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Jun 13, 2017

Living There


INDIVIDUAL TAXATION

Indonesia Malang East Java real estate

Residents are taxed on their worldwide income. An individual is a resident if he 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 are generally taxed jointly but may opt for separate taxation if there is a pre-nuptial agreement between husband and wife.

INCOME TAX

Income is classified as follows: (1) income from business or independent profession, (2) employment income, and (3) 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$3,760) 5%
50 million – 250 million (US$18,797) 15% on band over US$3,760
250 million – 500 million (US$37,594) 25% on band over US$18,797
Over 500 million (US$37,594) 30% on all income over US$37,594
Source: Global Property Guide

Resident taxpayers are entitled to the following allowances:

  • IDR36,000,000 (US$2,707) for the taxpayer
  • IDR3,000,000 (US$226) for the spouse, if the married couple does not opt for separate taxation
  • IDR3,000,000 (US$226) for each dependent; maximum of three dependents

RENTAL INCOME
Rental income is taxed at progressive rates. Income-generating expenses are deductible when computing for the taxable income.

Rental income earned by resident individuals is subject to 2% withholding tax. This tax is deductible against the final income tax liability.

CAPITAL GAINS

Land and Building Transfer Duty

The land and building transfer duty is levied at a flat rate of 5%, and is charged to the seller. The tax base is the transfer value of the property. There is a non-taxable amount which varies per region, and the non-taxable amount is IDR80 million (US$6,015) in Jakarta. This tax is different from the transfer tax.

Sales Tax on Luxury Goods
Sales of luxury houses, apartments, townhouses, and condominium units are subject to 20% sales tax. Luxury houses and townhouses have a selling price of IDR20 billion (US$1,503,760) and above. Luxury apartments and condominium units have a selling price of IDR10 billion (US$751,880) and above.

PROPERTY TAX


Property Tax (Pajak Bumi dan Bangunan, PBB)

Property tax is levied at progressive rates on the assessed value of the property.

PROPERTY TAX

TAX BASE, IDR (US$) TAX RATE
Up to 200 million (US$15,038) 0.01%
200 million – 2 billion (US$150,376) 0.10%
2 billion – 10 billion    (US$751,880) 0.20%
Over 10 billion (US$751,880) 0.30%
Source: Global Property Guide

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies are taxed at a flat rate of 25%. Income-generating expenses and operating expenses are deductible when computing for the taxable income.






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