Non-resident taxpayer determination criteria, withholding agents and tax collection scope | Indonesian Tax Guide 2025 (16)
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2025-02-06 10:06:15
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This issue's introduction
Scope of tax collection for non-resident taxpayers
Chapter II Individual Income Tax
Criteria for determining non-resident taxpayers and withholding agents
An Indonesian citizen who resides abroad or works abroad for more than 183 days in a consecutive 12-month period and meets one of the following conditions is considered a non-resident:
(1) Permanent residence is abroad;
(2) Center of activity (personal, economic and social relations) is abroad;
(3) Habitual residence is abroad;
(4) Registered as a tax resident abroad (with a permanent residence certificate as evidence);
(5) Obtained a declaration letter issued by the Director of the Taxation Bureau confirming that the citizen of the Republic of Indonesia is a non-resident tax subject.
Scope of tax collection for non-resident taxpayers
Non-resident individuals are subject to a final withholding tax of 20% of their gross income and are not eligible to claim any tax deductions, exemptions or credits.
The withholding tax rates applicable to resident and non-resident individuals are different and for non-resident individuals, the withholding tax is the final tax.
(1) Employment income
Non-resident individuals are subject to final withholding tax on remuneration (including directors’ fees) received in connection with employment in Indonesia.
(2) Business and professional income
If a non-resident resides in Indonesia for less than 183 consecutive days in a 12-month period, his business and professional income is subject to withholding tax.
(3) Investment income
Non-resident individuals are subject to tax on any income derived from Indonesia.
(4) Capital gains
Capital gains derived by non-resident individuals from the sale of shares in an Indonesian non-listed limited liability company may be subject to a final withholding tax of 5%, subject to the provisions of the applicable tax treaty (arrangement).
(5) Other income
Non-resident individuals should assess all income from Indonesia. There are no special tax regulations for income not covered above.
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