Registering for Tax and Tax Returns

Information on registering for tax and filing your annual tax return in Indonesia...

A resident earning income exceeding the non-taxable income threshold of Rp. 15,840,000 must register at their local Directorate General of Taxes (DGT) office and file an annual tax return (Form 1770).

  • For information on registering for tax: Click here

Individuals are responsible for ensuring that their tax contributions are correctly paid. All individuals registering with the DGT are given a tax identity number (Nomor Pokok Wajib Pajak - NPWP). A family is usually regarded as a single unit for tax purposes and is given one number in the name of the family head. People should register with the tax service office in their city. To register the following items are needed:

  • A completed registration form
  • A photocopy of the employer's tax identity number (NPWP)
  • A photocopy of the applicant's passport (all pages)
  • A photocopy of the applicant's work permit

Form 1770 is needed to complete an income tax return. The form must be completed in Indonesian and returned to the tax office the individual registered at. Annual tax returns should be filled in within three months of the end of the tax year, which is the calendar year. All of an individual's income and that of their family, both within Indonesia and overseas, should be listed on their tax return including:

  • Investment income
  • Compensation from employment
  • Overseas income
  • Capital gains
  • Any other income
  • A summary of assets and liabilities

Personal tax forms can be downloaded from the English version of the DGT website.

A large portion of personal income tax is collected through withholding by a third party, such as an employer. For example, each month income tax contributions are deducted when salaries are paid. Tax is also withheld by the payers prior to distributing pension payments to government approved schemes, severance payments, fees for services and prizes or awards. As individuals are responsible for ensuring that they comply with tax laws and make all the necessary contributions, it is advisable to check that an employer is making the correct deductions.

Article 23 income tax

Resident taxpayers are subject to what is called Article 23 income tax on the following incomes at a rate of 15 percent on the gross amount:

  • Interest (both within Indonesia and elsewhere)
  • Dividends (both within Indonesia and elsewhere)
  • Royalties
  • Prizes and awards

Fees for a number of services including rental of assets other than land or buildings and consulting services are subject to Article 23 income tax at a rate of two percent.

Disclaimer

Tax law is complex and every effort has been made to offer information that is current, correct and clearly expressed. The information in this summary is intended to be no more than a general overview of the position and certain details have been deliberately omitted. The contents of this page should not be taken as an authoritative statement of Indonesian tax law and practice. Neither the author nor the publisher is responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.