Navigating Indonesia’s taxation system can be complex, but compliance is crucial for businesses to maintain legal standing and avoid penalties. At Kusuma & Partners, we offer end-to-end support for both Monthly and Annual Tax Compliance services, ensuring that you meet your obligations under the Indonesian tax regulation framework. Our goal is to simplify tax management so you can focus on your business.
(1) With holding Tax (PPh Pasal 21, 23, 26, 4(2))
Indonesian businesses must withhold certain taxes on payments to employees, suppliers/contractors, and other service providers. These include income tax for salaries (PPh 21), services (PPh 23), dividends, interest, and royalties (PPh 26 for non-residents), and final tax on certain transactions (PPh 4(2)).
Procedure:
(2) Value-Added Tax (VAT) / (Pajak Pertambahan Nilai – PPN)
VAT is imposed on the sale of goods and services in Indonesia. Registered taxpayers (PKP) must calculate and report VAT monthly.
Procedure:
(1) Corporate Income Tax (PPh Badan)
Every company in Indonesia must file an annual corporate income tax return.
Procedure:
(2) Personal Income Tax (PPh Orang Pribadi)
Personal income tax is due for individuals residing in Indonesia.
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Our Monthly and Annual Tax Compliance Procedures Mechanism
The Indonesian tax regulation framework imposes a structured mechanism for compliance, including deadlines, penalties for late submissions, and audits. We assist clients by following this mechanism diligently:
Employing foreign workers requires specific permits, including a Work Permit (IMTA) and a temporary stay permit (KITAS). Employers must also provide a clear reason why the position cannot be filled by an Indonesian worker and ensure the foreign worker’s role aligns with approved positions under the Ministry of Manpower’s regulations.
Working without a proper Work Permit KITAS (Index E23) is a serious violation of Indonesian immigration laws. It can lead to fines, deportation, and possible blacklisting, preventing future entry into Indonesia. Always ensure you have the correct permit before engaging in any employment.
These agreements provide certainty and predictability in asset division, protect family wealth, and reduce conflicts in the event of divorce or separation. They allow couples to plan for the future and safeguard their financial interests.
Failure to register a foreign marriage in Indonesia may lead to not having a legal standing and complications in legal matters such as property ownership and inheritance matters. It is important to ensure proper registration to secure legal recognition and rights in Indonesia.
Overstaying your visa or KITAS can lead to fines of IDR 1 million per day, and if overstaying persists, deportation and potential blacklisting from Indonesia are possible. It’s important to ensure timely renewals and proper visa management.
In the event of a Merger or Acquisition (M&A), employees’ rights and contracts must be maintained, or the new employer must negotiate new terms with the affected employees. Severance and compensation payments may be applicable if there are changes to the employment terms or if employees are terminated as a result of the merger.
In most cases, changing visa types (e.g., from a Business Visa to a KITAS) requires leaving Indonesia and applying from abroad. However, specific visas, such as a temporary visa to KITAS, may be converted under certain conditions. We can guide you on the best approach based on your situation.
Minimum wages are set by the government and vary by region. Employers must ensure that wages paid to employees are at least equal to the regionally established minimum wage. Failure to comply can result in sanctions and penalties.
