FREQUENTLY ASKED QUESTIONS
1. Do I have to file an individual income tax return?
If
you a resident of Indonesia and you earn income that is more than the
non-taxable income threshold (PTKP), you have to register and file an
individual income tax return.
2. Who is a resident?
A
resident of Indonesia is one who meets the following conditions:
a) An Indonesia citizen
b) Present in Indonesia for more than 183 days within any 12
month
period: or
c) Present in Indonesia during a tax year with an intention to
stay in Indonesia.
3. If I spend less than 183 days in Indonesia, am I still
obligated to register?
No,
unless you have already established your residency your residency in
Indonesia through you intention. Intent is demonstrated among others
things by the length of your assignment, appointment letter etc.
4. Is this a new law?
No,
the requirement to register and file has been in existence since 1984.
5. How and when do I register?
You
need to submit the completed and signed registration form together
with the following attachments:
a. Copy of passport
b. Copy of KITAS (Limited Stay Permit Card)
c. Copy of employer’s tax ID number (NPWP) –for employees only
d. Copy of IKTA (Work Permit) –for employees only
e. Copy of business permit (for a taxpayer who is conducting a
business/independent profession)
f. Power of Attorney, if needed
You
should register within one month after you earn income above the non
taxable threshold amount. If you are a self employed, you
should register within one month after the start of your business
activity.
6. Where do I register?
You
should register at the local tax office situated in the area where you
live or are domiciled. If you
live in Jakarta. You should register at the Badora tax office.
7. If I live in DKI Jakarta and work in Tangerang, should I
register at Badora or Tangerang?
You
should register at Badora.
8.
If I live in DKI Jakarta and travel to Surabaya each week to
work and return home to Jakarta on weekends, where do I need to
register
You
should register at Badora.
9. If the address on my KTP is different from where I live, should
I register at the tax office based on the address on my KTP or my
actual residential address.
You
should register at the tax office based on your actual residential
address.
10.
What documents do I need to register?
See
answer to question 5 above
11.
I have been here since June 15, 2000 and did not register in
2000. In 2001, I will stay in Indonesia for less than 183 days (or my
work permit is valid for less than 183 days). Should I still register
for a tax ID number?
Yes,
because you have met the time test; You have lived in Indonesia for
more than 183 days within a 12 month period.
12.
What income do I include in my return?
You
should include your income from all sources (i.e. employment and
non-employment) earned outside and in Indonesia.
13.
What deductions can I claim?
You
can claim following items as deduction:
a.
Occupational expense (for employees only)
b.
Pension Contribution to approved pension funds
c.
Non-taxable income threshold (PTKP)
d.
Opening expense (for self employed individuals)
14.
Will be subject to double taxation, in both Indonesia and in my
home country?
You
can claim foreign tax you pay as a credit on your Indonesia tax return
provided it does not exceed the Indonesia tax payable on income that
taxed twice.
15.
What are the consequences of not registering or filing?
The
tax office has the authority to issue an NPWP officially. Further, if
this action was conducted intentionally and caused losses to the
state, you may be charged with criminal sanctions.
16.
My wife and I are both working as employees and we are planning
to file separately. The guide book indicated that to determine our tax
liability, we need to combine our income, calculate tax on the
combined income and then allocate the tax based on our separate income
over total income. This means that we are losing the benefit of the
lower tax rates since our tax is calculated based on combined income.
Please confirm if this is the correct way of calculating the tax.
Yes.
17.
My home country’s tax year runs from July 1 through June 30
of the following year. If I wish to claim credit for my home country
tax paid, it means that my Indonesia tax return will always be filed
after the due date of March 31, or even later until after the final
extended due date of September 30 (if approved). What are the
consequences of filing late? Is there any relief for late filing due
to delays my control, as in the situation mentioned above?
Filing
an annual tax return after approved extended due date will result in
the following:
a.
late filing penalty of Rp. 100.000,-
b.
interest of 2% per month for any underpayment of tax.
c.
The possibility of tax audit
18.
I own a house in my country
which I am renting out. How will rental income be taxed in
Indonesia? Can I deduct interest expenses incurred in connection with
renting out the property? For example, ca I deduct interest on the
mortgage for the house, property taxes, property and fire insurance,
agency fees, maintenance, and repair expenses?
Your
rental income will be taxed based on tax rates set forth under Article
17 of Law No. 17/2000. You can generally deduct expenses incurred in
connected with renting out the property as long as you can prove that
the expenses are directly connected to the income received. For that
purpose, you need to attach supporting documents.
19.
Do I need to attach a statement of assets and liabilities to my
tax return?
The
statement of assets and liabilities should be attached to your 2001
and future year tax returns.
20.
My wife is an Indonesia and I am not an Indonesia citizen. We
plan to return to my home country after my assignment in Indonesia. If
my wife decides to work when she is in my home country, does she have
to file an Indonesia income tax return?
As
she is Indonesia citizen and therefore a resident for tax purposes,
she needs to register and file an Indonesia tax return. She can claim
foreign tax paid on her Indonesia tax return.
21.
I am an employee and I have just registered and received a tax
ID number (NPWP) this month. How should I calculate my monthly tax
liability on my personal income for
this month?
Your
tax liability this month should be calculated based on your estimated
personal income for the year multiplied by 10 % and then divided by 12
(twelve).
22.
My assignment ands next month. What should I do to deregister?
Submit
the following to the tax office one month before your date of
departure:
a. The completed and signed deregistration form
b. Statement from your employer stating that your contract
in Indonesia has ended (if you are an employee)
c. Letter of cancellation of business permit (if you are
conducting a business/independent profession)
The
EPO may be submitted later.
23.
How long will deregistration take?
Within
12 months from the date complete documents are submitted to the tax
office. The tax office will endeavour to finalize the deregistration
process as soon as possible.
24.
Do I need to present any document or tax clearance letter to
the immigration counter when I leave Indonesia or
when my goods are shipped to my home country?
At
this moment it is not necessary.
25.
If I underpay my monthly taxes will I be charged interest?
Yes,
interest will be charged at 2 % per month on amount underpaid/unpaid.
26.
I earned income from one employer and this income has been
subjected to article 21 tax. I also have investment income overseas.
Am I still required to file monthly
taxes?
No,
as long as the overseas income is passive income. However, you are
still required to pay monthly tax.
27.
If I have losses from my home country, can I deduct those
losses? What about the prior year losses, are they deductible?
No,
you cannot deduct losses from your home country against income from
Indonesia or other countries.
Your
overseas prior year losses are not deductible.
28.
I am a dual resident of both Indonesia and my home country.
Indonesia has an income tax treaty with my home country. Am I still
required t file an Indonesia tax return?
As
you are a resident of Indonesia you need to file Indonesia tax return
until such time when the competent tax authorities determined your
residency.
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