Retirement Visa - Fiskal

[sydneymike]

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.

Your name is well chosen and I wonder why you have such a hair up your a*s about expats? I am not an expat BTW, living as I do in the chosen land and visiting Bali only for short periods on tourist visas so I have no personal tax issues. I was simply trying to interject the benefit of what I observe travelling the world in a constructive way.

You are, however, as is usual in your posts, ignoring the message to shoot the messenger. Firstly the topic is of RETIREMENT visas, not foreigners avoiding paying taxes whilst working in Indonesia, which should rightly be condemned. Not forgetting, of course, that Indonesians are not without culpability in this respect according to the comparative tax contribution to GDP data.
Secondly, many LDC's have thought this issue through in some detail and have, correctly, identified that the numbers reaching retirement age (The so-called baby boomers) over the next decade do indeed represent a strategic opportunity to benefit local economies without any loss of employment for local people. Policies have therefore been deployed to implement the strategy and to WELCOME such retirees, backed up by focused media campaigns (The Philippines, Costa Rica etc.) These policies are equivocal regarding tax residency.

Should Indonesia not wish to take this route (For whatever reasons, Indonesia is a Sovereign State and fully entitled to make its own decisions) then that's fine. But if Indonesia decides to implement a policy of encouraging retirees, then it has to recognise it is in competition with other countries who are doing it right.

 

[bambang]

Your name is well chosen and I wonder why you have such a hair up your a*s about expats? I am not an expat BTW, living as I do in the chosen land and visiting Bali only for short periods on tourist visas so I have no personal tax issues. I was simply trying to interject the benefit of what I observe travelling the world in a constructive way.

You are, however, as is usual in your posts, ignoring the message to shoot the messenger. Firstly the topic is of RETIREMENT visas

The tax treaties generally cover all income including private and government pensions. Your "shooting the messenger" comment doesn't logically follow in any way and if I have any agenda it is not against expats, I have made acquaintance with many wonderful expats and I too am an expat. It's the carping, ungrateful, woe is me, why don't they just do things better, Indonesia is a basket case type of expat that I have an issue with.

Go and visit some of the other expat sites for the countries you have put up as desirable destinations and you will find the same breed of expat there and If other countries want to be inundated with tax refugees that's their business.

I enjoy your colorful language btw - it's most entertaining. :lol:

 

[sydneymike]

The tax treaties generally cover all income including private and government pensions

That being the case, and it also being the case that in all of the relevant source countries, income of all types is taxed at source, why not just issue retirement visas as other than a KITAS with equivocal tax residence status? The operative word in my earlier posts being WELCOMING retirees. Again, I think you are confusing the type of expats you describe (Down here we call them wingeing poms) and the typical retiree who just wants a quiet life, to be treated with respect and to spend his/her money in Indonesia.

 

[bambang]

That being the case, and it also being the case that in all of the relevant source countries, income of all types is taxed at source, why not just issue retirement visas as other than a KITAS with equivocal tax residence status?

Your assumption is wrong because not all income is completely taxed at source. Interest for example is generally subject to withholding tax usually at around 10-15% and tax treaties also generally allow for partial taxation of private pensions in the non-source state in order to minimise tax avaoidance by crossing borders.

The tax status of expats, whether retirees or not, is unequivocal in the sense that there is a long standing policy that foreign source income can be taxed unless exempt. International tax law is a complex area and you can't blame Indonesia for that. Not to mention the fact that the status "retiree" itself is open to interpretation.

 

[Jimbo]

I thought I would post this link in here which may help if not solve the problems arising out of this discussion especially to do with retirement visa's:

http://www.expat.or.id/info/retirement.html

the second link is for all those other visa type quesions and I would ask that it be placed in a easily noticed/searchable way so that those who ask for such information can have the benefit of someone else's research.


http://www.expat.or.id/info/docs.html

 

[sydneymike]

The tax status of expats, whether retirees or not, is unequivocal in the sense that there is a long standing policy that foreign source income can be taxed unless exempt.

This is going round in circles. I note your view that Indonesia should not grant tax free residence to retirees like many other countires. I disgree because I believe that on balance it would be in Indonesia's own best interests. My view is simply that should Indonesia wish to pursue this opportunity, which you do not believe it should, it needs to be competitive.

I believe that I adequately summarised "The small picture" in my initial post, have acknowledged the tax policy the way it is at present and that retirees will be subject to the new higher fiscal tax for the next 2 years unless in possession of an NPWP. I also noted and agree with your view that if retirees don't like the way things are they should "Vote with their feet" and move elsewhere. This, however, would be a great loss to Indonesia IMHO for the sake of a worldwide taxation policy which, in any case, is not being used?

Bottom line, I disagree with your opinion, as of course is my right. I don't think I can contribute any more to this thread so this will be my last post.

 

[Dr Deepak]

When bambang mentioned his "colleagues at the World Bank", I googled in "world bank indonesia" and found the following article:

http://news.xinhuanet.com/english/2009-01/17/content_10671932.htm

On Jan. 9th or 16th, 2009, just two weeks after the 250% fiskal increase took effect with 3 working days notice, Indonesia received a 110 million USD loan from the World Bank for PINTAR, which is a project to 'stimulate greater tax compliance' and 'increasing the number of tax payers'. It appears then that this fiskal tax-tax number strategy is not originally an Indonesian idea, but is what is called an SAP (structural adjustment policy) required by the World Bank for them to receive the loan.

Further discussions about the controversies surrounding the World Bank, the debt load of Indonesia, the methods and details of future on-going tax collections should be separate threads under separate categories.

While I regret that retired people were not considered in this strategy, the only thing we can do is re-calculate our budget to see if we can afford the added expense or move on. I thought the insights of 'sydneymike' were very positive and constructive. It is true that Indonesia would gain more money by having more retirees live here than by driving some of us away. One does not gain by squeezing blood out of a turnip. One merely ends up empty handed and it bruises the turnip.

 

[bambang]

It is true that Indonesia would gain more money by having more retirees live here than by driving some of us away. One does not gain by squeezing blood out of a turnip. One merely ends up empty handed and it bruises the turnip.

There is no proof that this is true. To use your analogy it is the opinion of one particular turnip.

I do believe that there would be some retirees the country would be better off without.

 

[lumumba]

There is no proof that this is true. To use your analogy it is the opinion of one particular turnip

What can I or anyone else replay to this stupid and useless remark……..
To be diplomatic: No comment.

I do believe that there would be some retirees the country would be better off without.

Again, what can anyone contribute/reply to this sickening remark?

I told you before, you are very cocky and also a big mouth and if you did have any HIGH education, let me tell you that it was a bloody waist of time and money, I hope your own money.


And as sydneymike said; this will be my last post.

 

[JohnnyCool]

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.

What are "innocent questions", bambang, by your definition?

Many expats living in Indonesia find it difficult to obtain reliable information from official sources. That's not something new. Don't you think expats are entitled to have up-to-date and relevant information that affects them directly in efficient and unambiguous ways? Maybe that's too much to ask for the privilege of living in your country.

Not every expat here is trying to milk Indonesia - some of us just want to know what's going on, and in a time-frame which enables us to make important decisions concerning our lives here. Past leaders of your country have milked the place big time and gotten away with it. Shouldn't concerned people like yourself be spending time addressing the imbalances of the past rather than sticking your offended nose into matters that don't directly concern you?

...before having all the facts is unfair to Indonesians..

Do you mean by that that you have all the facts? If so, why don't you, or your government, share them with us?

What's "fair" for Indonesians, in your opinion? If you're unimpressed with your own country's recent adoption of so-called democracy, the dreadful state of education, health services, public services, transportation, ecological management, religious intolerance, travesties of justice, etc, why don't you get off your pedestal and do something for your own people?

I believe that in the main, expats have contributed more than they've taken from this country, with some exceptions. One big difference between expats and people like you, is that we can leave and go somewhere else. The Indonesian government should remember that. Remember the saying "Don't bite the hand that feeds you".

My only suggestion to you is fix up your own back-yard before you go around pissing in other people's affairs. Or, stick the "facts" where your mouth is.

In other words, get real.

:evil:

 

[Dr Deepak]

The retirement visa comes with a kitas. If you have a kitas, you have to pay the new fiskal at the airport. The stated intention of the new fiskal is to 'motivate' the one with the kitas to get a Tax Number (a friend with a social visa was just told by immigration/tax people at the airport that she doesn't have to pay the fiskal because she does not have the kitas). My visa agent (and others) are offering to go and get us a Tax Number to solve the problem. Simple. Problem solved, which would have cost us $3000 USD in these two years.

However, it does not seem so simple upon examination:

1. An Income Tax form in Bahasa must be filled out MONTHLY and annually (according to Bali IDE).
2. Do we get one (1) Tax Number as a couple, or do we get two (2) numbers? If we have to have two tax numbers, that means we have to fill out two tax income forms monthly and annually. To have a visa agent fill out just our annual tax forms, the cost is 2.5 million each.
3. My visa agent is recommending I just put down -0- for income to keep things simple. However, to have a retirement visa, I must have some form of income. Regardless what the Tax Treaty says, the tax office requires that retirement income be reported. I am exempt only if I show a "receipt paid". I do not have a "receipt paid" because the amount is so small that I do not even have to file. However, this same amount is taxable in this country.

Does anyone have any answers to these questions? While I appreciate any positive and constructive suggestions, I would really like to hear from some other retirement visas who understand and can empathize with the boat we are in.

 

[Jimbo]

If you're unimpressed with your own country's recent adoption of so-called democracy, the dreadful state of education, health services, public services, transportation, ecological management, religious intolerance, travesties of justice, etc, why don't you get off your pedestal and do something for your own people?

I think this is unfair and paints the whole of Indonesia in a bad light. To some extent all the above could be applied to the USA, UK and Europe. To just blacken Indonesia for some incidents is just plain wrong.

You are falling into the trap of playing the man rather than the subject in hand as is Bambang.

Religious intolerance is isolated in Indonesia and the majority of Indonesians are very tolerant. Yes there is travesties of just but the very fact they get reported shows that the country is trying to stop them.

The health service is there even down to kampung level there is a psukesmas in every Desa albeit it is underfunded and the same can be said of education which is also in every Desa. Children may walk miles to go to school but at least they have one to go to.

I admit there are failings in public transportation but given the very nature of the Tanah Air we live in amongst the 17,000 plus islands it is beyond the sources of any western regime to institute such a public system.

As far as democracy goes it is in its infancy of just a few years but it is there and will be improved upon in the years to come. Much better than the Suharto days thats for sure.

I have sympathy for Dr Deepak but feel a little more research before he made the decision to come would have given him a lot of the knowledge he lacked and now is suprised out. No laws have been changed only the amount of Fiskal. All information on what is required to become a retiree were available on this (posted by me several times) and other web sites. I would suggest that it was not properly explained to him by his agent. Thats life

 

[KaBIm]

I would suggest that it was not properly explained to him by his agent. Thats life

You have the point here Jimbo. I have met many agents who have no idea about what they are doing and who mislead expats/would be expats by giving incomplete, outdated or false informations. However their fees would easily let you believe that they are professionals ! What a scam... :cry: