Tax on property income in Indonesia
Taxation Researcher | January 11, 2023
Effective Tax Rate on Rental Income
|Click here to see a worked example|
Nonresidents are liable to pay tax on Indonesian-sourced income. Married couples are generally taxed jointly but may opt for separate taxation if there is a pre-nuptial agreement between husband and wife.
Nonresidents are taxed at a flat rate of 20%. Double-taxation agreements between Indonesia and other countries may reduce this to 10%.
Rental IncomeThe rental income of non-residents is taxed at a final withholding rate of 20% of gross income, unless DTT (Double taxation treaty) states otherwise.
Capital Gains TaxCapital gains are usually assessable at ordinary tax rates together with other income of the individual. In case of a non-resident, the Capital Gains tax is fixed at 20%
Property Tax (Pajak Bumi dan Bangunan, PBB)
Property tax is levied at progressive rates on the assessed value of the property.
|TAX BASE, IDR (US$)||TAX RATE|
|Up to 200 million (US$13,761)||0.01%|
|200 million – 2 billion (US$137,611)||0.10%|
|2 billion – 10 billion (US$688,054)||0.20%|
|Over 10 billion (US$688,054)||0.30%|
|Source: Global Property Guide|
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.