Search
Search
Search across guides, tax updates, and glossary.
Results for · 30
Tax Glossary
Article 21 Income Tax (PPh 21)
PPh Article 21 is the income tax on wages, salaries, honoraria, allowances, and other payments received by individual residents in connection with work, employment, services, or activities (Article 21 para. 1, Income Tax Law). Governed by Article 21 of Law No. 36/2008 on Income Tax (UU PPh) and Ministry of Finance Regulation No. 168/PMK.03/2023. Effective January 1, 2024, withholding uses the Effective Average Rate (TER) method, which is simpler than the previous progressive rate method. The withholding agent (usually the employer, treasurer, or payment maker) is obligated to: (1) Calculate and withhold PPh 21 from each income payment, (2) Remit to the state treasury by the 10th of the following month (Article 21 para. 11, UU PPh), (3) File the monthly tax return by the 20th of the following month (Article 21 para. 12, UU PPh), (4) Issue Form 1721-A1 (withholding certificate) by end of January of the following year. The TER rate depends on the taxpayer's PTKP status (TK, K, K/I) and income level, ranging from 0% to 30% progressively per category.
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
PPh 21 Guide 2026: Calculation, TER Rates, and Worked Examples
A practical guide to calculating Indonesian income tax (PPh Article 21) for permanent employees in 2026 using the Average Effective Rate (TER) under PP 58/2023.
Tax Guides
Tax Guide for Private Sector Employees in Indonesia
Private sector employees in Indonesia are subject to PPh 21 (income tax) withheld monthly by their employer using the Effective Average Rate (TER) system, effective January 2024 under PMK 168/2023. At year-end, employers issue a 1721-A1 withholding certificate used to file the annual personal income tax return.
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.
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 Guides
Tax Guide for Civil Servants (PNS/ASN) in Indonesia
Indonesian civil servants (PNS/ASN) have their PPh 21 calculated and withheld by their government work unit (satker) using the TER method under PMK 168/2023. Salary, allowances, and year-end bonus (THR) are all subject to withholding.
Tax Guides
Tax Guide for Notaries and PPAT in Indonesia
Notaries (Notaris) and land deed officials (PPAT) in Indonesia earn fees (honorarium) subject to PPh 21 as expert professionals. PPAT also collect and remit BPHTB and PPh Pasal 25/29 on property transaction taxes on behalf of parties.
Tax Guides
Tax Guide for Accountants in Indonesia
Accountants in Indonesia are taxed as employees when working for a firm or as independent professionals when operating a private practice. Public accountants (CPA) offering attest services must register with IAPI and comply with additional reporting obligations.
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
Tax Guide for Doctors in Indonesia
Doctors in Indonesia face different tax obligations depending on whether they practice at a hospital as an employee, run an independent clinic, or do both. PPh 21 applies to hospital salaries; independent income is subject to PPh 25/29.
Tax Guides
Tax Guide for Nurses and Midwives in Indonesia
Nurses and midwives employed by hospitals or clinics are subject to PPh 21 employee withholding. Those running independent practices (praktik mandiri) are taxed as independent professionals or as UMKM business owners depending on their revenue.
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
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 Glossary
Monthly Tax Return (SPT Masa)
The Monthly Tax Return (SPT Masa) is the form used by taxpayers to report and/or pay tax due in a one-month tax period. Governed by Article 3 paragraph (1) of UU KUP. Unlike the Annual Return (SPT Tahunan), the SPT Masa is filed monthly. Common types: SPT Masa PPh 21 (due by 20th), PPh 23 (20th), PPh 25 (20th), and SPT Masa PPN (end of following month). Late filing penalties: Rp 100,000 per income tax monthly return; Rp 500,000 per VAT monthly return.
Tax Glossary
Tax Withholding Certificate
A Tax Withholding Certificate is an official document issued by the withholding agent (employer, treasurer, or other payment maker) as proof that tax has been deducted from the taxpayer's income. Governed by Article 23 paragraph (1) of Law No. 28/2007 on General Tax Provisions and Procedures (UU KUP) and Ministry of Finance Regulation No. 168/PMK.03/2023 for PPh 21. For permanent employees, the PPh 21 withholding certificate is Form 1721-A1. For civil servants, military personnel, and police, Form 1721-A2 is used. The certificate must be issued and delivered to the income recipient within one month after the tax year ends, typically by end of January. This document serves three critical purposes: (1) Proof that tax withholding occurred, (2) Tax credit when filing the annual return, (3) Supporting documentation for claiming refunds (restitusi) if there is excess tax paid.
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 Glossary
TER (Effective Average Rate)
TER (Tarif Efektif Rata-rata / Effective Average Rate) is the method for calculating PPh Article 21 withholding effective January 1, 2024 under Ministry of Finance Regulation No. 168/PMK.03/2023. TER replaces the more complex monthly progressive rate method with a simpler, more transparent calculation. There are two types of TER: (1) Monthly TER, used for January through November of each year, (2) Annual TER (using Article 17 para. 1 rate), used for December as the final tax settlement for the year. TER is divided into three categories based on the taxpayer's PTKP (non-taxable income) status: Category A: Single with TK/0, TK/1, or Married K/0 (basic/entry status), Category B: TK/2, TK/3, Married K/1, or K/2 (intermediate status), Category C: Married K/3 (highest status). The complete TER table with detailed rates for each income range is in the Annex to PMK 168/2023. Each month, withholding agents use this table to calculate PPh 21 based on salary level and employee PTKP status.
Tax Glossary
Tax Credit
A Tax Credit is tax previously paid or withheld/collected that can be offset (credited) against total tax liability at year-end. Governed by Article 28 of Law No. 36/2008 on Income Tax (UU PPh). Tax credits available to individual taxpayers include: 1. PPh 21: Withheld by employer from salary (Form 1721-A1), 2. PPh 22: Tax on purchases of certain goods or imports, 3. PPh 23: Tax on services received or interest income, 4. PPh 25: Monthly income tax installments paid by the taxpayer, 5. PPh 26: Tax (PPh 24) on foreign-source income. If total tax credits exceed the year's tax liability, the excess may be: (1) Refunded (restitusi) to the taxpayer's bank account, (2) Carried forward (compensated) to the next tax year, (3) Applied to other tax debts (Article 17C, UU KUP).
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 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 Content Creators and YouTubers in Indonesia
Content creators and YouTubers in Indonesia earn from multiple streams - AdSense, sponsorships, brand deals, affiliate commissions, and digital product sales. Each income stream has a different tax mechanism depending on whether the payer is an Indonesian company, a foreign platform, or an individual.
Tax Guides
Indonesian Individual NPWP Guide: Requirements, Online Registration, and NIK as NPWP
How to register an individual Tax ID (NPWP) via DJP Online, document requirements, and the NIK-as-NPWP integration under PMK 136/2023.
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
NPWP (Tax Identification Number)
NPWP (Nomor Pokok Wajib Pajak), or Tax Identification Number in English, is a unique 16-digit identifier issued by Indonesia's Directorate General of Taxes (DJP) to every taxpayer for tax administration purposes. Governed by Article 2 of Law No. 28/2007 on General Tax Provisions and Procedures (UU KUP). Since January 1, 2024, per Ministry of Finance Regulation No. 112/PMK.03/2022, NPWP integrates the National Identification Number (NIK) for individual resident taxpayers. Without an active NPWP, taxpayers face income tax withholding at 120% of the normal rate (Article 21 paragraph 5a of Law No. 36/2008 on Income Tax). NPWP is mandatory for: (1) Individuals with income above the non-taxable threshold (PTKP), (2) Entrepreneurs conducting business in Indonesia, (3) Recipients of various income sources. An NPWP is required to file tax returns, claim refunds, transact with government agencies, and open bank accounts.
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
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
Tax Borne by Government (DTP)
Tax Borne by Government, abbreviated DTP from the Indonesian "Ditanggung Pemerintah", is a tax facility under which the tax that would normally be owed is paid by the government through the tax subsidy line of the state budget rather than by the relevant taxpayer. The scheme applies to several taxes, notably Income Tax (PPh) and Value Added Tax (PPN), and is generally limited to a defined period and specific sectors. The government uses DTP as a short-term fiscal stimulus to support household purchasing power, accelerate recovery in specific industries, or back strategic sectors. Taxpayers continue to report transactions as usual, but the tax amount is recorded as borne by the government. The legal basis for each DTP facility is set by a separate Minister of Finance Regulation that defines the criteria, validity period, and reporting procedures.
Tax Guides
Tax Guide for Forex and Crypto Traders in Indonesia
Crypto asset transactions in Indonesia are subject to a 0.1% final PPh on each sale and 0.11% VAT when traded via registered exchanges (BAPPEBTI) under PMK 68/2022. Forex trading income is taxed as ordinary income.