Corporate Tax in Indonesia

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Corporate Tax services in Indonesia2021-09-03T13:59:48+08:00

Understanding the Corporate Tax System in Indonesia

Corporate tax is a vital part of the Indonesian tax system. The corporate tax which is paid by Indonesia’s companies helps the country’s government operate in the most suitable way possible. Therefore, corporate tax keeps the country functioning in a proper and smooth manner.

The sole purpose of any business activity is to earn profits. While this profit largely benefits the owner of the business and the employees, it will also benefit the government through corporate tax.

Corporate tax refers to deductions made on entities taxable in a certain jurisdiction. Similar to companies of other nations, companies in Indonesia are required to pay their tax obligations as required by the Indonesian government.

Indonesia Corporate Tax Rates

A flat rate of 25%. However, a tax cut of 5% is available to public companies which satisfy the requirement of having a minimum listing of 40%.

Small enterprises which have a gross turnover of less than 50 billion rupiah may also claim a 50% exemption with regard to the taxes which they would normally pay.

Company Tax Exemption Criteria

5% tax exemption for companies listed on Indonesia Stock Exchange (IDX) that offer at least 40% of total share capital to the public.

50% tax discount for Small and Medium Enterprises (SMEs) with an annual turnover below IDR 50 billion.

FAQs

Why have some of Indonesia’s Tax Laws have amended?2021-06-05T12:32:07+08:00

A country’s tax laws ought to reflect the economic realities present in the country. At certain points, the tax laws of Indonesia were out of step with the country’s economic conditions. Therefore, they had to be amended to correct this problem.  

Why does Indonesia have Social Security Schemes?2021-06-05T12:31:18+08:00

Indonesia’s social security schemes are intended to protect the welfare of employees. They provide employees with benefits in cases of old age or retirement, injuries suffered at work, or even death. Through these schemes, the Indonesian government upholds employees’ labor rights. 

How has Indonesia’s Corporate Tax Rate changes over the years?2021-06-05T12:30:56+08:00

The latest change to Indonesia’s corporate tax rate took place in 2010. In that year, the tax rate fell from 28% to 25%. The highest corporate tax rate to have ever existed in Indonesia was 39%.

Which Companies are Tax Residents in Indonesia?2021-06-05T12:29:14+08:00

The primary criterion for a company to be considered a tax resident of Indonesia is having a permanent establishment or primary place of management in Indonesia. Resident companies of Indonesia are taxed based on the income they earn anywhere in the world.

What is the Tax Rate in Indonesia?2021-06-05T12:28:43+08:00

A flat rate of 25%.

What is a Tax ID number?2021-06-07T01:31:19+08:00

In Indonesia, all taxpayers are identified through a tax ID number. This number is issued by authorities at a Tax Office. A tax ID number in Indonesia is also known as a Nomor Pokok Wajib Pajak (NPWP).

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Paul Hype Page & Co ensures both your company and your compliance meet the standards required for corporate tax submissions, tax filing, various tax matters including tax deductions and exemptions.

Our team of specialists are well-versed with the latest trends of tax laws and practices. We offer you support to deliver more than just an ordinary tax return.

Our Indonesia Tax Compliance Services include:

  • Update you with Indonesia tax regulations and compliance requirements

  • Monitor the statutory deadlines and meet the compliance filing deadlines

  • Preparation and filing an estimated chargeable income

  • Preparation/reviewing tax provision calculations based on the information provided

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