Individual Tax is for employees who work in the private sector or state-owned companies, as well as employees working for the government.
The individual subjected to pay the Individual Tax must first register to the Directorate General of Tax in order to acquire the Tax ID (NPWP).
The registration will require series of documents to be submitted bearing in mind that you will need to be wary of the frequent changes of the tax regulations in Indonesia.
It is compulsory for the individuals to file the tax report to the Indonesian Tax Authority, which is required by the applicable Indonesian Law.
What is the tax rate for the Individual Tax?
The rate would be as follows:
Taxable Income Tax Rate
First Rp.50.000.000 5%
Between Rp.50.000.000 to Rp.250.000.000 15%
Between RP. 250.000.000 to Rp.500.000.000 25%
Over Rp.500.000.000 30%
When is the deadline to process the Individual Tax to the Tax Authority?
The deadline for the Individual Tax to be processed would be on the 31st March of every year.
What is the consequence if you didn’t make an Individual Tax ID?
You are inclined to be charged with an extra 20% of your tax report. You could also deal with the enforcement authority which could subject to sentences according to the applicable law.
What if you’re leaving Indonesia? What would happen to the obligation of reporting the Individual Tax?
If you’re only leaving Indonesia temporarily, you are still obligated to file the Individual Tax Report. However, if you’re leaving Indonesia permanently, you need to notify the Indonesian Tax Authority regarding your departure and your cancellation of your Tax ID (NPWP).
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Want to know more about taxes in Indonesia? Then check out our useful guide!
If you need to know more or would like us to help with your tax reporting, then contact the LetsMoveIndonesia team.
Our experienced team has years of tax experience and can help with your monthly & yearly tax reporting, individual tax reporting, as well as your payroll and accountancy needs.
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