Indonesian Income Tax Law
Indonesia levies personal and corporate income taxes at the national level. Personal income taxes apply to earned income, capital gains and some employer-derived benefits, which are taxed at different rates.
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Taxable Earned Income
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The Indonesian tax system levies taxes on personal income earned from work on a sliding scale that places earners into four levels. Those earning less than 50 million rupiah are taxed 5 percent of their total income, while top earners making more than 500 million are taxed at a rate of 30 percent. Mid-range earners are taxed at 15 or 25 percent.
Capital Gains Taxes
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Individuals are required to pay a separate 15 percent withholding tax on any capital gains, such as money earned from dividends, interest or royalties. Employer-provided stock options are excluded, except at point of sale.
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Employee Benefits
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Employees who receive in-kind benefits like housing or vehicle allowances are not required to include them as taxable income, provided they are the type that are not deductible by the employer.
Nonresidents
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Non-Indonesian citizens will be considered residents if they are physically in the country for more than a total 183 days over a 12-month period and will be taxed the same as permanent residents and citizens. Others will be still be taxed on income derived from sources in Indonesia.
Corporate Income
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Businesses are levied a flat tax at a rate of 25 percent as of Fiscal Year 2010.
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References
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