jolyon_wagg

New Member
Oct 17, 2011
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Hi, I have been researching Indonesian Tax law and found some info at pajak dot net (sorry the forum won't allow me to post links as a newbie.)

this bit was of particular interest:

"Indonesian resident taxpayers are subject to tax on worldwide income. Nonresidents are subject to tax on Indonesian-source income, only. Individuals are considered resident if they reside in Indonesia; if they are present in Indonesia for more than 183 days within a 12 month period"

Does this mean that, if I was to move to Indonesia and rent out my apartment at home, I would be required to pay tax on the rental income twice. Once to the Indo government and once to my home government?
 

gilbert de jong

Active Member
Jan 20, 2009
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Panji, Singaraja.
no, you don't pay twice...legally speaking you would have to declare it at the indo tax office, but they won't make you pay any tax on income from abroad...
since you would pay tax on it abroad. Same goes for income made in Indo, you would have to declare it abroad but don't pay tax abroad.
 

Fred2

Well-Known Member
Oct 13, 2010
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Surabaya/Australia
depends on if you pay tax in your home country?
you just fill out a tax form once a year if you are on a kitas visa & enter no income from Indonesia.
if you are on a sobud visa you must exit every 180 days.
 

Mark

Well-Known Member
Apr 19, 2004
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As a technical matter yes, you would have to pay tax on this income twice, unless your home country has a tax treaty with Indonesia that covers avoidance of double taxation (in which case you would only pay tax to the country where the income is earned). As a practical matter, the Indonesian tax authorities will not know about your overseas rental income unless you declare it. They would, however, be within their rights to query the source of any funds you remit to yourself in Indonesia from abroad to determine whether it is generated by an 'income activity' like work or investments or is simply savings. Very unlikely to happen though.
 
Sep 20, 2011
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Australia
Mark is correct.

It would depend on if your home country has a double tax agreement with Indonesia.

For example, Australia and Indonesia have a double tax agreement in place see the following link for more info: www dot ato dot gov dot au/businesses/content.aspx?doc=/content/59547.htm
 

gilbert de jong

Active Member
Jan 20, 2009
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Panji, Singaraja.
nah...any income you make here in Indonesia, you just pay incometax on that here.
and if there is any income abroad (USA) you still file your taxes in the US for that.
 

Teabag

Member
May 23, 2013
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Update on this because of the new automatic exchange of information.

Penandatanganan Multilateral Competent Authority Agreement | Kementerian Keuangan RI | Ministry of Finance of Republic of Indonesia

I know, it depends on your home country and if it has a double taxation agreement, but I think, this new exchange will affect a lot of retired people in Indonesia. For instance, if I want to retire in Indo in a couple of years and I get income from rentet out propperty and also some small pension payments. For sure, I pay tax in my home country for that, no question, the main problem is, the tax RATE in Indo is a lot higher then here in Switzerland, so I guess, I'll have to pay the difference to the indo pajak.

Technically, this will be a nightmare !! Lets do a simple counting: income in a year is 20k. Here in Swiss, I'm gona pay lets say 10% so 2k to the Swiss Tax. Indo has a rate of approx. 30%, so the difference is 4k, which i would then have to pay to the indo pajak.

So can some one tell me how you yould explain that to the 'pak pajak' ? Do they know the double taxation agreement ? Anyone in the same situation with REAL experiance ??

PM's are welcome too.....

Cheers
Teabag
 
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davita

Well-Known Member
Mar 13, 2012
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Re; Post # 11

I think you are worrying yourself too much.
It may be law for all foreigners who reside in Indonesia for more than 6 months to submit an Nomor Pokok Wajib Pajak (NPWP) but I don't know anyone on a retirement Kitas/Kitap do that, unless receiving an income in Indonesia.
I asked my agent and he said..."don't stir the pot." I took that to mean keep quiet.

The above link is so Indonesia can go after all those Indonesians who hide money in places like Singapore...and why they have created an amnesty for those funds to be repatriated and invested in Indonesia.
 

Teabag

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May 23, 2013
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[MENTION=11670]davita[/MENTION]

Yes, I'm maybe worrying myself too much... its a Swiss characteristic, but isn't it now usual, that daily life things are connected to the existence of a NPWP number ? Like, open a bank account, get a plate for your motorcycle and so on ? So finally you end up with a NPWP and then you'll have to fill the tax declaration yearly and if you file a blank zero you might go into trouble.

OK, I agree, they are not gona hunt the people with small income, but theoretically, they have you by the balls to make your life hard in Indo. Like they threaten you for deportation because of wrong tax declaration or ask for some 'uang rokok'.

Am I too worried ??

Regards
 

davita

Well-Known Member
Mar 13, 2012
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I think you shouldn't worry over this. Many retirees have lived without an NPWP. I have a bank account in HSBC, own a car and have a nominee arrangement for 2 properties without an NPWP....as a Kitap/KTP are better forms of ID.
I think if wanting to do business, or being employed, might require to have a NPWP....but a retirement visa is sponsored by an agent so they are responsible for your stay in RI.
If they started to apply the rules, as you suggest, there would be a big exodus and many Indonesians would end-up unemployed...witness what is already happening with the exodus of those in the Oil/Gas jobs. Properties in places like Pondok Indah/Kemang are now renting at a big discount to a year ago. Maids and drivers are looking for jobs and expat oriented businesses are in decline.
 

davita

Well-Known Member
Mar 13, 2012
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I should add that, without an NPWP, if you have a fixed deposit in the bank in IDR there will be a withholding tax of 20% of the interest accrued. If a foreigner has an NPWP it is possible to have that 20% reduced by filing total NPWP but I don't bother...just let them take the 20% and keep quiet.
 

Mark

Well-Known Member
Apr 19, 2004
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I actually had this discussion recently with my banker in Singapore. He cautioned that there absolutely will be information exchanged amongst the signatory countries and that his bank (Julius Baer) would report to Indonesia the assets and income of bank clients who are resident of Indonesia. In fact, he has several European clients resident in Indonesia who are receiving both investment and pension income from outside Indonesia - these people by law have to declare the income in Indonesia though they are not currently doing so. The next question is one of tax liability. If the income is earned and taxes paid in a country with which Indonesia has a tax treaty, then no or at least less tax would likely be due in Indonesia. However, in the case of tax free income in the source country (e.g., Singapore, where there is no tax on interest income or investment dividends), then by all means this would need to be declared and taxes paid in Indonesia. Davita's comments mainly refer to enforcement and in the short to medium term going after expat residents is probably not so likely. Long term (5-10 years from now) my suggestion is to plan on it. After all, with a country with such a poor track of tax collection, a large need for additional tax revenues and organisations like the IMF waiting to help out with computer systems and enforcement techniques etc., it is only a matter of time before foreign residents (especially on ITAS/ITAP) will have to explain how they support themselves financially and why they are not filing and paying taxes on their income.
 
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davita

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Mar 13, 2012
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Mark @ post #17
Thanks for your interesting take from Singapore...that is where the Indonesian Gov't is focussing all its rationale about repatriating the money that Indonesian Nationals park there....must be in the billions USD.

No-one can foretell the future but if Indonesia wishes to lure more long-term tourists and entrepreneurs, as they have indicated many times, they will have to provide an incentive...not a message of 'come here and we'll tax the crap out of you but give you no benefits from taxation.'

Something like the MM2H Visa where the Malaysians don't tax on offshore income might be a good example for Indonesia. To get an MM2H it is simply necessary to fix a deposit, liened to the Gov't, of either MYR300,000 or 150,000 depending on age. That can amount to considerable foreign exchange and guaranteed bank deposits to the Treasury Dept.
 

ronb

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Aug 14, 2007
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Ubud, Bali
Some years back, if you had an NPWP you avoided paying the fiskal tax when leaving the country. This was a tax only to KITAS/KITAP holders or citizens. So I had one then. They stopped fiskal because of some ASEAN agreement so I have no attempt to keep my NPWP current.
 

davita

Well-Known Member
Mar 13, 2012
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Correction to my post #16
The 20% tax on interest from an IDR bank account is standard and in addition to any other taxes. I initially thought it was only withheld until taxes were filed....but I'm wrong.

ronb is correct. They cancelled Fiskal (was supposed to go to IDR2.5M) and shows how fractured this Indonesian taxation is and how many citizens don't pay their share. It's also a requirement to disclose assets but many, even in government, refuse to do that.

Further to my previous post I've just seen that over US$30 million has already been repatriated to Indonesia under this new amnesty for tax scheme.
 
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