Latest Tax Brackets in Indonesia 2023. Looking for the latest tax brackets in Indonesia 2023? Then you are in the right place for your search. As a citizen of Indonesia, one of the most important things you should know is your tax bracket that is in line with your income.Â
It is important that you know how the tax bracket works in Indonesia. Indonesia. levies a tax on its residents on their worldwide income. A non-resident individual is taxed only on Indonesia.-source income, including income received or deemed to be received in Indonesia or deemed to accrue or arise in Indonesia.
What is the income tax rate in Indonesia? What are the taxes in Indonesia? Is tax in Indonesia high?What is Indonesian withholding tax?
In this article, you will get to know the tax brackets in Indonesia, what tax brackets mean, and a whole lot of important updates on the tax brackets in Indonesia.
What is a Tax bracket?
A tax bracket is defined as the range of incomes subject to a certain income tax rate. Tax brackets result in a progressive tax system, in which taxation progressively increases as an individual’s income grows.
Low incomes fall into tax brackets with relatively low-income tax rates, while higher earnings fall into brackets with higher rates.
Tax Brackets in Indonesia
A tax resident is generally taxed on worldwide income, although this may be mitigated by the application of double taxation agreements (DTAs). However, the new Omnibus Law has added a provision to the Income Tax Law stipulating that foreigners who have become domestic tax subjects by reason of becoming tax residents in Indonesia can be taxed only on Indonesian-sourced income (including if paid offshore) if they meet certain skill requirements. This will only be available for the first four years they become tax residents.
This territorial taxation system may not be applicable when the foreigner receives income from overseas and utilizes the applicable tax treaty between Indonesia and the source country. Indonesian citizens that are living outside of Indonesia for more than 183 days in 12 months and meet certain requirements can also be considered foreign tax subjects.
Non-resident individuals are subject to a general withholding tax (WHT) of 20% in respect of their Indonesian-sourced income. Concessions are, however, available where a DTA is in force.
Most income earned by individual tax residents is subject to income tax at the following normal tax rates. The new rates, was effective from January 2022, can be found in the table below
| Taxable Income (IDR*) | Tax Rate (%) |
| Up to IDR 60 million | 5% |
| Over IDR 60 million up to IDR 250 milion | 15% |
| Over IDR 250 million up to IDR 500 million | 25% |
| Over IDR 500 million up to IDR 5 billion | 30% |
| Over IDR 5 billion | 35% |
An individual is regarded as a tax resident if he/she fulfills any of the following conditions:
- He/she is present in Indonesia for more than 183 days in any 12 months period.
- He/she resides in Indonesia.
- He/she is present in Indonesia during a fiscal year and intends to reside in Indonesia.
Note: The provisions of tax treaties may override these rules. Indonesian tax residents are generally taxed on a worldwide income basis. However, foreign citizens may be taxed only on their Indonesian sourced income for the first four years if they fulfill certain requirements. In addition, there is certain overseas income that is not subject to tax in Indonesia.
In Indonesia, the Corporate Income tax rate is a tax collected from companies. Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year. The benchmark we use refers to the highest rate for Corporate Income. Revenues from the Corporate Tax Rate are an important source of income for the government of Indonesia.
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