For weeks now I have been trying to find out if retirement visa has to pay the new draconian fiskal tax. My visa lady doesn't know and the tax people she consulted are unsure. Another visa agent said yes you do because you have a kitas and anybody with a kitas has to pay. He also said if I applied for a tax number, not only would I have to fill out an income tax form written in Indonesian once a year, I would also have to report my social security retirement income from America and that I would have to pay tax on that. If I have to pay $500 USD every time my wife and I leave the country, that means my wife and I will be paying $300 month for retirement visas, re-entry permits, police reports, fiskal taxes, airport taxes and whatever god-awful surprises sprung on us in the middle of the night without warning. I am just an ole retired professor and we are not rich. A retirement visa is not allowed to work and make money here so the idea of having a tax number is kind of ridiculous, insensitive and impolite. Does anyone have any clarity on this? Has anyone left the country on a retirement visa and did you have to pay the 2.5 million fiskal tax? Thank you for helping.
Retirement Visa - Fiskal
- Thread starter Dr Deepak
- Start date
Dr deepak
I appreciate your concern but if you look in recent archives and even ongoing topics there is much on the subject that you might want to look at. I believe you can get a NPWP even on a retirement visa. Although you are not allowed to work you can have an income that may be taxable and you should be able to get an exemption certificate for fiscal.
I have never heard of a case where retiree's have had to pay tax on their retirement income but is is feasible. You do not have to fill in lots of tax forms to get the NPWP. One thing I know for sure is that without the NPWP as a Kitas holder you will have to pay fiscal if you do not have one.
I appreciate your concern but if you look in recent archives and even ongoing topics there is much on the subject that you might want to look at. I believe you can get a NPWP even on a retirement visa. Although you are not allowed to work you can have an income that may be taxable and you should be able to get an exemption certificate for fiscal.
I have never heard of a case where retiree's have had to pay tax on their retirement income but is is feasible. You do not have to fill in lots of tax forms to get the NPWP. One thing I know for sure is that without the NPWP as a Kitas holder you will have to pay fiscal if you do not have one.
You will also likely find that if your Social Security is taxed already (I'm not sure if they do that in the US) then, pursuant to the agreements made with most foreign governments, you cannot be taxed twice on it. That is certainly the deal with NZ income.
There is discussion already in the Forum about the Fiskal Tax but most of it is just a repeat of what was said in the newspapers and almost none of it was specific to retirement visa. That is why this is a separate thread. When it came time to re-new our retirement visa last October, we seriously thought about getting a '6 month' social visa instead. On the surface, it looked like it would have been cheaper. We ended up re-newing the retirement visa because the kitas had advantages of medical 'discount', the right to open a bank account, the right to have a driver's license, the right to stay in Bali without having to leave before six months, etc. We made the wrong choice. If the government had given any advance notice about this 5 million tax (for a couple), we would have chosen a social visa instead.
I will not get a Tax Number. On a retirement visa, it is incorrect, inappropriate and insane. Governments and societies have personalities just like people do. I am a psychologist and the thinking behind this tax on old retired people is diagnosable. If they are capable of doing something like this, then they are capable of doing anything. Anything at any time. Yes, getting a tax number is easy. But what happens after that? Filling out x number of pages of income tax forms written in another language is just the beginning. After everybody is on the list, the next step is to enforce all the requirements and fine print. Any reader here has any kind of faith in their methods of enforcement? No thanks. I have nothing to hide, but I don't have enough lifetime left to prove and document that I have nothing to hide. I suspect that those who have rushed down to get a tax number are in for an unpleasant surprise.
I will not get a Tax Number. On a retirement visa, it is incorrect, inappropriate and insane. Governments and societies have personalities just like people do. I am a psychologist and the thinking behind this tax on old retired people is diagnosable. If they are capable of doing something like this, then they are capable of doing anything. Anything at any time. Yes, getting a tax number is easy. But what happens after that? Filling out x number of pages of income tax forms written in another language is just the beginning. After everybody is on the list, the next step is to enforce all the requirements and fine print. Any reader here has any kind of faith in their methods of enforcement? No thanks. I have nothing to hide, but I don't have enough lifetime left to prove and document that I have nothing to hide. I suspect that those who have rushed down to get a tax number are in for an unpleasant surprise.
Many of the clinics here, like SOS & Kasih Ibu (my experiences) give you a discount if you are on a Kitas.
At Kasih Ibu (Jimbaran) a consultation with a general Doctor costs Rp20,000 for a local, Rp250,000 for a KITAS holder & Rp500,000 for a foreigner without KITAS!
There is a simialr pricing structure for treatments, rooms etc. My room in Kasih Ibu this month cost me 1.6 million per night (KITAS price) It was the most expensive room because all the others were full.
At Kasih Ibu (Jimbaran) a consultation with a general Doctor costs Rp20,000 for a local, Rp250,000 for a KITAS holder & Rp500,000 for a foreigner without KITAS!
There is a simialr pricing structure for treatments, rooms etc. My room in Kasih Ibu this month cost me 1.6 million per night (KITAS price) It was the most expensive room because all the others were full.
Dr Deepak said:
I don't quite follow your logic Dr Deepak, maybe things are different in the US, but where I come from everyone is taxed depending on their income - it makes no difference if you are a child, an adult, or a retired person. If you have income, you pay tax on it, including income from social security. So here, everyone has a tax number. What is different with having a tax number in Indonesia if you are living there as well as your home country tax number? What is inappropriate about complying with the same rules as everyone else? Why is a person eligible for a retirement visa any different from a person who does not fit the criteria for that visa? You have chosen to live in a foreign country, there are certain aspects of living abroad that are a pain, old or not.
The reason that countries have recripocal tax agreements is to ensure that you do not have to pay tax twice. The reason there are tax accountants is to fill out the tax forms for you.
I can't imagine how it would be workable to exclude a certain section of expats on a particular visa from the general rules for taxation. We certainly don't in Australia and I think you will find that they don't in the USA either (for expats living in the US) whether they are old or not.
A Retirement Visa is not allowed to work or earn money in Indonesia. Therefore, why is a Tax Number required to pay tax on income which cannot be earned? They sprung this surprise without taking retirement visas into consideration or else they plan to begin taxing the retirement pensions of foreigners. It is not true that I am protected because of the policy of no 'double taxation'. In the USA, my pension is so small that I do not even have to file a tax return. Here, if a person makes 1 million a month, they are liable for tax. This is what I pay my pembantu. I do not see the right that Indonesia has to tax the pension I started paying into 50 years ago in another country. Nor was it ever explained to me that by paying $200 USD month for the privilege to live here that I would also have to pay tax on my retirement income or any other income I make in another country. I strongly object.
For those thinking of pursuing a Tax Number, some practical information from Bali IDE is that it cost 200,000 to get the number (before March '09) and 2.5 million for them to file a monthly/annual report. What the Taxation Dept. does with the report is unknown.
For those thinking of pursuing a Tax Number, some practical information from Bali IDE is that it cost 200,000 to get the number (before March '09) and 2.5 million for them to file a monthly/annual report. What the Taxation Dept. does with the report is unknown.
Not true or at least the second part is not. I have a savings account which I use to bring money into Indonesia. The savings account earns interest on which tax is taken off at source. I therefore earn money and pay tax on it.
If your pension is paid elsewhere it will have to be brought into the country and is therefore income. If you pay tax where it originates then you will not have to pay tax here..simple but you will still be able to get a fiskal exemption. I am sorry you do not like it and can appreciate that it is a problem but if you can afford to pay your pembantu a million a month you cannot be that poor.
Unless you are living entirely on savings, and you don't get any interest on those savings, then you have income. Income may include a pension or annuity, rent received from a property you own, interest earned on bank accounts, dividends on shares, etc, etc, earned anywhere in the world.
Technically, all your income has been subject to tax assessment right from when you got your first visa - Soc. Bud. or KITAS, and from what I have read on another expat website, under the law you are required to register for tax with potential jail terms if you don't. It makes no difference where the income comes from - Indonensia or the USA.
There has been no rule change - since 1984 you have been required to have a NPWP and to file a tax return. Even if you have a KITAS as a retiree, even if you are on a social visa and reside in Indonesia for more than 183 days - there are a bunch of tests as to what 'reside' means, but if you have a long term contract on a house and employ a maid you meet the test.
However, up until now, that rule has not been enforced. The difference is that now it is beginning to be enforced.
All that being said, I certainly would not be running out to get a NPWP if I was still living in Indonesia, not until it becomes a lot clearer as to what the ramifications are for expats who are not working in Indonesia but living there and not working. I agree that those who have raced out and registered just to save on fiskal exit tax could be in for a real headache.
There are other ways to avoid or reduce fiskal if it is that important, for example - fly out to Penang from Medan - no fiskal. There are also reductions on fiscal when going from Batam to Singapore by boat.
I think your best bet is to lay low, cough up the fiskal when you fly out or look into some of the cheaper ways as above. For low income retirees like yourself, trying to have a better retirement than what would be available back home on the same income, it is best to bide your time a bit and see what happens.
Technically, all your income has been subject to tax assessment right from when you got your first visa - Soc. Bud. or KITAS, and from what I have read on another expat website, under the law you are required to register for tax with potential jail terms if you don't. It makes no difference where the income comes from - Indonensia or the USA.
There has been no rule change - since 1984 you have been required to have a NPWP and to file a tax return. Even if you have a KITAS as a retiree, even if you are on a social visa and reside in Indonesia for more than 183 days - there are a bunch of tests as to what 'reside' means, but if you have a long term contract on a house and employ a maid you meet the test.
However, up until now, that rule has not been enforced. The difference is that now it is beginning to be enforced.
All that being said, I certainly would not be running out to get a NPWP if I was still living in Indonesia, not until it becomes a lot clearer as to what the ramifications are for expats who are not working in Indonesia but living there and not working. I agree that those who have raced out and registered just to save on fiskal exit tax could be in for a real headache.
There are other ways to avoid or reduce fiskal if it is that important, for example - fly out to Penang from Medan - no fiskal. There are also reductions on fiscal when going from Batam to Singapore by boat.
I think your best bet is to lay low, cough up the fiskal when you fly out or look into some of the cheaper ways as above. For low income retirees like yourself, trying to have a better retirement than what would be available back home on the same income, it is best to bide your time a bit and see what happens.
Absolutely marvelous letter FreoGirl with brilliant clarity and chockful of practical information I have been looking for. My sincere thanks to you very much.
I am in kind of shock about all of this. No one told us we would be incurring all-of-this. The visa agent didn't tell us. The visa website doesn't say this. My neighbor has a retirement visa and she didn't mention it (if she knows). We were just looking for a quiet and peaceful place to live where it wouldn't cost too much and we wouldn't be bothered. It has me kind of nervous actually now. How many other laws and regulations are out there that I (or anyone else) dont know about? I have a feeling this fiskal thing is just the tip of the iceberg.
We just paid for a year's rent on the most beautiful little house in a garden I have ever lived in and we just re-newed another year's retirement visas and re-entry permits. We just spent 120 million on furnishings and remodeling so the house is in perfect shape. Too bad. I have already advertised that if someone buys the furnishings, they can assume the rent. Then we ship 30 boxes of books and personals back to where we came from and start all over again.
I am going to miss the Balinese. They are the most unique and lovable people I have ever met.
I am in kind of shock about all of this. No one told us we would be incurring all-of-this. The visa agent didn't tell us. The visa website doesn't say this. My neighbor has a retirement visa and she didn't mention it (if she knows). We were just looking for a quiet and peaceful place to live where it wouldn't cost too much and we wouldn't be bothered. It has me kind of nervous actually now. How many other laws and regulations are out there that I (or anyone else) dont know about? I have a feeling this fiskal thing is just the tip of the iceberg.
We just paid for a year's rent on the most beautiful little house in a garden I have ever lived in and we just re-newed another year's retirement visas and re-entry permits. We just spent 120 million on furnishings and remodeling so the house is in perfect shape. Too bad. I have already advertised that if someone buys the furnishings, they can assume the rent. Then we ship 30 boxes of books and personals back to where we came from and start all over again.
I am going to miss the Balinese. They are the most unique and lovable people I have ever met.
Dr Deepak
Your rush to judgement and jumping to conclusions is not doing you any favors. Labelling the Indonesian government insensitive and impolite, diagnosably insane and capable of doing any wrong against you says more about you than it does about Indonesia.
Had you put your research skills to good use, assuming you really are a professor, you would have typed "indonesian united states social security tax" into Google and there you find the very first entry is a link to the document Tax Convention with the Republic of Indonesia.
Article 22 of this tax treaty states in part:
FreoGirl's advice:
Furthermore if you want to apply for a NPWP you simply need to submit nil returns. If you can't understand the forms then get advice for the first one and copy the subsequent ones yourself.
If that is too much trouble for you then pay the Fiskal Tax and quit moaning. Really you come to Indonesia to have a nice lifestyle on the cheap and then have the audacity to round on the government for what amounts to it being fiscally responsible. Your "watch out those nasty Indonesians are coming to get you in the night" attitude is all too common amongst expats <MOD EDIT> it seems.
As for abandoning your house, packing up and going home over a few hundred dollars, itself based on false assumptions, <MOD EDIT>
Your rush to judgement and jumping to conclusions is not doing you any favors. Labelling the Indonesian government insensitive and impolite, diagnosably insane and capable of doing any wrong against you says more about you than it does about Indonesia.
Had you put your research skills to good use, assuming you really are a professor, you would have typed "indonesian united states social security tax" into Google and there you find the very first entry is a link to the document Tax Convention with the Republic of Indonesia.
Article 22 of this tax treaty states in part:
FreoGirl's advice:
is wrong and why she believes she is capable of offering such advice is beyond me. I have been advised by one of my colleagues here at the World Bank that you do not need to declare this income in Indonesia because it is not taxable.
Furthermore if you want to apply for a NPWP you simply need to submit nil returns. If you can't understand the forms then get advice for the first one and copy the subsequent ones yourself.
If that is too much trouble for you then pay the Fiskal Tax and quit moaning. Really you come to Indonesia to have a nice lifestyle on the cheap and then have the audacity to round on the government for what amounts to it being fiscally responsible. Your "watch out those nasty Indonesians are coming to get you in the night" attitude is all too common amongst expats <MOD EDIT> it seems.
As for abandoning your house, packing up and going home over a few hundred dollars, itself based on false assumptions, <MOD EDIT>
Bit of a harsh reply Bambang. Indonesia invites retirees to come here and makes strict rules for them to do so to the benefit of Indonesia. Dr Deepack maybe wrong but it can be frightening for many when things beyond their control or understanding are introduced.
Without passing comment others on this thread have stated how various tax offices do not know how to apply the tax laws or take advantage of their position to extract monies to give what should be free. I love Indonesia and its people but one cannot live here and be blind to the failings that it has.
The secret is to research all or get advice from those that know so please cut a little slack to someone who does not know. The purpose of this forum is to help and give advice
Aku begini Enkau begitu sama saja Ya
Without passing comment others on this thread have stated how various tax offices do not know how to apply the tax laws or take advantage of their position to extract monies to give what should be free. I love Indonesia and its people but one cannot live here and be blind to the failings that it has.
The secret is to research all or get advice from those that know so please cut a little slack to someone who does not know. The purpose of this forum is to help and give advice
Aku begini Enkau begitu sama saja Ya
Harsh? Yes, probably but it is not my intention to be unkind for the sake of it, rather as a wake up call to those who should know better.
It is all very well for people to ask innocent questions, to make inquiries in good faith, but to load a question with accusations such as "god-awful surprises sprung on us in the middle of the night without warning", to frame the question as an injustice done to them by Indonesia before having all the facts is unfair to Indonesians.
To throw away a years rent, pay for relocation costs, not make use of renewed visas etc is surely going to add up to tens of thousands of dollars. All to save a few hundred dollars depending on whether or not one has an NPWP and how many overseas trips one is planning between now and 2011. Surely "just an ole retired professor" living of social security won't be jetsetting around the world. The English idiom "to cut off one's nose to spite one's face" comes to mind.
Reading through some of your posts Jimbo I think there is little we would disagree on. Where we differ is that I believe you are too kind.
Iya, elu elu, gue gue.
It is all very well for people to ask innocent questions, to make inquiries in good faith, but to load a question with accusations such as "god-awful surprises sprung on us in the middle of the night without warning", to frame the question as an injustice done to them by Indonesia before having all the facts is unfair to Indonesians.
To throw away a years rent, pay for relocation costs, not make use of renewed visas etc is surely going to add up to tens of thousands of dollars. All to save a few hundred dollars depending on whether or not one has an NPWP and how many overseas trips one is planning between now and 2011. Surely "just an ole retired professor" living of social security won't be jetsetting around the world. The English idiom "to cut off one's nose to spite one's face" comes to mind.
Reading through some of your posts Jimbo I think there is little we would disagree on. Where we differ is that I believe you are too kind.
Iya, elu elu, gue gue.
Allow me to interject a different perspective.
I fly all over the world professionally and I find increasingly that countires in South/Central America and in Asia Thailand, Malaysia, Philippines) have recognised the opportunity to benefit from encouraging retired persons to settle in their countries brings. Many of these countries have well planned and well funded advertising campaigns in support of such objectives because retired persons do not take jobs away from locals, employ local people and put money into the local economy. Most of these schemes guarantee tax free residency and, as such, are unequivocal in their warm welcome of these persons, in support of a carefully thought through objective.
Conversely, as usual, Indonesia is a day late and a dollar short. Indonesia, in general, seems to be most equivocal in its receptivity towards foreigners in all situations. In this particular case, I believe, however, that the problems expressed in this thread are probably more as a result of no strategy, no thinking, no planning and no coordination between GOI Departments. As usual.
It is correct that the Indonesian tax code mandates taxation on worldwide income, although this has never actually been pursued, probably beause of the difficulty in tracing offshore income. Should the Indonesian tax authorities have decided to pursue this avenue, that would have/will start with US citizens who also have to pay taxes on worldwide income and must submit an annual tax return declaring worldwide taxable income (IRS Form 1040).
So I believe that this is not primarily a tax issue but just another case of Indonesia's total lack od addressing the strategic issue in enough detail to implement a sensible policy regarding retirees, mixed in with the usual latent post-colonial xenophobia.
As usual, Indonesia will loose out to other countries who have thought things through in an organised way and have sensible policies in place to compete in what is a growing global market.
Sorry but arguing about the rights and wrongs of tax policy and KITAS/Fiscal policy from either Nationalistic or other narrow-minded self-interests misses the big picture.
Small picture, at present, for retirees Retirement Visas require payment of the new higher Fiscal (Although only for another 2 years). The (Unpalatable and unreasonable) alternative is get an NPWP and risk the potential implications of a worldwide taxation policy or vote with your feet and go and spend your money in a country with more welcoming policies. For GOI, make your mind up.
I fly all over the world professionally and I find increasingly that countires in South/Central America and in Asia Thailand, Malaysia, Philippines) have recognised the opportunity to benefit from encouraging retired persons to settle in their countries brings. Many of these countries have well planned and well funded advertising campaigns in support of such objectives because retired persons do not take jobs away from locals, employ local people and put money into the local economy. Most of these schemes guarantee tax free residency and, as such, are unequivocal in their warm welcome of these persons, in support of a carefully thought through objective.
Conversely, as usual, Indonesia is a day late and a dollar short. Indonesia, in general, seems to be most equivocal in its receptivity towards foreigners in all situations. In this particular case, I believe, however, that the problems expressed in this thread are probably more as a result of no strategy, no thinking, no planning and no coordination between GOI Departments. As usual.
It is correct that the Indonesian tax code mandates taxation on worldwide income, although this has never actually been pursued, probably beause of the difficulty in tracing offshore income. Should the Indonesian tax authorities have decided to pursue this avenue, that would have/will start with US citizens who also have to pay taxes on worldwide income and must submit an annual tax return declaring worldwide taxable income (IRS Form 1040).
So I believe that this is not primarily a tax issue but just another case of Indonesia's total lack od addressing the strategic issue in enough detail to implement a sensible policy regarding retirees, mixed in with the usual latent post-colonial xenophobia.
As usual, Indonesia will loose out to other countries who have thought things through in an organised way and have sensible policies in place to compete in what is a growing global market.
Sorry but arguing about the rights and wrongs of tax policy and KITAS/Fiscal policy from either Nationalistic or other narrow-minded self-interests misses the big picture.
Small picture, at present, for retirees Retirement Visas require payment of the new higher Fiscal (Although only for another 2 years). The (Unpalatable and unreasonable) alternative is get an NPWP and risk the potential implications of a worldwide taxation policy or vote with your feet and go and spend your money in a country with more welcoming policies. For GOI, make your mind up.
Jimbo maybe too kind and also tooooooooooo kind to you, I will not.
You have joined Bali Pod only on Jan 04 this year
Since then you have been nothing else but a pain in the arse
You have been against anything has been said on this forum, no matter what.
If you have been in UK as you have mentioned, you know that if you take away the letter “a” your name and replace it with “u” = Bum you will know exactly what you are.
Your post has also MOD EDIT so you must have been using bad words against expats.
Educated in UK, USA, all bull shit, your head would not go through a 5 meter opening.
You are <MOD EDIT> by your above statement
Time for you to grow up
You have joined Bali Pod only on Jan 04 this year
Since then you have been nothing else but a pain in the arse
You have been against anything has been said on this forum, no matter what.
If you have been in UK as you have mentioned, you know that if you take away the letter “a” your name and replace it with “u” = Bum you will know exactly what you are.
Your post has also MOD EDIT so you must have been using bad words against expats.
Educated in UK, USA, all bull shit, your head would not go through a 5 meter opening.
You are <MOD EDIT> by your above statement
Time for you to grow up
Dr Deepak
"Labelling the Indonesian government insensitive and impolite, diagnosably insane and capable of doing any wrong against you says more about you than it does about Indonesia."
Bambang, as much as I appreciate your forthrightness, please do not put words like this into my mouth I did not speak. The words you quote are in reference to this particular policy as applied to retirement visas. They do not apply to the government, which I am sure is doing the best it can. Individual policies of a government are not the government. In child psychology, it is standard practice to call a 'bad behavior', such as picking your nose, as 'bad', but to make sure the child himself understands that he is not 'bad'. Just as there is a difference between behavior and child, there is a difference between policy and government. I am sympathetic to the government. They have a difficult task of collecting taxes in which is basically a cash economy which does not leave a paper-plastic trail to track.
"Had you put your research skills to good use, assuming you really are a professor, you would have typed "indonesian united states social security tax" into Google"
Yeah, I missed that one. However, I researched in other ways: (1) talking to two visa agents; (2) reading all the posts on this forum; and (3) posting for help from anyone who might know the facts of the case...such as yourself.
Article 22 of this tax treaty states in part:
"Social security payments and similar benefits paid out of public funds by one of the Contracting States to an individual who is a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned Contracting State."
Since I am American on social security, that answers one question for me personally. Thank you. However, note that it says nothing about private pensions. Also note that it applies to Americans only. What about Australian, British, French, Taiwanese, Dutch, Japanese, Russians and the rest of the international community?
FreoGirl's advice: "Technically, all your income has been subject to tax assessment right from when you got your first visa" is wrong and why she believes she is capable of offering such advice is beyond me. I have been advised by one of my colleagues here at the World Bank that you do not need to declare this income in Indonesia because it is not taxable."
If FreoGirl is wrong, are you saying then that retirement visas are NOT subject to tax assessment on any income outside of Indonesia?
Do you mean 'moaning' as in don't show how much it hurts and shocks? Do you mean 'moaning' as in 'shut up and do what you are told'?
Uuuuh, I think you have me mixed up with someone else. I have a 10-year visa to India and the choice of living in the beautiful Manali Valley in the Himalayas for much cheaper than here. I also have a residential permit for Taiwan and it was cheaper to live in a 3BR luxury flat in the capitol city than it is to live here.
What has come out of all of this are the thousands of posts to this forum about uncertainty and confusion about visas and taxes. No one seems to know. It would be nice to have a 'Expat Community Committee' to liason with an officer of the government who can find the answers for us.
It would also be an opportunity for the government to look us in the eyes and heart and not only the pocket. We have more than just money to offer the community. The retirement visas have a wealth of expertise and experience to offer and share. Just be as friendly to us as the people are and let us know how we can help. I, for one, would volunteer as I am sure many others would.
"Labelling the Indonesian government insensitive and impolite, diagnosably insane and capable of doing any wrong against you says more about you than it does about Indonesia."
Bambang, as much as I appreciate your forthrightness, please do not put words like this into my mouth I did not speak. The words you quote are in reference to this particular policy as applied to retirement visas. They do not apply to the government, which I am sure is doing the best it can. Individual policies of a government are not the government. In child psychology, it is standard practice to call a 'bad behavior', such as picking your nose, as 'bad', but to make sure the child himself understands that he is not 'bad'. Just as there is a difference between behavior and child, there is a difference between policy and government. I am sympathetic to the government. They have a difficult task of collecting taxes in which is basically a cash economy which does not leave a paper-plastic trail to track.
"Had you put your research skills to good use, assuming you really are a professor, you would have typed "indonesian united states social security tax" into Google"
Yeah, I missed that one. However, I researched in other ways: (1) talking to two visa agents; (2) reading all the posts on this forum; and (3) posting for help from anyone who might know the facts of the case...such as yourself.
Article 22 of this tax treaty states in part:
"Social security payments and similar benefits paid out of public funds by one of the Contracting States to an individual who is a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned Contracting State."
Since I am American on social security, that answers one question for me personally. Thank you. However, note that it says nothing about private pensions. Also note that it applies to Americans only. What about Australian, British, French, Taiwanese, Dutch, Japanese, Russians and the rest of the international community?
FreoGirl's advice: "Technically, all your income has been subject to tax assessment right from when you got your first visa" is wrong and why she believes she is capable of offering such advice is beyond me. I have been advised by one of my colleagues here at the World Bank that you do not need to declare this income in Indonesia because it is not taxable."
If FreoGirl is wrong, are you saying then that retirement visas are NOT subject to tax assessment on any income outside of Indonesia?
Do you mean 'moaning' as in don't show how much it hurts and shocks? Do you mean 'moaning' as in 'shut up and do what you are told'?
Uuuuh, I think you have me mixed up with someone else. I have a 10-year visa to India and the choice of living in the beautiful Manali Valley in the Himalayas for much cheaper than here. I also have a residential permit for Taiwan and it was cheaper to live in a 3BR luxury flat in the capitol city than it is to live here.
What has come out of all of this are the thousands of posts to this forum about uncertainty and confusion about visas and taxes. No one seems to know. It would be nice to have a 'Expat Community Committee' to liason with an officer of the government who can find the answers for us.
It would also be an opportunity for the government to look us in the eyes and heart and not only the pocket. We have more than just money to offer the community. The retirement visas have a wealth of expertise and experience to offer and share. Just be as friendly to us as the people are and let us know how we can help. I, for one, would volunteer as I am sure many others would.
For those expats that have been avoiding tax and do not want to come clean yes better to skip off to one of those countires like Thailand or Malaysia because once the current sunset policy is over and you are caught avoiding tax you might be spending time in Kerebokan gaol.sydneymike said:
I don't agree that Indonesia is Xenophobic for taxing overseas income, many/most countries do that nor do I believe tax should be avoided by running off to another country. As for your opinion that it is another case of Indonesia's total lack of addressing strategic issues well it is hardly a strategic issue and in any case I believe the policy is plain enough and Indonesia has managed to enter into double tax treaties with more 50 or so countries.
If anyone has the need for further assistance they should seek the services of a tax accountant rather than relying on a visa agent or anonymous internet forums. International tax matters, after all, can be quite, well, taxing!
Lumumba I don't know what has upset you so much that you need to respond in such a rude manner. Watch out for those mod edits though - they're catching. :lol:
Since you didn’t get it the first time :roll: here is once again.
Jimbo, as a gentleman, put it to you:
The way you‘ve replied to Dr Deepak. You have been rude and also very cocky so you deserve to get the same treatment or worse.
If you like to give “advice” do it without any stupid remarks.
The expats, after all, they are bringing money into the country, especially the one the retirement visa, they are NOT taking money away from here.
I hope you’ll get it because I will not repeat myself again.
Jimbo, as a gentleman, put it to you:
The way you‘ve replied to Dr Deepak. You have been rude and also very cocky so you deserve to get the same treatment or worse.
If you like to give “advice” do it without any stupid remarks.
The expats, after all, they are bringing money into the country, especially the one the retirement visa, they are NOT taking money away from here.
I hope you’ll get it because I will not repeat myself again.
You extrapolated the behaviour to any action of the government and since incorporating any or all behaviour would constitute the entity itself I fail to see how I am putting words in your mouth.Dr Deepak said:
In any case your individual/personal gripe and contingent criticisms have been rendered moot. Now you are moving on to general criticisms about other overseas income being taxable. Many/most other countries do that and indeed Indonesia has tax treaties with 50 or so countries most of which, I would hazard a guess without bothering to go and read them all, would cover private pension payments and therefore, I would say, do not offer tax free residency.
FreoGirl was wrong to assume that all income must be assessed since some income types, as in the case of your socal security payments, are not reportable items. The tax law on overseas income has not changed and it is incumbent on you to make yourself aware of tax laws that applicable to your circumstances by consulting a tax accountant preferably before you invest tens of thousands of dollars moving to a foreign country.
Spraying cricism on Indonesia for a mess of your own making is hardly fair to Indonesia especially since you never took the obvious and reasonable steps to inform yourself rather than limiting yourself to internet chat sites and unqualified visa agents. I said "moaning" because you are quibbling about a few hundred dollars and this from someone who has had a life and advantages far above what the avergae Indonesian would probably dare to dream about on their $2/day income. You are lacking in perspective.
The overriding question of whether or not retiress should have overseas income taxed by Indonesia is debatable. Indonesia has a policy of taxing that income and that hasn't changed. Perhaps they don't believe foreigners should be able to waltz into Indonesia, avoid tax in their home countries and make full use Indonesia's infrastructure and goverment services without paying their fair share.
If you believe you will get a better deal, a better lifestyle and there is more regulatory certainty in Malaysia, Thailand or the the Philippines then good luck to you.
lumumba: jangan panas ya? :lol: