Taxpayers in Indonesia are obligated to withhold taxes on certain payments to resident and non-residents. The tax withheld from payments to non-residents is a final tax. Meanwhile for residents, the withheld tax can represent a final income for the recipient or as a prepaid tax which is creditable against their final tax liabilities.
Withholding tax rate for residents and non-residents
Withholding tax applies to both residents and non-resident companies in Indonesia. The withholding tax rate on other payment types such as dividends, interests and royalties also vary depending on whether the taxpayers are residents or non-residents.
|
Nature of income |
Withholding tax rate (%) |
|
|
Residents |
Non-residents |
|
|
Dividends |
15% |
20% |
|
Interest |
15% |
20% |
|
Royalties |
15% |
20% |
Withholding tax on salaries
Employers must withhold the tax from salaries and severance payments paid to employees and pay the tax to the State Treasury on their behalf. Resident taxpayers who do not have a tax ID is subject to a tax rate of 20 percent.
Withholding tax for major types of payments
The withholding tax rates for certain payments are of the following:
|
Type of payment |
Withholding tax rate (%) |
|
Import of certain consumer goods using an Importer Identification Number |
7.5-10% (of import value) |
|
Import of soybeans, wheat, and wheat flour using an Importer Identification Number |
0.5% (of sales value) |
|
Import of goods other than soybeans, wheat, and wheat flour using an Importer Identification Number |
2.5% (of import value) |
|
The import of goods without an using an Importer Identification Number |
7.5% (of import value) |
|
The import of auctioned goods |
7.5% (of auctioned value) |
|
The purchase of goods from the government requiring payment from the State Treasury |
1.5% (of sales value) |
|
The purchase of goods from a state-owned enterprise or their subsidiaries |
1.5% (of the selling price) |
|
The purchase of fuel oil by the state-owned energy company, Pertamina, and its subsidiaries |
0.25% (of the selling price) |
|
The purchase of fuel oil by gas stations owned by entities other than Pertamina |
0.25% (of the selling price) |
|
The purchase of fuel oil by parties other than gas stations |
0.3% (of the selling price) |
|
The export of metal and non-metal minerals, and coal by exporters other than those engaged in a Cooperation Agreement or a Contract of Work with the Government |
1.5% (of the export value) |
|
The purchase of coal, and metal and non-metal minerals by entities holding a mining business license |
1.5% (of the selling price) |
|
The purchase of gold bars |
0.45% (of the selling price) |
|
The purchase of highly luxurious items (private aircraft, yachts, condominiums, certain vehicles) |
5% (of the selling price) |
|
The imports of steel products by local distributors |
0.3 (of the selling price) |
|
The purchase of automotive products by local distributors |
0.45% (of the selling price) |
|
The purchase of pharmaceutical products by local distributors |
0.45 %(of the selling price) |
|
The purchase of plantation, forestry, fishery, and cattle breeding products by local manufacturers or exporters |
0.25% (of the selling price) |
|
The purchase of paper products by local distributors |
0.1% (of the selling price) |
|
The purchase of fuel gas |
0.3% (of the selling price) |
|
The purchase of cement by local distributors |
0.25% (of the selling price) |
Withholding tax for specific types of incomes
Resident companies, foreign companies, representatives of foreign companies, or other individuals or organizations must withhold the final tax from the following payments to resident taxpayers.
|
Payment type |
Withholding tax rate (%) |
|
Rental of land or buildings |
10% |
|
Construction work |
1.75 %(small businesses or individuals with certification) 4 (companies or individuals with no certification) or 2.65% (medium or large companies) |
|
Construction consulting |
3.5% (companies or individuals with certification) or 6 (companies or individuals with no certification) |
|
Integrated construction work |
2.65% (companies with certification) or 4 (companies without certification) |
|
Income from lottery prizes |
25% |
|
Proceeds from the sale of shares on the Indonesia Stock Exchange |
0.1% |
