INDONESIA TAX COMPLIANCE FOR INDIVIDUAL EXPAT

Buddy,

When you are working overseas, say Indonesia, for longer period of time, as an illustration 12 months and up , what’s the first time  in store that  you are  often worry about?, based on the incoming queries,  I conclude that a majority of expats usually  are worry about the tax compliance.  Understand, dealing with taxes can be complicated enough. As it offers numerous tax implications in almost throughout economic activities.

On this occasion, I am revealing  about local statutory that you need to bear in mind.  I noted that there are permits, visa, tax and other working regulations to take into account  if you wish to work decently in Indonesia. I am focusing now upon Indonesia Tax compliance.

I came across  many misconception about paying tax in Indonesia. A few usually  are often equating along with  his own country regulations. Each country  has vastly  Tax system ,furthermore you should certain about the tax liable to pay in.

the List below are   one of the most regular questioned by expats in regards with tax compliance for individual expat. 

NO	DESCRIPTION	REMARKS
1	TAX YEAR END	31 December
2	TAX RESIDENT	Indonesian tax residents are needed to file yearly individual tax returns when their total income derived from sources throughout in and out of Indonesia surpass the lowest threshold, that is among IDR 24,300,000 for a single individual and IDR 32,400,000 for a married individual having three children/dependents effective per 1 January 2013. It could be either file jointly or separately for spouse to choose. The law needs couples having separate Tax Identification Number to estimate  the tax payable in accordance with  the combined family gross income, subsequently report the tax payable in each tax return based on the prorated income The duty  to withhold, remit, and report tax on cash compensation paid in connection with employment rests with the local employing entity. business employers shall  withheld the income tax  which is remitted on a monthly basis by the 10th of the following month and reported by the 20th of the following month The duty to be able  remit as well as report tax on income received from non-employment sources for a 12 months period(such as interest, dividend, rental income, and capital gain) rests with the individual An individual taxpayer is required to meet the  procedures below: Registration Payment of monthly installments Lodgment of an yearly individual income tax return Deregistration
3	REGISTRATION	An individual must register to obtain a tax identification number (NPWP) in order to file a tax return. Below are the documents that are required for registration of an expatriate: Passport copy Working permit (IMTA) Copy Limited stay permit (KITAS) Copy Registration form to be completed A letter of authority for tax specialist / representative to conduct the registration process
4	FILING	The deadline to file The yearly individual tax return is 31 March of the year following the end of the calendar year. However, if there is any amount due, before the tax return is lodged, the payment has to be made Late filing of tax returns will cause penalty amounting to 100.000 for individual monthly tax return Furthermore, an administrative penalty of 2 percent per month also applies for Late payment is calculated from the payment due date. If, sometime, Taxpayer is  unable to submit the yearly individual tax return on time, tax payer  may request an extension of time to file the return up to 31 May (Form 1770-Y). However, obtaining an extension of time to file does not provide an extension of time to pay and we are not quiten sure that the tax office will approve the request for an extension.
5	ATTACHMENT	The listed below are   documents  to be attached to the yearly income tax return (Form 1770/1770S): Tax payment slip showing  that the balance of income tax payable based on the tax calculation has already been paid Assets and liabilities List Employers certificate of income tax on earning ( form 1721-A1) copy Tax payers dependent List ( if the tax return is signed by proxy),please provide Letter of authority for tax consultant/ representative Supporting documents for foreign tax paid ( such as copies of home country tax returns, tax payment voucher, etc) Work permit copy
6	NON TAX RESIDENT	Solely a final rate of 20% applies for non tax resident which is taxed on income from Indonesia The duty to withhold, remit, and report tax on cash compensation paid in connection with employment rests with the local employing entity. business employers shall  withheld the income tax  which is remitted on a monthly basis by the 10th of the following month and reported by the 20th of the following month There is no obligation to register for an NPWP or file any individual income tax return for Non Tax resident
7	TAX RATE	RESIDENT RATE Taxable income bracket Total tax on income below bracket Tax rate on income in bracket From IDR To IDR IDR Percent 1 50,000,000 0 5 50,000,001 250,000,000 2,500,000 15 250,000,001 500,000,000 32,500,000 25 500,000,001 Over 95,000,000 30 NON RESIDENT RATE a flat rate of 20 percent solely applies for Non Tax Resident

In regards with what is the tax resident and non tax resident, it will further be explained on another page

Hope you find it useful

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