Maintaining 100% compliance with local regulations is essential no matter where you do business. In Indonesia, both individuals and corporations cannot avoid their tax obligations. Tax reporting and other related processes can be challenging and exhausting due to tax laws’ complexity and ever-changing nature.
InCorp Indonesia provides specialized services, including Tax Holiday and Tax Litigation Services, to help clients navigate these complexities seamlessly. Our services are designed to streamline the investment process and facilitate the operation of your business. We ensure smooth compliance with tax requirements and alleviate the burdensome tasks associated with tax reporting.
Tax Holiday
Foreign direct investments in Indonesia are determined to receive a tax holiday facility. As a fiscal facility, tax holidays in Indonesia reduce the income taxes of any business investments. The Ministry of Finance regulates the incentive for this income tax holiday through Regulation No.130/PMK.010/2020.
Tax Litigation
Tax litigation serves as an appealable order or claims against the tax court under applicable regulations regarding taxation between taxpayers and the official in charge. The case usually includes claims against tax collection conducted by forced warrant.
Types of Taxes in Indonesia
The Indonesian government collects personal income tax from residents on salaries, interests, dividends, and pensions. Employers calculate and pay these taxes monthly. Tax residents without an Indonesian Taxpayer ID (NPWP) may face higher tax rates.
Indonesia’s corporate income tax is charged to any business entity earning income there. Despite most companies being charged with a flat rate, some specific business lines have their corporate income tax rates.
Most goods and services in Indonesia are subject to Value-Added Tax (VAT) or Pajak Pertambahan Nilai (PPN). VAT is applied at each production stage, and PKP companies must report monthly VAT and business activities.
Import tax in Indonesia applies to imported goods, with exemptions based on product, region, or origin. Importers must follow regulations, consult customs, and avoid non-compliance penalties, delays, or confiscation.
Tax Reporting in Indonesia: Workflow & Timeline
