6 PT PMA corporate taxes in Indonesia you should understand
Generally, the law treats PT PMA similarly to a domestic company with the same Indonesian company tax rates. Foreigners who run a PT PMA for property rental purposes should be aware of the following six important corporate taxes in Indonesia:
- Corporate Income Tax (CIT)
- Employee Withholding Tax (WHT)
- Personal Income Tax (PIT)
- Land and Buildings Tax (PBB)
- Value Added Tax (VAT)
- Documentary Stamp Tax
As a business owner, it is essential to clearly understand tax obligations that come with operating a PT PMA in Indonesia, such as property taxes.
1. Corporate Income Tax (CIT)
The Corporate Income Tax in Indonesia is a tax on the business profits a PT PMA earns and one of the most essential corporate taxes in Indonesia. Companies must report annual tax returns. The Corporate Income Tax is set at a fixed rate of 22%, based on the net taxable income in the fiscal year.
A global corporate tax agreement may reduce foreign corporate tax rates for those involving international sales to encourage globalization. These are subject to the regulations provided in the negative investment list. In addition, companies that invest between IDR 1 billion ($63,000) and IDR 500 billion ($31.5 million) in the first five years of establishment enjoy a CIT reduction of up to 50%.
The capital gains from the sale of real estate are counted as part of its taxable income and are taxed at the Corporate Income Tax (CIT). The CIT should be filed by April 30th of the following year, while the payment should be performed by the 10th of the next month.
| Type | Tax rate |
|---|---|
| Corporate income | 22% |
2. Employee Withholding Tax (WHT)
The Employee Withholding Tax in Indonesia refers to a portion of their salary deducted by the PT PMA and remitted directly to the government to pay their income tax. The amount of WHT varies on the employee’s wages, and the rates are progressive. The WHT should be filed by the 20th of the following month and paid by the 10th of the following month.
These rates apply to those with a Tax Identification Number (NPWP). The tax rate for non-residents is a flat rate of 20%. Foreigners with a temporary stay permit, such as KITAS, and those who temporarily receive income in Indonesia, such as musical artists, do not need to obtain an NPWP in Indonesia.
| Income | Tax rate |
|---|---|
| Up to IDR 60 million ($3,780) | 5% |
| IDR 60 million ($3,780) – IDR 250 million ($15,750) | 15% |
| IDR 250 million ($15,750) – IDR 500 million ($31,500) | 25% |
| IDR 500 million ($31,500) – IDR 5 billion ($315,000) | 30% |
| Over IDR 5 billion ($315,000) | 35% |
3. Personal Income Tax (PIT)
In connection with the Employee Withholding Tax is the Personal Income Tax, called Pajak Penghasilan Orang Pribadi. The PIT should be filed by March 31st of the following year, while the payment deadline is on the 10th of the following month.
It’s important to note that the income tax rate for a foreign company in Indonesia differs from the income tax liabilities of its employees and shareholders. The shareholders are liable for Indonesia’s dividend tax, which is part of their income.
| Income | Tax rate |
|---|---|
| Up to IDR 60 million ($3,780) | 5% |
| IDR 60 million ($3,780) – IDR 250 million ($15,750) | 15% |
| IDR 250 million ($15,750) – IDR 500 million ($31,500) | 25% |
| IDR 500 million ($31,500) – IDR 5 billion ($315,000) | 30% |
| Over IDR 5 billion ($315,000) | 35% |
4. Land and Buildings Tax (PBB)
Indonesia has a Land and Building Tax (PBB), known as Pajak Bumi dan Bangunan (PBB) in Indonesian, which is paid to the Directorate General of Taxes (Direktorat Jenderal Pajak, Kementerian Keuangan Republik Indonesia). The owner of the land or building has to pay the PBB tax, which could be a PT PMA. Before, the PBB rate was 0.01%–0.3%. In 2022, Indonesia raised the PBB to 0.5%. NJOP and NJKP are needed to calculate the PBB tax. NJOP (Nilai Jual Objek Pajak) is the average real estate transaction price, while the NJKP (Nilai Jual Kena Pajak) is the NJOP-based appraisal value.
You can calculate the NJKP with the following formula:
- NJKP = 40% or 20% x (NJOP–NJOPTKP).
- 40% for properties above IDR 1 billion ($63,000)
- 20% for properties under IDR 1 billion ($63,000)
- NJOPTKP is IDR 12 million ($756)
The following formula calculates the PBB tax from the NJKP:
- PBB = 0.5% x NJKP
Take a property with an NJOP value of IDR 5.8 billion ($365,400):
- NJKP = 40% x (5,800,000,000 – 12,000,000) = IDR 2.32 billion ($145,858)
- PBB = 0.5% x 2,315,200,000 = IDR 11.58 million ($729)
The property owner’s annual PBB tax is IDR 11.58 million ($729).
The Indonesian tax authorities send taxpayers a tax-due notice letter (Surat Pemberitahuan Pajak Terutang/SPPT) with the tax amount to be paid. The PBB tax must be paid within six months after the SPPT issue.
PBB calculator
Our tool calculates your property’s PBB tax:
5. Value Added Tax (VAT)
The Value Added Tax (VAT) is a consumption tax applied to the sale of goods and services, both tangible and intangible. It is one of the essential corporate taxes in Indonesia. It is included in the cost of products and services and is evident in everyday transactions. The regular VAT rate is 11% and should be filed and paid before the end of the following month.
6. Documentary Stamp Tax (DST)
The Documentary Stamp Tax is also one of the essential corporate taxes in Indonesia. It is applied to papers, documents, or deals that show that a document is legalized. Most government offices will only approve a document if it has a DST. The tax rate is IDR 10,000 ($0.63) and paid when legalizing the paper.
When to pay PT PMA corporate taxes in Indonesia?
The table below shows an overview of the filing and payment dates for corporate taxes in Indonesia.
| Type of tax | Deadline for filing | Deadline for payment |
|---|---|---|
| Corporate Income Tax (CIT) | The CIT should be filed by April 30th of the following year | The WHT should be paid by the 10th day of the following month |
| Withholding Tax (WHT) | The VAT should be paid before the end of the following month | The PIT should be paid by the 10th day of the next month |
| Personal Income Tax (PIT) | The WHT should be filed by the 20th of the following month | The PIT should be paid by the 10th day of the following month |
| Land and Buildings Tax (PBB) | The Indonesian tax authorities send taxpayers a tax-due notice letter (SPPT) with the tax amount to be paid. | The PBB tax must be paid within six months after the SPPT issue. |
| Value Added Tax (VAT) | The VAT should be filed before the end of the following month | The VAT should be paid before then end of the following month |
| Documentary Stamp Tax (DST) | N/A | The DST is paid at the moment of legalizing the document |
Be careful to file and pay your corporate taxes in Indonesia on time to avoid fines and future legal issues.
Do you want to know more about property taxes in Indonesia?
This article is part of our series on Indonesian property taxes, explicitly discussing corporate taxes in Indonesia. Read more about property taxes in Indonesia:
- Complete tax guide
- Taxes on buying real estate in Indonesia
- Taxes on property rental income in Indonesia
- Taxes on selling property in Indonesia
Need help with PT PMA taxes in Indonesia?
Are you unsure about corporation taxes in Indonesia? Leave your name and email below, and our experienced team will assist you with understanding, filing, and reporting your taxes accurately. You can also directly email us at [email protected]. We provide comprehensive support to ensure you comply with all tax regulations and avoid any pitfalls. Whether you need help with legalities or tax documentation, we’ve got you covered. Start your hassle-free business journey in Indonesia today with our personalized assistance!
Frequently Asked Questions (FAQs)
What is the corporate tax rate for Indonesia?
The Corporate Income Tax (CIT) is one of the corporate taxes in Indonesia and has a flat rate of 25% based on the net taxable income of the business.
Can a foreigner own a PT in Indonesia?
No, a PT is a limited liability company owned by Indonesian nationals or legal entities. A foreigner can establish a PT PMA or a foreign-owned company. Ensure to understand the corporate taxes in Indonesia before establishing a company there.
What are the reporting requirements for PT PMA?
Regarding corporate taxes in Indonesia, the reporting requirement for a PT PMA includes annual financial statements, tax reports, investment reports, and employment reports.
