Individual Income Tax Resident Taxpayer Determination Criteria and Withholding Agents | Indonesian Tax Guide 2025 (9)
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2025-01-17 09:07:33
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This issue's introduction
Resident taxpayer determination criteria and withholding agents
Chapter II Individual Income Tax
Criteria for determining resident taxpayers and withholding agents
An individual who has resided in Indonesia for a cumulative period of more than 183 days in any consecutive 12-month period, or who resides in Indonesia and intends to continue to reside in Indonesia, is considered a resident taxpayer.
(1) Reside in Indonesia, that is:
① Have a permanent residence in Indonesia, that is, a place where one can live or use at any time, whether owned, rented or available for personal use, rather than a place for a stopover;
② Have a center of interest in Indonesia, that is, a place in Indonesia that is used as the center of personal activities, social activities, economic or financial activities or affairs;
③ Have a permanent residence in Indonesia.
(2) The cumulative residence in Indonesia exceeds 183 days in any consecutive 12 months (less than one day is considered as one day);
In a tax year, the individual resides in Indonesia and intends to continue to stay (i.e. the intention to stay can be proved by the following materials: permanent residence permit; limited residence visa with a validity period of more than 183 days; limited residence permit with a validity period of more than 183 days; employment contract, business contract or other activity contract implemented in Indonesia and lasting more than 183 days; other materials that can reflect the intention to reside in Indonesia, such as a lease contract lasting more than 183 days, or materials indicating that the individual has relocated family members in Indonesia).
If the income obtained or earned by a resident individual from within or outside Indonesia exceeds the tax-free amount, the resident individual becomes a resident individual taxpayer.
"Withholding agent" refers to: an employer who pays wages due to labor relations; a government agency that pays wages due to labor relations; an agency that pays pensions due to previous labor relations; an entity that pays remuneration to an individual for services obtained; an individual who pays service fees to other individuals for organizing activities.
The excitement continues in the next issue...