Annual Individual Income tax Report
The Indonesian personal taxation system is based on worldwide income. This includes:
- Any salary paid to you for your current position
- Dividend and interest income
- Rental income
- Capital gains from sale of property
Credit is given for income tax paid overseas, subjected to limits and perhaps dependent on double taxation treaties between Indonesia and your home country. You may also receive credit for tax taken on interest income for local bank accounts and time deposits and other interest earning methods that are taxed.
Your employer is responsible for the calculation of any taxes that need to be withheld from your salary, monthly payment of these taxes to the tax authorities, and provision of annual numbers to the employee.
Each employee is required to report their annual tax income every March of the next year. They are supposed to receive their monthly tax calculation from their employer, and at the end of the year or the latest by March of the next year, the company has to produce Form 1721-A1, which summarizes how much taxes the company has been paying for each employee. The employee needs to use Form 1721-A1 to be included in their personal annual income tax report.
Individual Tax Rates
The standard tax rates on taxable income received by resident taxpayers are as follows:
|Up to Rp 50,000,000||5%|
|Between Rp 50,000,000-250,000,000||15%|
|Between Rp Rp 250,000,000-500,000,000||25%|
|Over Rp 500,000,000||30 %|
An extra 20% is levied on people who do not have a tax number (NPWP) on top of progressive income tax rates above.
The following personal deductions are available for resident individual taxpayers in calculating their taxable income, depending on the taxpayer’s personal circumstances.
Amount per year
(additional Rp 54,000,000 for a wife whose income is combined with her husband’s)
|Dependents||Rp 4,500,000 each
(up to a maximum of 3 individuals related by blood or marriage)
|Occupational Support||5% of gross income up to a maximum of Rp 6,000,000|
|Contribution to approved pension fund, e.g. BPJS Ketenagakerjaan||Amount of self-contribution|
|Compulsory tithe (“zakat”) or religious contributions||Actual amount, provided that valid supporting evidence is available and certain requirements are met|
Assets and Liabilities Reporting
There is no wealth tax in Indonesia. Nevertheless, resident taxpayers are required to declare their assets and liabilities as of the end of fiscal year.
So far, the Tax Office has not set any specific monetary value threshold for the assets and liabilities that should be reported under the individual’s tax return. However, some examples were provided in the guide book for completion of annual tax return, such as:
- Cash and cash equivalents: cash on hand, savings, time deposits
- Real property: house, apartment, factory, warehouse.
- Investments: shares, bonds, mutual funds, warrants.
- Means of transportation: bicycle, motorcycle, car.
- Other movable property: precious metals and stones, art works, antiques, yacht, airplane, helicopter, special sports equipment.
- Liabilities: loans from banks, credit cards.
Beginning of the Indonesian tax year.
31st March of the following year
Normal filing deadline of annual individual income tax report; for example, Individual Income Tax Return for Fiscal Year 2014 should be filed by 31 March 2015. Any underpayment of tax must be settled before submission of the annual tax return, e.g. 30 March 2015 (subject to change as regulated by the tax authority).
End of the Indonesian Tax Year
We suggest you to consult a qualified professional adviser before making any decision or taking any action that may affect your finances or your business.
Useful forms to help prepare your tax information
- application form for tax registration formulir pendaftaran WP OP PER20_2013
- Annual Individual Income Tax Return 01_form_1770 S_2013_PTKP 2013
For further information, you can download the forms from the Directorate General of Taxes website http://pajak.go.id/