Whether you're heading to Bali for the beaches and remote work life, or Jakarta for career opportunities, Indonesia offers a vibrant lifestyle, rich culture, and a low cost of living.
In this guide, we’ll walk you through everything you need to know about relocating to Indonesia from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Indonesia follows a residence taxation model. If you are resident, you will pay tax worldwide incomes. If you are non-resident, you will pay tax on local incomes only.
if you spend more than 183 days in Indonesia during any 12 month period.
if you intend to reside in Indonesia evidenced by a visa or work contract lasting more than 183 days.
Providing that you are foreign and meet skill requirements, foreign incomes will be exempt from taxation in Indonesian taxation for four tax years. Indonesia can be a very tax efficient place to live for expats & nomads and as such, Global Tax Consulting recommends seeking personalized tax planning advice to take advantage of the special tax regime.
Exempt from Indonesian taxation.
Applied for four years.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in Indonesia, you may find the source country, as a starting point, continues to tax the income which may cause double taxation unless you are using special tax regime.
Double taxation agreements can be used to mitigate double taxation and receive tax free income. As such, the more double taxation agreements a country has, the better, as agreements will ensure you’re not taxed twice and even better, ensure your income is tax free.
At present, Indonesia has 71 double taxation agreements signed.
