CORPORATE INCOME TAX RATES

Generally, a flat rate of 25% applies. Public companies that satisfy a minimum listing requirement of 40% and other conditions are entitled to a tax cut of 5% off the standard rate, giving them an effective tax rate of 20%. Small enterprises, i.e. corporate taxpayers with an annual turnover of not more than Rp50 billion, are entitled to a 50% discount of the standard tax rate which is imposed
proportionally on taxable income of the part of gross turnover up to Rp4.8 billion.


Tax residence
A company is treated as a resident of Indonesia for tax purposes by virtue of having its incorporation or its domicile is in Indonesia. A foreign company carrying out business activities through a permanent establishment (PE) in Indonesia will generally have to assume the same tax
obligations as a resident taxpayer.

Tax payments

Resident taxpayers and Indonesian PEs of foreign companies have to settle their tax liabilities either by direct payments, third party withholdings, or a combination of both. Foreign companies without a PE in Indonesia have to settle their tax liabilities for their Indonesian-sourced income through

withholding of the tax by the Indonesian party paying the income.

 


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