People all over the world travel to Indonesia for numerous reasons, some come to relax in the sunny shores of Bali, and some visit for business opportunities in Jakarta, the capital and financial centre of Indonesia.
This results in her popularity amongst travellers and thus attractive for both individuals to migrate and businesses to expand in Indonesia. Just like any other country in the world, Indonesia has taxation rules and regulations that are mandatory to abide by for both individuals and corporations.
As the world battles on against tax crimes, Indonesia is doing the same and has since implemented laws to combat such activities. Here we discuss the tax crimes in Indonesia.
What are the Common Tax Crimes in Indonesia?
Tax crimes in Indonesia are when tax laws that has been implemented is violated. Tax crimes include but are not limited to:
Laws that Govern Taxation in Indonesia
Indonesian taxation laws are primarily based on Article 23A of the 1945 Indonesian Constitution. Article 23A states that tax is an enforceable contribution to be imposed on all Indonesian citizens, foreign nationals, and tax residents.
A foreigner can become an income tax resident as it is defined as someone who has been residing in Indonesia for 183 cumulative days within a 12-month period or someone who is present in Indonesia with the intention of residing in Indonesia.
Income sourced in Indonesia is taxes at a progressive rate of 5% to 30% depending on the sum of income. This is applicable for residents and tax residents of Indonesia only. As for non-tax residents, foreigners working in Indonesia for less than 183 days will have their income subjected to a standard rate of 20% tax.
It is advised to research on tax exemptions as there are exemptions applicable for both individuals and companies alike that may lessen the tax burden.
The common tax laws that should be noted are:
In the case of any indication of criminal activity is recognised, the case will be decided by the district court if any criminal proceedings are required to be performed.
Some tax-related objections that are brought before the administrative court are:
Punishments Imposed on Various Tax Crimes Committed in Indonesia
An individual, local or foreign, commits a tax crime in Indonesia if he/she violated any of the tax laws or regulations. For those who committed a tax crime in Indonesia, punishments will be imposed by the government. Below are some scenarios and consequences for committing a tax crime.
In the case that an individual is guilty of misusing or an unauthorised use of an NPWP or PKP, or committing the offence of submitting a SPT with incorrect or incomplete information in order to receive excess money from the tax authorities in the form of unlawful tax compensation tax credit can be subjected to the penalty of:
Other tax offenses which have been committed in Indonesia will cause the guilty party to be subjected to:
If a taxpayer has committed a criminal tax offense during the past year, the punishments may be increased to up to two times the original amounts and any term of imprisonment imposed is to be calculated from the time the offender completed the initial prison term if one had been imposed for the previous offense.
FAQs
Yes, work permit holders are eligible to apply for dependent visas for their spouse and children if they wish to live in Indonesia with you.
Indonesia has the biggest economy in South East Asia, this means that there is potential in the economic growth. Thus, Indonesia has a wide range of goods and services along with better standards of living.
In the city of Jakarta and Bali, there is a large expat community as it is popular amongst tourists and travellers alike.
The laws governing taxation, tax evasion, and avoidance are very strict in Indonesia. The Indonesian government deliberately chose to make the country’s tax laws strict in order to dissuade potential offenders from committing any tax crimes.
The Indonesian government has been very serious about reducing the tax crime rate. It continues to modify the tax laws of the country in order to prevent people from committing tax crimes as well as to more severely punish tax offenders. The Indonesian authorities have also increased the intensity of law enforcement with regard to tax crimes.
