Tax & International Structuring in Indonesia

Essentials guide · Partly source-checked42% of statements checked against a source7 checked against an official source15 checked against a secondary sourceChecked 2026-10-198 held back until checked against an official source11 topics include AI-written statements, not source-checkedNot yet professionally reviewed

• The standard corporate income tax rate in Indonesia is 22 percent.

  Resident companies and permanent establishments. Listed companies with at least 40 percent public float that meet other conditions pay 19 percent. Companies with turnover up to IDR 50 billion get a 50 percent rate reduction on taxable income attributable to the first IDR 4.8 billion of turnover; businesses with turnover up to IDR 4.8 billion may instead pay 0.5 percent final tax on turnover.PwC Worldwide Tax Summaries · checked 2026-10-19

• Under Finance Minister Regulation 131 of 2024, the VAT rate is 12 percent from 1 January 2025, but for goods and services other than luxury goods the tax base is 11/12 of the price, giving an effective rate of 11 percent.

  The full 12 percent effectively applies to goods subject to luxury-goods sales tax, such as certain motor vehicles, luxury housing, aircraft and yachts; for sales to end consumers the 12 percent effective rate on luxury goods applied from 1 February 2025.Directorate General of Taxes (pajak.go.id) · checked 2026-10-19

• Payments of dividends, interest, royalties and other income to non-residents are subject to 20 percent withholding tax under Article 26 of the Income Tax Law, which may be reduced under an applicable tax treaty.

  Treaty relief requires the recipient to be the beneficial owner and to provide a certificate of domicile in the form required by the tax office, certified by its home tax authority; otherwise 20 percent applies. Some bond interest may qualify for 10 percent.PwC Worldwide Tax Summaries · checked 2026-10-19

• After-tax profits of a permanent establishment are subject to an additional branch profits tax of 20 percent, whether or not remitted, which may be reduced by treaty or exempted if the profits are fully reinvested in Indonesia.

  Permanent establishments of foreign companies. Branch profits are first taxed at the 22 percent corporate rate.PwC Worldwide Tax Summaries · checked 2026-10-19

• Indonesia issued global minimum tax (Pillar Two) rules on 31 December 2024, with an income inclusion rule and a domestic minimum top-up tax applying to periods starting on or after 1 January 2025 and an undertaxed profits rule from 1 January 2026.

  Large multinational groups.PwC Worldwide Tax Summaries · checked 2026-10-19

• Under the Basic Agrarian Law, freehold title (Hak Milik) is reserved for Indonesian citizens; a PT PMA may hold land under derivative rights such as the right to build (HGB), right to cultivate (HGU) and right to use (Hak Pakai).

  Rights are granted for fixed terms and may be extended or renewed.AI-written, not source-checked

• Indonesia offers investment incentives including corporate tax holidays for pioneer industries, tax allowances for specified sectors and regions, and facilities in special economic zones (KEK).

  Eligibility depends on business classification, investment value and location.AI-written, not source-checked

• Halal certification of products in scope is being made mandatory in phases under Government Regulation 42 of 2024, administered by the Halal Product Assurance Agency (BPJPH); the second phase begins in October 2026.

  For example, the deadline for herbal medicines, quasi drugs and health supplements is 17 October 2026, for over-the-counter drugs 17 October 2029 and for prescription drugs (excluding psychotropics) 17 October 2034.Halal Product Assurance Agency (BPJPH) · checked 2026-10-19

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