Residency
You are an Indonesian tax resident in any year in which you [1]:
- are physically present in Indonesia for more than 183 days within any 12-month period, or
- are present during the tax year and intend to reside (typically evidenced by a residence permit, KITAS or KITAP), or
- domicile is in Indonesia.
Indonesia uses a substance test, not a strict day-count alone. Acquiring a retirement KITAS while spending most of your year in Bali will normally make you a tax resident from arrival.
Income tax brackets, 2025 tax year
Under the Harmonisation of Tax Regulations Law (2021), resident individuals pay progressive rates [1]:
- up to 60 million IDR/year: 5 percent
- 60 to 250 million: 15 percent
- 250 to 500 million: 25 percent
- 500 million to 5 billion: 30 percent
- above 5 billion: 35 percent
As a rough guide, 60 million IDR is around 3,500 EUR and 500 million is around 29,000 EUR. Annual personal deductions are 54 million IDR for the taxpayer, plus 4.5 million for a non-working spouse and up to three dependants at 4.5 million each [1]. Non-residents pay a flat 20 percent withholding (Article 26) on Indonesian-source income, often reducible under treaty [2].
Foreign-source income
Indonesia taxes residents on worldwide income in principle [1]. Two important concessions:
- The 2021 Omnibus Law allows foreigners with specified expertise who become Indonesian tax residents to be taxed only on Indonesian-source income for their first four years as residents, provided technical conditions are met (specific occupations, formal application). It targets sought-after skilled hires rather than retirees, so most pensioners do not qualify [1].
- Indonesia has no remittance basis; once worldwide taxation kicks in (either from day one for ordinary residents, or after four years for qualifying expatriates), foreign income is taxable whether or not brought into Indonesia.
Foreign tax paid is creditable under Article 24 of the Income Tax Law, capped per country at the Indonesian tax otherwise due on that income [3].
Pension income
Indonesian-source pension distributions from government-approved pension funds and the BPJS Ketenagakerjaan old-age scheme attract favourable final rates: 0 percent on the first 50 million IDR and 5 percent on the excess, when paid as a lump sum or over no more than two years [1]. Periodic Indonesian pension payments form part of ordinary taxable income.
Foreign state and private pensions paid to an Indonesian-resident retiree fall into the worldwide-income net unless the relevant DTA reserves them to the source state. Most Indonesian treaties broadly follow the OECD model: government-service pensions are usually taxed only in the paying state, private pensions only in the state of residence. For UK or Irish state pensions remitted to a retired Indonesian resident, this typically means taxable in Indonesia at progressive rates, with credit for any UK or Irish tax withheld.
Capital gains
Indonesia does not run a stand-alone capital-gains tax for individuals on most assets. Material exceptions [4]:
- Sale of listed shares on the Indonesia Stock Exchange: final 0.1 percent of sale proceeds (founder shareholders may add 0.5 percent on listing value).
- Sale of land or buildings: 2.5 percent of gross transfer value, paid by the seller, plus a buyer-side acquisition duty (BPHTB) of up to 5 percent.
- Sale of unlisted shares by a resident individual: gains taxed as ordinary income at progressive rates.
Indonesia levies an annual Land and Buildings Tax (PBB) of up to 0.5 percent of regional-government assessed value [4].
Inheritance and gift tax
Indonesia has no inheritance, estate or gift tax [4]. Inheritances and gifts received are not subject to PIT. The acquisition duty (BPHTB) on inherited real estate uses a higher non-taxable threshold of 300 million IDR.
Worldwide investment income
Indonesian residents pay tax on foreign dividends, interest, royalties and most foreign capital gains, with treaty rate caps and a foreign-tax credit available [3]. Indonesia withholds 20 percent on outbound passive income under Article 26, usually reduced by treaty for cross-border payments to qualifying recipients [2].
Treaty status with IE, GB, US, DE, FR
Indonesia has 70-plus comprehensive DTAs [5,3]. All five origin countries have treaties in force:
- Ireland: signed 12 March 2008, in force 8 May 2009, applies from 1 January 2010.
- United Kingdom: original treaty 1993, latest protocol in force 2002.
- Germany: original treaty 1990, currently in force.
- France: signed 14 September 1979, in force 1981.
- United States: signed 11 July 1988, in force 1990 (Indonesia's only DTA with the US in our origin set).
Withholding-rate matrices are published by the DGT [6]. To claim relief, the non-resident counterparty must file form DGT-1 or DGT-2 with the Indonesian payer.
Filing notes
The Indonesian tax year is the calendar year. Individual annual returns (SPT Tahunan, form 1770 / 1770S / 1770SS) are due by 31 March of the following year, with tax owed paid before filing [7]. Late filing of the individual return triggers an IDR 100,000 administrative penalty (small but compounds with surcharges on unpaid tax). Filings are in Bahasa Indonesia; e-filing via DJP Online is the standard channel for residents. You need a taxpayer identification number (NPWP). The local KPP issues it on submission of KITAS or KITAP plus passport.
Not tax advice
This is a relocator-level overview. Indonesian tax administration is regulation-heavy and tax-office practice varies by region. Engage an Indonesian tax adviser before applying for the four-year skilled-foreigner concession, taking large lump-sum pension payments, or transferring property [1].