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Indonesia: Taxes and Costs

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Rental income tax is high in Indonesia

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000	US$12,000
Tax Rate	20%	20%	20%
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INDIVIDUAL TAXATION

Non-residents are liable to pay tax on Indonesian-sourced income. Married couples may opt for either joint or separate taxation.

INCOME TAX

Non-residents are taxed at a flat rate of 20%. Double-taxation agreements between Indonesia and other countries may reduce this to 10%.

RENTAL INCOME
The rental income of non-residents is taxed at a final withholding rate of 20% of gross income.

Value Added Tax (VAT)

10% Value-added tax (VAT) is levied on gross rental income.

CAPITAL GAINS
Capital gains realized from selling real property are taxed at 20%. Taxable capital gains are computed by deducting acquisition costs and improvement costs from the gross sales proceeds.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies are taxed at a flat rate of 28% for 2009. The applicable tax rate will be lowered to 25% in 2010.

Income-generating expenses and operating expenses are deductible when computing for the taxable income.

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

• Guide to buying houses and registering property sales in Indonesia

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