A tax imposed on profits from the sale of assets such as property, shares, and cryptocurrencies.
When it comes to investing in Indonesia, whether in real estate, startup equity, digital assets, or public companies, one crucial element that cannot be overlooked is Capital Gains Tax Indonesia. Many investors focus on profit generation and strategic growth but fail to prepare for the tax consequences of their gains. That’s where problems can begin.
Indonesia has evolved into a major investment hub in Southeast Asia, drawing capital from around the world. From property developers in Jakarta or Bali to foreign shareholders in Indonesian startups, investors are constantly seeking opportunities to generate wealth. Yet many overlook the tax implications of these gains, often until it’s too late.
Capital gains are not just accounting numbers; they are taxable income under Indonesian law. Failing to understand your tax obligations can lead to delays, audits, unexpected liabilities, and penalties. So, if you plan to sell an asset and walk away with a profit, understanding Capital Gains Tax Indonesia is a must.
Capital Gains Tax is a levy on the profit derived from the sale or transfer of capital assets. In Indonesia, CGT is not treated as a separate tax, but rather as part of your overall income tax (PPh), as regulated under Law No. 7 of 2021 concerning the Harmonization of Tax Regulations (HPP Law). The law classifies capital gains as a form of income, thus subjecting them to taxation.
But it doesn’t stop there. Indonesia applies different rates and rules depending on the type of asset and the residency status of the taxpayer. This is what makes CGT particularly complex and risky if not managed carefully.
Indonesia’s tax net is wide when it comes to capital gains. The types of transactions that commonly trigger CGT include:
Each of these has its own rules and exceptions, which we will explore further. But the key takeaway is this: If you’re selling something valuable, it’s likely subject to Capital Gains Tax Indonesia.
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Both individuals and corporations are responsible for capital gains tax. Whether you’re a solo investor flipping properties or a multinational selling shares in a joint venture, CGT applies. However, the tax treatment and reporting requirements differ depending on whether you’re classified as an individual taxpayer (Orang Pribadi) or a corporate taxpayer (Badan Usaha).
Individual taxpayers must report capital gains as part of their annual personal income tax (SPT), whereas companies record such gains in their corporate income tax filings. The legal nuances here can have a major impact on your effective tax rate and exposure to penalties.
Indonesia does not shy away from taxing foreign investors. In fact, if you’re a non-resident individual or company that earns capital gains from Indonesian assets, you’re very likely subject to tax here. This includes the sale of Indonesian property, shares in Indonesian companies, or even assets held indirectly through offshore vehicles.
However, relief may be available. Indonesia has double tax treaties (DTTs) with over 70 countries. These treaties often limit or eliminate CGT on certain cross-border transactions. If you’re investing from Singapore, the Netherlands, or Japan, for instance, you might benefit from favorable provisions provided your structure is compliant.
When it comes to shares, the tax rate is calculated based on the gross transaction value, not the net profit. That’s a game-changer for investors.
These rates might seem low at first glance, but when applied to large transactions, the numbers add up fast.
This is where many investors in Indonesia run into trouble. Capital gain from the sale of real estate is subject to a final tax of 2.5% of the gross selling price—not the profit margin. Even if the seller barely breaks even, the tax applies.
Additionally, the buyer is subject to 5% BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan), making real estate transactions among the most heavily taxed in the country.
Since 2022, Indonesia formally recognizes cryptocurrency transactions for tax purposes. As per Directorate General of Taxes (DGT) Circular SE-04/PJ/2022:
These are final taxes and only apply when transactions are conducted through registered local exchanges.
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There is good news for corporate groups. Under PMK No. 90/PMK.03/2020, asset transfers between companies in the same group may qualify for non-taxable status, provided they fulfill several conditions, such as:
Such exemptions are useful for holding company reorganizations, spin-offs, or internal M&A.
Indonesia also offers tax holidays and capital gain exemptions for investment in Strategic National Projects (PSN), Special Economic Zones (SEZs), and green energy sectors. These policies aim to promote long-term, sustainable development and offer real tax-saving opportunities for forward-looking investors.
In many capital gain transactions, especially those involving real estate or share transfers, the buyer or notary is legally obligated to withhold and deposit the tax on behalf of the seller. This makes the system more secure for the tax authority but also adds a layer of complexity.
For foreign investors, this often means your counterparty will automatically deduct your CGT before releasing payment. You must ensure that your sale agreement reflects this accurately.
Even when CGT is withheld, the taxpayer must report the transaction in their Annual Tax Return (SPT Tahunan). This includes:
Non-compliance or underreporting can lead to penalties of 2% per month, and if found to be deliberate, may result in criminal investigation.
Foreign investors often face these common challenges:
That’s why a proactive legal-tax structure is essential. The earlier you plan, the more you save and the more protected you are.
In M&A deals, capital gain tax is a silent deal-breaker if not carefully planned. For example:
Due diligence must include CGT risk assessment to prevent surprises. Kusuma & Partners regularly advises both buy-side and sell-side on how to structure their transactions tax-efficiently and compliantly.
CGT isn’t optional and Indonesia is increasing tax enforcement. If you fail to comply:
Tax evasion cases have led to business closures, frozen assets, and damaged reputations. Prevention through tax advice is far less expensive than damage control.
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At Kusuma & Partners, we’ve helped clients across industries from real estate, manufacturing, fintech, to mining, navigate the complex and evolving landscape of Capital Gains Tax Indonesia. Whether it’s reviewing transaction documents, securing treaty benefits, or representing clients before the tax authority, our firm is positioned to deliver clarity, protection, and results.
We believe that smart tax planning isn’t about avoiding taxes; it’s about paying the right amount, at the right time, and in the most efficient manner legally possible.
Capital gains are a sign of success, but they also come with responsibility. Understanding Capital Gains Tax Indonesia isn’t just a box-ticking exercise; it’s a strategic priority. Whether you’re planning to sell shares, dispose of property, or cash out crypto, make sure you get the full legal and tax picture.
The earlier you involve a legal & tax advisor, the better you can protect your investment and future.
Selling an asset or planning a corporate strategy? Let Kusuma & Partners Law Firm help you do it right legally and efficiently. We’re here to advise, structure, and protect your interests.
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“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”
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