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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 Guides
Article 29 Income Tax (PPh 29) Guide: How to Calculate, Pay, and File Underpaid Annual Tax
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 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 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 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
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 PPh Article 22 Guide: Types, Rates, Collectors, and Filing
Complete guide to Indonesia's PPh Article 22 income tax: legal basis, transaction types collected at source, designated collectors, tariffs, and how to file via Coretax DJP.
Tax Guides
Non-Deductible Expenses in Indonesia: A Practical Guide
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
Guide to SKPKB (Underpayment Tax Assessment) in Indonesia: Article 13 KUP, Penalties, and How to Respond
A complete guide to the Underpayment Tax Assessment (SKPKB) in Indonesia: definition, legal basis under Article 13 of the KUP Law and MoF Reg. 80/2023, issuance conditions, types of penalties (interest capped at 24 months and 75% surcharge), worked examples, and the steps to respond, including objection and appeal rights.
Tax Updates
PP 20/2026 Confirms Bribes and Gratuities Are Not Deductible
Through Article 20A of Government Regulation No. 20 of 2026, Indonesia explicitly bars bribe and gratuity expenses from being deducted from gross income, covering payments both domestically and abroad.
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 Guides
Advance Tax Refund Guide under PMK 28/2026: Eligibility, Mechanism, and How to File via Coretax
PMK 28/2026 restructures advance refund procedures into three tracks: Qualified Taxpayer (KUP Law Art. 17C), Specific Requirements Taxpayer (KUP Law Art. 17D), and Low Risk PKP (VAT Law Art. 9(4c)). All applications go through Coretax and are processed via a review mechanism.
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 Updates
Indonesia's 2025 Annual Tax Returns Reach 13.32 Million Filings, Relaxation Window Ends 31 May 2026
Indonesia's DGT logged 13.32 million 2025 annual income tax returns by 20 May 2026. Corporate taxpayers have until 31 May to file under KEP-71/PJ/2026 with no late penalty.
Tax Guides
Complete List of Income Excluded from Indonesia's 0.5% Final PPh After GR 20/2026
Not every income earned by an MSME taxpayer qualifies for the 0.5% final PPh rate. GR 20/2026 clarifies which income is excluded, from independent professions and offshore earnings to income already subject to other final taxes. This guide lists every exclusion and explains how to separate income on your annual return.
Tax Updates
Indonesia's GR 20/2026 Closes Firm Splitting Loophole in 0.5% Final PPh for MSMEs
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
Global Minimum Tax (GloBE) Guide for Indonesia: Scope, Mechanisms, and Filing
The Global Minimum Tax or GloBE ensures multinational groups pay at least 15 percent effective tax in every jurisdiction. Indonesia adopts it via MoF Reg 136/2024 and PER-6/PJ/2026.
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 Collection Letter (STP): Why It Is Issued, Penalties, and How to Respond
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.
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
Guide to Indonesia's 0.5% Final PPh for MSMEs after GR 20/2026: Subjects, Threshold, and Calculation
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 Updates
Indonesia's New Crypto Miner Tax Regime Effective 2026: General PPh Rates and 2.2% VAT on Verification Services
Starting tax year 2026, income earned by crypto asset miners in Indonesia is no longer subject to a 0.1% final PPh Article 22. It is now taxed at general PPh rates under Article 17 of the PPh Law. The VAT rate on verification services classified as Taxable Services rises from 1.1% to 2.2%.
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.