About us

What are the key regulations governing labor & employment in Indonesia?

Law No. 13 of 2003 on Manpower, as amended by Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation, Law No. 2 of 2004 on Industrial relations Dispute Settlement, Government Regulation No. 35 of 2021, etc.,

What are the legal grounds for terminating an employee in Indonesia?

It will be varied, including company’s merger & acquisition or company’s liquidation, company is under bankrupt, company’s financial condition, completion of employment contract, violation of employment contract, gross misconduct, employee resigns voluntarily, etc.,

What is the minimum notice period to terminate employment?

At least 14 business days, or 7 business days is termination is during probationary period. For employee resignation, written notice must be submitted by the employee at least 30 days before the last day.

What is the company’s obligation (financial compensation) to its terminated employee?

For a Permanent employee, the company is obliged to pay a severance package, which comprises: severance pay, service appreciation pay, and compensation of entitlements.

For a Fixed-Term employee, the company must compensate the employee in an amount equivalent to the remaining salary of the employee until expiry of the employment contract.

What taxes must businesses pay monthly in Indonesia?

Businesses in Indonesia typically pay withholding taxes (PPh 21, 23, 26), VAT (PPN), and final taxes (PPh 4(2)) on a monthly basis. These taxes are due by the 10^th or 15^th of the following month, depending on the tax type, with filings due by the 20^th.

What is the deadline for filing my company’s annual corporate tax return?

The annual corporate tax return (SPT Tahunan PPh Badan) is due by the 30^th of the 4^th month after your fiscal year ends. For most companies, this means April 30^th.

What happens if I miss a tax payment deadline?

Late tax payments are subject to interest penalties under Indonesian tax law. We help clients ensure timely payments to avoid such penalties.

Do individuals need to file an annual tax return?

Yes, individuals earning income in Indonesia must file their personal income tax return (SPT Tahunan PPh Orang Pribadi) by March 31^st each year.

How can I ensure my company is VAT-compliant?

To remain VAT-compliant, businesses must calculate and pay VAT on all taxable goods and services monthly, filing the necessary returns by the 20^th of the following month. We can assist with accurate calculations and on-time filing.

What are the penalties for incorrect or late tax filings?

The penalties for incorrect or late tax filings can include fines, interest penalties, and in some cases, further investigations by the tax authority. We prioritize accuracy and timeliness to help you avoid these penalties.

What is the role of withholding tax (PPh 21, 23, 26) in my business?

Withholding tax obligations apply to salaries, services, dividends, royalties, and payments to non-residents. It is your responsibility to withhold these taxes and report them monthly to the tax authorities.

How do I calculate my corporate income tax?

Corporate income tax is calculated by reconciling your financial statements according to tax regulations, determining your taxable income, and applying the corporate tax rate. We provide guidance on accurate calculations and filing.

Is there any audit risk if I follow the tax compliance procedures?

While following the tax compliance procedures lowers your audit risk, the Indonesian tax authority may still select your company for an audit. We support you during the audit process to ensure smooth handling.

What records do I need to maintain for tax compliance?

You need to maintain accurate records of all financial transactions, including sales, purchases, payroll, and expenses. Proper documentation is essential for monthly and annual tax filings and audits.

Are there any tax incentives for businesses in Indonesia?

Yes, certain industries and regions qualify for tax incentives, such as reduced corporate income tax rates or tax holidays. We can help identify any applicable incentives for your business.

What should I do if I discover an error in my tax return after submission?

If you find an error in your tax return, you can submit an amendment to correct it. We assist in preparing amended returns and communicating with the tax authorities to minimize any penalties.

What should I do if I cannot meet the tax payment deadline?

If you anticipate a delay in tax payment, it’s crucial to notify the tax authority and explore possible payment extensions. However, penalties may still apply. We advise on how to manage such situations effectively.

How can I stay updated on changes in tax regulations?

Tax regulations in Indonesia can change frequently. We keep our clients informed of any changes that may affect their tax obligations and ensure compliance with the latest rules.

Can foreign companies operating in Indonesia also file tax returns?

Yes, foreign companies with a Permanent Establishment (PE) in Indonesia are subject to local tax regulations and must file monthly and annual tax returns. We specialize in helping foreign companies comply with Indonesian tax laws.

A CLA is a negotiated agreement between the employer and a registered labor union, outlining terms of employment for the union members. It covers salaries, benefits, dispute resolution mechanisms, and working conditions. CLAs must be registered with the Ministry of Manpower.

Why is a Tax Diagnostic Review important?

Conducting a Tax Diagnostic Review ensures your business is fully compliant with Indonesian tax laws, minimizes the risk of penalties, and helps optimize your tax obligations.

What happens if the review identifies issues?

If any issues are found, we provide clear, actionable recommendations to address them. Our team also assists with implementing these solutions to ensure compliance.

What are the common issues identified during a Tax Diagnostic Review?

Common issues include underreported income, incorrect tax rate applications, missed deadlines, improper deductions, and misinterpretation of tax laws.

Can a Tax Diagnostic Review help with past tax audits?

Yes, the review can identify areas that may have been overlooked in past audits and help you prepare for any future audits by ensuring compliance and addressing any lingering issues.

How does a Tax Diagnostic Review benefit my business?

It helps you avoid costly penalties, ensures compliance with tax laws, and identifies opportunities for tax savings and optimization.

What types of businesses can benefit from a Tax Diagnostic Review?

Businesses of all sizes and industries can benefit from a Tax Diagnostic Review, especially those with complex tax structures, frequent transactions, or a history of tax audits.

Will the Tax Diagnostic Review impact my current tax filings?

The review itself doesn’t impact your current filings, but it may reveal areas that require adjustments in future filings or amendments to past returns to ensure accuracy.

How does a Tax Diagnostic Review differ from a tax audit?

A Tax Diagnostic Review is a proactive, voluntary assessment conducted by your chosen tax professionals, focusing on compliance and optimization. A tax audit, on the other hand, is an official examination conducted by tax authorities.

Can the review identify opportunities for tax savings?

Absolutely. Part of the review process involves identifying legal tax-saving opportunities, such as unclaimed deductions, credits, and incentives that your business may qualify for.

Will a Tax Diagnostic Review prevent future tax penalties?

While no review can guarantee the complete elimination of future penalties, a thorough Tax Diagnostic Review significantly reduces the risk by identifying and addressing potential issues proactively.

What is the outcome of a Tax Diagnostic Review?

The outcome is a comprehensive report detailing our findings, along with practical recommendations to enhance compliance, reduce risks, and optimize your tax obligations.

Can the review address industry-specific tax concerns?

Yes, our team tailors the review to your specific industry, addressing any unique tax challenges or regulations that apply to your business sector.

Yes, as an investor, you are allowed to manage and oversee your investments. However, the Investor KITAS does not permit traditional employment for other companies; it only covers activities related to managing your investments.