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Indonesia Tax System Guide
Everything you need to know about taxation in Indonesia — corporate rates, individual brackets, VAT, MSME incentives, and tax holiday programs for investors.
Corporate Tax Rate
22%
VAT Rate
11%
Top Individual Rate
35%
Corporate Tax
The standard corporate income tax rate is 22%. Publicly listed companies meeting certain requirements (at least 40% free float and 300+ shareholders) receive a 3% discount, resulting in a 19% rate. Micro, small, and medium enterprises (MSMEs) with gross revenue up to IDR 4.8 billion per year may elect to pay 0.5% final income tax on gross revenue. Companies with gross revenue up to IDR 50 billion receive a 50% rate reduction on a proportional basis.
Individual Income Tax Brackets
| Income Range (Rp) | Rate |
|---|---|
| Rp0 — Rp60,000,000 | 5% |
| Rp60,000,001 — Rp250,000,000 | 15% |
| Rp250,000,001 — Rp500,000,000 | 25% |
| Rp500,000,001 — Rp5,000,000,000 | 30% |
| Rp5,000,000,001+ | 35% |
Capital Gains Tax
Gains from the sale of shares listed on the Indonesian Stock Exchange are subject to a final 0.1% tax on gross transaction value. An additional 0.5% final tax applies to founder shares. For unlisted shares and other capital assets, gains are included in taxable income and subject to normal progressive rates for individuals or the 22% corporate rate. Land and building transfers are subject to a 2.5% final tax on gross value.
Value Added Tax (PPN)
The standard VAT (PPN) rate is 11% (increased from 10% in April 2022 under the Harmonization of Tax Regulations Law). A 12% rate is planned for January 2025. Essential goods and services including staple food, healthcare, education, social services, and financial services are exempt. Export of goods and certain services is zero-rated. Luxury Sales Tax (PPnBM) of 10-200% applies to luxury goods.
Social Security — ~5% employee / ~10% employer (BPJS)
BPJS Ketenagakerjaan (employment): work accident (0.24-1.74% employer), death (0.3% employer), old-age savings (2% employee + 3.7% employer), pension (1% employee + 2% employer, capped). BPJS Kesehatan (health): 5% of salary (1% employee + 4% employer), capped at IDR 12 million salary. Total employee burden is approximately 5% and employer approximately 10% depending on risk classification.
Withholding Tax Rates
Dividends
20% (reduced by treaty; 0% for domestic corporate recipients meeting requirements)
Interest
20% (reduced by treaty)
Royalties
20% (reduced by treaty)
Filing Deadline
March 31 (individuals) / April 30 (corporate)
Why Businesses Choose Indonesia
- 22% corporate rate with reductions for listed companies (19%) and SMEs
- Final income tax of 0.5% for MSMEs with turnover up to IDR 4.8 billion
- Harmonization of Tax Regulations (HPP) Law reformed tax system from 2022
- 35% top individual income tax rate bracket introduced for income above IDR 5 billion
- Luxury Sales Tax (PPnBM) targets specific luxury items at 10-200%
- Tax Amnesty programs (2016-2017 and 2022) have broadened the tax base
- NIK (national ID) integration with NPWP tax number from 2024
- Tax holidays of up to 20 years for pioneer industry investments above IDR 500 billion
Rates and thresholds last verified: 2025-01. Always confirm with Directorate General of Taxes (DJP — Direktorat Jenderal Pajak) for the most current information.