Architects in Indonesia are taxed as employees when working for a firm, or as independent professionals earning from design fees and project commissions. Licensed architects operating their own studio are subject to PPh 25/29 and may need to register as PKP.
Tax Updates
PMK 28/2026 Overhauls Accelerated Tax Refund Rules, Effective 1 May 2026
Indonesia's MoF issued PMK 28/2026, revoking PMK 39/2018 through PMK 119/2024. New rules on advance refund of tax overpayment took effect on 1 May 2026.
Tax Guides
Tax Guide for Consultants in Indonesia
Consultants in Indonesia are taxed as independent professionals under PPh 21 when paid by Indonesian entities. Self-employed consultants must also pay monthly PPh 25 instalments and file an annual PPh 29 return.