Indonesia: Living There - Tax Issues
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Living There
INDIVIDUAL TAXATION
Residents are taxed on their worldwide income. An individual is a resident if he has stayed in Indonesia for 183 days in any 12-month period or if resident in Indonesia with the intention of staying in the country. Married couples may opt for either joint or separate taxation.
INCOME TAX
Income is classified as follows:
- Income from business or independent profession
- Employment income
- Other income (including interest, dividends, insurance payments, royalties, lottery prizes, gains on sales or transfers of property, foreign exchange gains, insurance premiums, and any other income which has not yet been taxed
Taxable income from different sources is computed separately. Taxable income from all sources are then aggregated and taxed at progressive rates.
INCOME TAX |
|
| TAXABLE INCOME, INR (US$) | TAX RATE |
| Up to 50 million (US$4,536) | 10% |
| 50 million – 250 million (US$22,679) | 15% on band over US$4,536 |
| 250 million – 500 million (US$45,358) | 25% on band over US$22,679 |
| Over 500 million (US$4,536) | 30% on all income over US$45,358 |
| Source: Global Property Guide | |
RENTAL INCOME
Rental income is taxed at progressive rates. Income-generating expenses are deductible when computing for the taxable income.
Value Added Tax (VAT)
10% Value-added tax (VAT) is levied on gross rental income.
CAPITAL GAINS
Capital gains realized from the sale of real property in Indonesia are taxed at the standard income tax rates. Taxable capital gains are computed by deducting acquisition costs and improvement costs from the gross sales proceeds.
PROPERTY TAX
Property Tax
Property tax is levied at 0.5% on the assessed value of the property. The assessment value of taxable property is determined as a percentage of the deemed fair market value of the property, as follows:
- 40% for forestry and plantation land
- 20% for mining land
- 40% for any other type of land where the sale value of the land is more than IDR1 billion (US$90,716)
- 20% for any other type of land where the sale value of the land is less than IDR1 billion (US$90,716)
Indonesia - more data and information
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