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Tax Glossary
PKP Registration
PKP Registration (Pengukuhan PKP) is the formal process by which the KPP registers an entrepreneur as a VAT-registered taxpayer, either upon application or ex officio. Governed by Article 2 paragraph (2) of the VAT Law and PER-02/PJ/2018. Entrepreneurs whose turnover exceeds Rp 4.8 billion in a fiscal year must apply for PKP status by the end of the following month. Upon registration, the entrepreneur receives a PKP Certificate and must issue e-Faktur from the following month. Late registration may result in sanctions.
Tax Glossary
PKP (VAT-Registered Entrepreneur)
A PKP is a VAT-registered entrepreneur required to collect, remit, and report VAT. Governed by Article 1 paragraph 15 of the VAT Law. Registration is mandatory when annual turnover exceeds Rp 4.8 billion (PMK No. 197/PMK.03/2013); voluntary registration is available below this threshold. Once registered, a PKP must issue a Tax Invoice for every BKP/JKP supply, remit VAT by end of the following month, and file the monthly VAT return by the same deadline.
Tax Guides
Indonesian VAT 12% Guide 2026: Scope, Rate, and Tax Invoices
A complete explanation of the 12% Indonesian VAT in force in 2026: taxable scope, input-output crediting mechanism, and e-Faktur obligations for taxable enterprises (PKP).
Tax Glossary
Tax Invoice (Faktur Pajak)
A Tax Invoice (Faktur Pajak) is proof of VAT collection issued by a PKP when supplying taxable goods (BKP) or services (JKP). Governed by Article 13 of the VAT Law and PER-03/PJ/2022. The invoice must be issued at the point of supply, or by the end of the delivery month if payment is received before supply. A late or non-compliant invoice is invalid and cannot be credited as Input Tax. Since 2014, Tax Invoices must be issued electronically via the DJP's e-Faktur application.
Tax Glossary
Monthly VAT Return (SPT Masa PPN)
The Monthly VAT Return (SPT Masa PPN) is the monthly report that every PKP must submit to DJP, summarizing Output Tax, creditable Input Tax, and the net VAT payable or overpaid. Governed by Article 15A of the VAT Law and PER-29/PJ/2015. The filing deadline is the end of the following month after the tax period. Since April 2022, filing is done through the e-Faktur application, which auto-generates return data from uploaded invoices.
Tax Glossary
VAT (Value Added Tax / PPN)
VAT (Pajak Pertambahan Nilai / PPN) is a tax levied on every supply of taxable goods (BKP) and/or taxable services (JKP) within Indonesia's customs area. Governed by Law No. 8/1983 on VAT, last amended by Law No. 7/2021 (UU HPP). The standard VAT rate is 11% since 1 April 2022, rising to 12% from 1 January 2025. PPN is an indirect tax: the economic burden falls on the final consumer, while the registered taxpayer (PKP) acts as a collector, remitting the difference between Output Tax (PK) and Input Tax (PM) to the state.
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
Input Tax (Pajak Masukan)
Input Tax (Pajak Masukan) is the VAT that should have been paid by a PKP on purchases of taxable goods (BKP) and/or services (JKP), utilization of offshore JKP, or importation of BKP. Governed by Article 1 paragraph 24 of the VAT Law. Input Tax is credited against Output Tax in the same tax period. If Input Tax exceeds Output Tax, the excess can be carried forward or refunded. Non-creditable Input Tax includes: defective Tax Invoices and BKP/JKP purchases unrelated to the business.
Tax Glossary
Output Tax (Pajak Keluaran)
Output Tax (Pajak Keluaran) is the VAT that a PKP must collect when supplying taxable goods (BKP), taxable services (JKP), or exporting. Governed by Article 1 paragraph 25 of the VAT Law. Output Tax = DPP x applicable VAT rate. Collection must be evidenced by a Tax Invoice. The difference between Output Tax and Input Tax is either the amount to remit (if PK > PM) or the overpayment to claim back (if PM > PK).
Tax Glossary
Gross Income
Gross Income (Penghasilan Bruto) is the total income received or earned by a taxpayer in a tax year before any deductions for expenses, PTKP, or other allowances. Governed by Article 4 of the Income Tax Law (UU No. 36/2008). For individuals, gross income includes salaries, allowances, bonuses, honoraria, interest, dividends, royalties, capital gains, and other income. Gross income is the starting point for computing Taxable Income (PKP) after subtracting allowable deductions and PTKP.
Tax Glossary
Tax Refund (Restitusi)
A Tax Refund (Restitusi) is the return of overpaid tax to a taxpayer who has paid, or had withheld/collected, more than the actual tax due. Governed by Articles 17 and 17B of UU KUP and Article 9 paragraph (4) of the VAT Law. The process: apply in the return, DJP audits, and issues an SKPLB if the overpayment is confirmed. Processing times: 12 months for corporate PPh; 12 months for general VAT; 8 months for low-risk PKP (accelerated refund). DJP pays 2% monthly interest on late refunds.
Tax Glossary
Tax Collection Letter (STP)
An STP (Tax Collection Letter) is used to collect tax and/or administrative penalties in the form of interest and/or fines. Governed by Article 14 of UU KUP. DJP issues an STP when: current-year income tax is unpaid or underpaid; a return has arithmetic or writing errors leading to underpayment; a taxpayer is subject to penalty interest or fines; a PKP fails to issue or issues a late Tax Invoice. STP has the same legal force as an SKP. Payment is due within 1 month of the STP issuance date.
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 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 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 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 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 Glossary
Advance Refund of Tax Overpayment (Pengembalian Pendahuluan)
An advance refund of tax overpayment is the disbursement of overpaid tax to the taxpayer through formal review (penelitian) rather than full audit (pemeriksaan). This mechanism provides a fast track for taxpayers meeting specific criteria or requirements as set out in Articles 17C and 17D of the General Tax Provisions Law (UU KUP), and Article 9(4c) of the VAT Law (UU PPN). The technical procedure is governed by PMK 28 of 2026, effective 1 May 2026, which revokes a chain of earlier regulations from PMK 39/2018 through PMK 119/2024. After disbursement, the Directorate General of Taxes retains the right to conduct an audit for substantive verification. If a shortfall is found, an Assessment of Underpayment (SKPKB) and penalties will be issued.
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
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 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
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
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 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
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 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 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.
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 Glossary
e-Faktur (Electronic Tax Invoice)
e-Faktur is an electronic Tax Invoice created through the DJP's e-Faktur application. Governed by PER-03/PJ/2022. e-Faktur rollout began in 2014 and is now mandatory for all PKPs in Indonesia. Each e-Faktur contains a QR code and unique reference number for easy verification. Failure to issue a compliant e-Faktur can result in a penalty of 2% of the Tax Base (DPP) under Article 14 paragraph (4) of UU KUP. Submission to the DJP is automated within the e-Faktur system.