For many taxpayers in Indonesia, an active Tax Identification Number (Nomor Pokok Wajib Pajak or NPWP) continues to carry tax rights and obligations, even if they are no longer earning income or conducting business. Failing to update your tax status when your circumstances change could lead to unnecessary administrative obligations or future compliance issues.
To provide greater legal certainty and improve taxpayer administration, the Directorate General of Taxes (DGT) introduced Director General of Taxes Regulation PER-7/PJ/2025, allowing eligible taxpayers to apply for Non-Active Taxpayer (Wajib Pajak Nonaktif) status.
The new mechanism enables taxpayers whose tax obligations have changed to update their status accordingly, ensuring that Indonesia’s tax records accurately reflect their current circumstances.
What Is Non-Active NPWP Status?
A Non-Active Taxpayer status allows eligible individuals and entities to temporarily suspend their tax obligations when they no longer meet the requirements to remain active taxpayers.
Rather than leaving an active NPWP attached to someone who no longer earns taxable income or qualifies as an Indonesian tax resident, taxpayers may apply to have their status updated under the provisions of PER-7/PJ/2025.
This administrative update helps align tax rights and obligations with the taxpayer’s actual situation while reducing the risk of future compliance issues.
Who Can Apply for Non-Active NPWP Status?
The regulation outlines several categories of taxpayers who may be eligible.
Employees or Individuals Without Income
Individuals who:
- are not carrying on a business or independent profession;
- currently have no income; or
- earn income below Indonesia’s Non-Taxable Income Threshold (PTKP),
may apply for Non-Active Taxpayer status if they no longer meet the criteria of an active taxpayer.
Former Business Owners or Freelancers
Individuals who previously operated a business or worked as independent professionals may also qualify if:
- all business activities have permanently ceased; and
- they no longer receive income from those business or professional activities.
Maintaining an active NPWP after business operations have ended may result in unnecessary administrative obligations.
Married Women Whose Tax Obligations Are Combined with Their Husband
A married woman who elects to combine her tax rights and obligations with her husband’s tax profile may also apply for Non-Active Taxpayer status.
Although her National Identity Number (NIK) remains linked to the tax administration system, her tax obligations will follow her husband’s registration.
Indonesian Citizens Becoming Foreign Tax Residents
The regulation also accommodates Indonesian citizens whose tax residency status changes.
Prospective Foreign Tax Residents
Indonesian citizens planning to become Foreign Tax Subjects (Subjek Pajak Luar Negeri/SPLN) may apply if they are in the process of meeting the applicable requirements.
Individuals Already Classified as Foreign Tax Residents
Those who have officially become Foreign Tax Subjects may also apply for Non-Active Taxpayer status, as they no longer qualify as Indonesian domestic taxpayers under prevailing tax regulations.
Other Circumstances
Applications may also be submitted where an individual no longer satisfies the subjective or objective criteria required to remain an Indonesian taxpayer under applicable tax laws.
Can Companies Also Apply?
Yes. PER-7/PJ/2025 also applies to certain non-individual taxpayers.
Corporate Taxpayers
Companies or legal entities that no longer fulfil the requirements to remain active taxpayers—but whose NPWP is still active or currently undergoing deletion—may apply for Non-Active Taxpayer status.
Government Institutions
Government agencies that are no longer required to act as tax withholding or tax collecting entities, while still holding an active NPWP, may also utilise this administrative mechanism.
Why Is It Important to Update Your NPWP Status?
Leaving your NPWP active when your tax circumstances have changed may create unnecessary reporting obligations and increase the risk of future administrative issues.
Updating your tax status helps ensure that:
- your taxpayer records remain accurate;
- your tax obligations reflect your actual circumstances;
- unnecessary compliance requirements are avoided; and
- potential administrative sanctions can be minimised.
Whether you have stopped working, closed your business, relocated overseas, or experienced another significant change in your tax residency or income status, reviewing your NPWP status is an important part of maintaining tax compliance in Indonesia.
Needing Help with Your Tax Compliance?
Understanding Indonesian tax regulations can be challenging, particularly if your employment, business activities, or tax residency status has changed. Determining whether your NPWP should remain active or be updated to Non-Active Taxpayer status requires careful consideration of the applicable tax rules and your individual circumstances.
At Lets Move Indonesia, our tax specialists assist individuals, expatriates, business owners, and companies with comprehensive tax compliance services, including NPWP registration and updates, tax residency assessments, annual tax reporting, corporate tax compliance, and ongoing tax advisory.
Speak with our consultants today and claim your complimentary one-hour consultation. Stay updated and stay compliant with Indonesia’s latest immigration and business regulations with Lets Move Indonesia.
