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)).
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(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.
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(1) Corporate Income Tax (PPh Badan)
Every company in Indonesia must file an annual corporate income tax return.
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(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:
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 10th or 15th of the following month, depending on the tax type, with filings due by the 20th.
The annual corporate tax return (SPT Tahunan PPh Badan) is due by the 30th of the 4th month after your fiscal year ends. For most companies, this means April 30th.
Late tax payments are subject to interest penalties under Indonesian tax law. We help clients ensure timely payments to avoid such penalties.
Yes, individuals earning income in Indonesia must file their personal income tax return (SPT Tahunan PPh Orang Pribadi) by March 31st each year.
To remain VAT-compliant, businesses must calculate and pay VAT on all taxable goods and services monthly, filing the necessary returns by the 20th of the following month. We can assist with accurate calculations and on-time filing.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
