As with Indonesian citizens, foreigners who work, conduct economic activities, or have assets in Indonesia also have an obligation to pay taxes in Indonesia. Tax obligations for foreigners are regulated in Law Number 28 Year 2007 on General Provisions and Tax Procedures (KUP Law).
Some types of taxes that foreigners may have to pay in Indonesia include:
1. Income tax (PPh)
Income tax is a tax imposed on income earned by individuals or entities. Foreigners working in Indonesia will usually be subject to income tax on their income in Indonesia. The income tax payable will depend on the type of income received and the applicable income tax rate.
2. Value-added tax (VAT)
Value-added tax is a tax imposed on the sale of goods or services. Foreigners who own businesses or conduct economic activities in Indonesia may also have to pay VAT.
3. Land and building tax (PBB)
Land and building tax is a tax levied on the ownership of property such as land and buildings. Foreigners who own property in Indonesia may also have to pay PBB.
In addition to the three taxes above, there are other taxes such as motor vehicle tax and stamp duty that may also have to be paid by foreigners living or conducting activities in Indonesia.
It is important to remember that the tax provisions for foreigners in Indonesia may vary.