Butler Visa Agency
Jl. Merta Nadi, Kuta, Kec. Kuta, Kabupaten Badung, Bali 80361
Jl. Merta Nadi, Kuta, Kec. Kuta, Kabupaten Badung, Bali 80361
Butler Visa Agency
Jl. Merta Nadi, Kuta, Kec. Kuta,
Kabupaten Badung, Bali 80361
Jl. Merta Nadi, Kuta, Kec. Kuta,
Kabupaten Badung, Bali 80361
A Comprehensive and Clear Tax Guide for Companies in Indonesia
Key Concepts: What Are Revenue and Profit?
Example: If you sell goods worth IDR 10 billion annually, this is your revenue.
2.Profit (Keuntungan):
This is what remains after all expenses have been deducted from revenue.
Example: If your company earns IDR 10 billion but spends IDR 8 billion on salaries, rent, and supplies, your profit is:
IDR 10 billion – IDR 8 billion = IDR 2 billion.
1. Corporate Income Tax (PPh Badan)
What is it?
Corporate Income Tax is a tax paid on profit, i.e., the money left after all expenses are deducted. It reflects the "net" income earned, which is subject to taxation.
Corporate Income Tax Rates (Non-Simplified System):
Corporate Income Tax Rates (Simplified System) — Available only for the first three years.
What is it?
A special incentive for small companies with annual revenue not exceeding IDR 4.8 billion. They can pay a fixed tax of 0.5% on revenue instead of calculating profit and paying the standard 22% rate.
How does it work?
If your company earns IDR 3 billion annually, you pay:
IDR 3 billion × 0.5% = IDR 15 million.
Payment Schedule:
Tax is paid monthly. For instance, if monthly revenue is IDR 250 million, the tax is:
IDR 250 million × 0.5% = IDR 1.25 million.
2. Value-Added Tax (VAT or PPN)
What is it?
VAT is a tax added to the price of goods or services sold by your company. This tax is not on your profit but is collected from customers and remitted to the government.
Who Must Pay VAT?
Companies with annual revenue exceeding IDR 4.8 billion are required to register as VAT payers and add an 11% tax to their goods or services.
VAT Rate: 11%.
Example:
If you sell a product for IDR 100 million, you add 11% VAT. The customer pays IDR 111 million, and you remit IDR 11 million to the government.
Payment Schedule:
VAT is paid monthly, by the 15th of the following month.
3. Employee Income Tax (PPh Pasal 21)
What is it?
This is a tax withheld from employee salaries. Employers are responsible for deducting this tax and remitting it to the tax authorities.
Tax Rates:
An employee earns IDR 5 million per month (IDR 60 million/year). The tax is:
IDR 60 million × 5% = IDR 3 million/year or IDR 250,000/month.
Payment Schedule:
Employee income tax is paid monthly, by the 10th of the following month.
4. Social Contributions (BPJS)
What is it?
BPJS is a government-run insurance system that includes healthcare and social security benefits.
Components:
For an employee earning IDR 5 million:
BPJS Kesehatan:
BPJS contributions are paid monthly, by the 10th of the following month.
5. Investment Activity Report (LKPM)
What is it?
LKPM is a report on a company’s investment activities, mandatory for companies with foreign capital (PT PMA) or those receiving investment incentives.
What Does LKPM Include?
6. Personal Director’s Report
What is it?
This is a tax declaration submitted by the company’s director, particularly important for foreign directors, to confirm their tax obligations and status in Indonesia.
Submission Deadline:
Annually, through the tax authority system, by March 31 of the following year.
Additional Notes
Even if your company is inactive or has zero income, some reports must still be filed with the tax authorities, even with zero values.
Aside from basic taxes, Indonesia has other taxes specific to certain businesses, such as:
- Revenue (Pendapatan):
Example: If you sell goods worth IDR 10 billion annually, this is your revenue.
2.Profit (Keuntungan):
This is what remains after all expenses have been deducted from revenue.
Example: If your company earns IDR 10 billion but spends IDR 8 billion on salaries, rent, and supplies, your profit is:
IDR 10 billion – IDR 8 billion = IDR 2 billion.
1. Corporate Income Tax (PPh Badan)
What is it?
Corporate Income Tax is a tax paid on profit, i.e., the money left after all expenses are deducted. It reflects the "net" income earned, which is subject to taxation.
Corporate Income Tax Rates (Non-Simplified System):
- Standard Rate: 22% of profit.
- Reduced Rate (11%): For companies with revenue not exceeding IDR 50 billion per year, the first IDR 4.8 billion of profit is taxed at 11%.
- If revenue exceeds IDR 50 billion, the reduced rate does not apply, and the entire profit is taxed at 22%.
- Annually: At the end of the fiscal year, calculate your total profit and file a tax return. Based on the return, pay the corporate income tax (PPh Badan).
- Monthly (Advance Payments): Companies are required to make monthly advance payments (PPh Pasal 25), which are credited toward the annual tax.
- Divide the previous year’s corporate income tax by 12.
Corporate Income Tax Rates (Simplified System) — Available only for the first three years.
What is it?
A special incentive for small companies with annual revenue not exceeding IDR 4.8 billion. They can pay a fixed tax of 0.5% on revenue instead of calculating profit and paying the standard 22% rate.
How does it work?
- The tax is calculated on gross revenue (Pendapatan), not profit (Keuntungan).
- The incentive applies only for the first three years after company registration.
If your company earns IDR 3 billion annually, you pay:
IDR 3 billion × 0.5% = IDR 15 million.
Payment Schedule:
Tax is paid monthly. For instance, if monthly revenue is IDR 250 million, the tax is:
IDR 250 million × 0.5% = IDR 1.25 million.
2. Value-Added Tax (VAT or PPN)
What is it?
VAT is a tax added to the price of goods or services sold by your company. This tax is not on your profit but is collected from customers and remitted to the government.
Who Must Pay VAT?
Companies with annual revenue exceeding IDR 4.8 billion are required to register as VAT payers and add an 11% tax to their goods or services.
VAT Rate: 11%.
Example:
If you sell a product for IDR 100 million, you add 11% VAT. The customer pays IDR 111 million, and you remit IDR 11 million to the government.
Payment Schedule:
VAT is paid monthly, by the 15th of the following month.
3. Employee Income Tax (PPh Pasal 21)
What is it?
This is a tax withheld from employee salaries. Employers are responsible for deducting this tax and remitting it to the tax authorities.
Tax Rates:
- Up to IDR 60 million/year: 5%.
- IDR 60–250 million/year: 15%.
- IDR 250–500 million/year: 25%.
- Over IDR 500 million/year: 30%.
An employee earns IDR 5 million per month (IDR 60 million/year). The tax is:
IDR 60 million × 5% = IDR 3 million/year or IDR 250,000/month.
Payment Schedule:
Employee income tax is paid monthly, by the 10th of the following month.
4. Social Contributions (BPJS)
What is it?
BPJS is a government-run insurance system that includes healthcare and social security benefits.
Components:
- BPJS Kesehatan (Health Insurance):
- Employer: 4% of employee salary.
- Employee: 1% of salary.
- Rates vary from 0.24% to 8%, depending on the type of insurance.
For an employee earning IDR 5 million:
BPJS Kesehatan:
- Employer: IDR 200,000 (IDR 5 million × 4%).
- Employee: IDR 50,000 (IDR 5 million × 1%).
BPJS contributions are paid monthly, by the 10th of the following month.
5. Investment Activity Report (LKPM)
What is it?
LKPM is a report on a company’s investment activities, mandatory for companies with foreign capital (PT PMA) or those receiving investment incentives.
What Does LKPM Include?
- Investment volume (e.g., equipment purchases, office rent).
- Revenue and expenses for the reporting period.
- Employee count, including local and foreign staff.
- Any business challenges faced.
- Companies with foreign investments (PT PMA).
- Companies receiving incentives or grants.
- Q1: By April 10.
- Q2: By July 10.
- Q3: By October 10.
- Q4: By January 10.
6. Personal Director’s Report
What is it?
This is a tax declaration submitted by the company’s director, particularly important for foreign directors, to confirm their tax obligations and status in Indonesia.
Submission Deadline:
Annually, through the tax authority system, by March 31 of the following year.
Additional Notes
Even if your company is inactive or has zero income, some reports must still be filed with the tax authorities, even with zero values.
Aside from basic taxes, Indonesia has other taxes specific to certain businesses, such as:
- Restaurant Tax: Up to 10% of the bill.
- Rental Tax: 10% of the rental amount, paid with each transaction.
- Dividend Tax: 15%, charged upon distribution.
Butler Visa is always ready to help you manage your tax and reporting obligations. If you prefer not to navigate the complexities of the Indonesian tax system on your own, we would be delighted to become your tax consultant. Entrust us with this task so you can focus on growing your business.
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