It's called diaspora/ex wni visa. Even some said one can apply kitap directly, no need kitas. If I am not wrong, still one has to show ability to buy bonds worth 35,000 or something, have to look at my "clever book" LOL
INFORMATION AND COMMUNITY FOR EXPATS IN INDONESIA
Coming home to Indonesia, need guidance...
- Thread starter Cloudcat
- Start date
Hi Mamang, Thank you for your comment. It is very true. I'll cross the bridge when I come to it, but hopefully no need to cross the bridge, LOL...I wish you all the best but just an advice, get good informations about the tax laws. A lot of people step into certain traps. In Indonesia nothing is a problem until it is a problem, everybody knows everything/can do everything until he can't.
That's nothing against snpark, what he said isnt wrong. Iam just saying be sure to know what's necessary in your situation. Sorry also..i can't help much in this case. Just a friendly advice.
Brian86
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The bond purchase is only required if you want the 5 year KITAS with no sponsor required. It is not required if you want the 1 or 2 year KITAS with a sponsor, or the 1 year KITAS with no sponsor. All of these can be extended indefinitely, so the difference is just longer between renewals.
All described in: Permenkumham Nomor 22 Tahun 2023
Thank you so much, Brian.
You could definitely apply for Retirement Visa under Silver Hair Golden Visa (E33E) if you are already 60+. But for this will need to deposit at least US$50k in an INDONESIAN state-owned bank + have an income/pension of US$3k+ per Month.
Alternatively Second Home Visa (E33). You will need to deposit funds in an INDONESIAN state-owned bank with a value of US$ 130k+ or Purchase property in Indonesia such as an apartment/flat house with a value of US$1m+
As an Ex-WNI, you should consider taking advantage of a special offer for former Indonesian citizens, the Diaspora Visas. What type of visas will depend on whether you have an Indonesian citizen as a guarantor, or meet the investment requirement.
As an Ex-Indonesian with guarantor you could apply for E32C Visa, there is no investment requirement for this.
If you can not find a guarantor, your other options are:
E32A you will need to purchase Indonesian government bonds, shares or mutual fund with a minimum value of US$35k
E32D You will need to purchase Indonesian government bonds, shares or mutual fund with a minimum value of US$15k.
If you marry an Indonesian Citizen you might qualify for Spouse sponsored visa E31A. It is quite similar to E32C, no investment requirement but in this case your spouse is your sponsor.
There is already a dedicated thread about visa option for Ex-Indonesian including under the old and new regulations:
Visa Options for ex-WNI (Vitas, Kitas, Kitap)
Hey all, I figured out that there are many uncertainties and questions still floating around regarding the visa options for ex-WNI even though there were many threads written about it. So, I thought this is probably a good place to gather all the information in one place.I will start with some...
www.expatindo.org
Regarding the matter of setting up a bank account to receive income and/or taxation from abroad, it's another complex topic. There is already an existing discussions. You can either start a new discussion thread or continue to an ongoing one.
As an ITAS/ITAP holders you will will automatically quality as Indonesian “resident Taxpayer (SPDN)” based on UU_No_36_2008 about income tax:
The term “resident Taxpayer (SPDN)” means
"a. individual who resides in Indonesia, an individual who has been present in Indonesia for more than 183 (one hundred and eighty-three) days within any 12 (twelve) months period, or an individual who has been residing in Indonesia within a particular taxable year and intends to reside in Indonesia;"
Whether you need an NPWP or not is a grey area and still the subject of debate among practitioners. But many of them suggest for you to have one. But based on UU_No_36_2008 about income tax, you will not need NPWP if your income is below the income tax threshold: based on their clarification Document:
"Sehubungan dengan pemilikan Nomor Pokok Wajib Pajak (NPWP), Wajib Pajak orang pribadi yang menerima penghasilan di bawah Penghasilan Tidak Kena Pajak (PTKP) tidak wajib mendaftarkan diri untuk memperoleh NPWP."
In connection with the ownership of a Taxpayer Identification Number (NPWP), individual taxpayers who receive income below the income threshold (PTKP) are not required to register to obtain a NPWP
Also, there have been reports from some individuals that certain Immigration offices in Indonesia do not request an NPWP for ITAS extensions. It's important to be aware that this practice may vary depending on the specific immigration offices and could be subject to change in the future.
But if you want to open an Indonesian Bank Account, they will "typically" ask your NPWP.
Keep in mind this is not a professional advice. you will still need to check it by yourself and confirm it with the authority.
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Thank you so much Pantaiema, I was very busy today to come back to this forum.
Really appreciate your time explaining everything in detail.
I am public employee in the US, and the Tax treaty between Indonesia and America, Article 18 regarding Government Service mention:
"Paragraph 2 deals with pensions paid out of public funds of a Contracting State or political subdivision or local authority thereof to an individual for past services rendered. Such pensions may be taxed only in the State from which they are paid. The provisions of paragraphs 1 and 2 do not affect the right of a Contracting State to tax its own citizens or permanent residents. However, in accordance with paragraph 4 of Article 28(General Rules of Taxation), the "saving clause" does not affect the benefits conferred by a Contracting State under this Article on individuals who are not citizens of, or residents having immigrant status in, that State. Thus, for example, a pension paid by the U.S. Government to a former employee who retires to Indonesia may not be taxed by Indonesia unless the individual is a citizen of Indonesia or is admitted as a permanent resident of Indonesia for immigration purposes. In the converse case, the U.S. would not tax S pension paid by the Government of Indonesia to an individual who retires to the United States unless the individual is a U.S. citizen or holds a “green card”
Do you think we can interpret the language in bold as for ITAP holder, because ITAS is for sementara/temporary?
Thank you so much, Pantaiema, and everyone .......
Really appreciate your time explaining everything in detail.
I am public employee in the US, and the Tax treaty between Indonesia and America, Article 18 regarding Government Service mention:
"Paragraph 2 deals with pensions paid out of public funds of a Contracting State or political subdivision or local authority thereof to an individual for past services rendered. Such pensions may be taxed only in the State from which they are paid. The provisions of paragraphs 1 and 2 do not affect the right of a Contracting State to tax its own citizens or permanent residents. However, in accordance with paragraph 4 of Article 28(General Rules of Taxation), the "saving clause" does not affect the benefits conferred by a Contracting State under this Article on individuals who are not citizens of, or residents having immigrant status in, that State. Thus, for example, a pension paid by the U.S. Government to a former employee who retires to Indonesia may not be taxed by Indonesia unless the individual is a citizen of Indonesia or is admitted as a permanent resident of Indonesia for immigration purposes. In the converse case, the U.S. would not tax S pension paid by the Government of Indonesia to an individual who retires to the United States unless the individual is a U.S. citizen or holds a “green card”
Do you think we can interpret the language in bold as for ITAP holder, because ITAS is for sementara/temporary?
Thank you so much, Pantaiema, and everyone .......
As a matter of fact is that state pensions in many countries (if not all) are already taxed at source. So the pensions received in their bank accounts, are already taxed. They could then file up for a tax return if they are entitled to, or overpay their taxes but that is at a different stage. The US has a DTA agreement with Indonesia, also US Income tax rate is higher than Indonesia so it should not be taxed.
Whether it will make a difference for ITAS/ITAP holder I am not quite sure about that. And I am not familiar the way the state pension in the US is being paid. Maybe someone who knows this could shed the light.
However, to the best of my knowledge, I recall reading a few times that an spouse sponsored ITAP holder (not ITAS) in Indonesia acknowledge do not have an NPWP as their sole income come from state pensions in another country. However, it's important to verify this information with the relevant authority and not take it as absolute truth. We might learn more from other people personal experience. Someone is taking this picture from an Immigration office for ITAP extension, you will notice no NPWP is required.
One thing to be cautious about is that there may be conditions imposed to convert from ITAS to ITAP or for extension in the future, which could have consequences later on for those who need conversion or extension.
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These are the requirements (see photo) when applying for an extension of one's KITAP at Imigrasi.
A NPWP is not required, as it is not Imigrasi's task to verify. See the article 128 in
PERATURAN MENTERI HUKUM DAN HAK ASASI MANUSIA
REPUBLIK INDONESIA
NOMOR 22 TAHUN 2023
TENTANG VISA DAN IZIN TINGGAL
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Editted this post. Because I read the post #26 more carefully.
Thus, for example, a pension paid by the U.S. Government to a former employee who retires to Indonesia may not be taxed by Indonesia unless the individual is a citizen of Indonesia or is admitted as a permanent resident of Indonesia for immigration purposes.
This is an interpretation of the articles in DTA USA-Indonesia.
The way I read article 18 regarding state pensions is
1.
USA State pensions ... are not taxed in Indonesia. Full stop.
2.
The way I read article 23 paragraph 2: if taxed in Indonesia, tax paid in USA is allowed to be credited for tax to be paid in Indonesia.
Thus, for example, a pension paid by the U.S. Government to a former employee who retires to Indonesia may not be taxed by Indonesia unless the individual is a citizen of Indonesia or is admitted as a permanent resident of Indonesia for immigration purposes.
This is an interpretation of the articles in DTA USA-Indonesia.
The way I read article 18 regarding state pensions is
1.
USA State pensions ... are not taxed in Indonesia. Full stop.
2.
The way I read article 23 paragraph 2: if taxed in Indonesia, tax paid in USA is allowed to be credited for tax to be paid in Indonesia.
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Yes, there is federal and state tax withholding on remuneration and pension in the US. Tax brackets for Fed is 10%-37% with 37% for income between USD609,350 and over. While for California State is 1%-9.3%.
While pasal 17 untuk Orang Pribadi/tarif umum is 5%-35%. Looks like pasal 17 offer smaller rate, but when converting dollar to rupiah, it makes big difference. For example, $47,000 will fall in tax brackets 10-12% for Fed tax, plus 1-6% for State tax. While pasal 17 = when $47,000 converted to Rupiah will fall in 0-30% tax brackets. So there will be more tax owe in Indonesia.
Point 2 of Samoerai posting, and regarding DTA (Double Tax Agreement) in Pantaiema posting =
This is the part that I dont find the answer yet because DTA do not mention which pasal or rate will apply (if taxed by both countries). Pasal 17 is for employee working in Indonesia (tarif umum), pasal 24 is for worldwide income (from in and outside Indonesia). My pension will not fall in neither one.
Please correct me if I am wrong, as I am still searching. Any advice, input, sharing will be much appreciated.
Thank you Pantaiema and Samoerai for responding.......
While pasal 17 untuk Orang Pribadi/tarif umum is 5%-35%. Looks like pasal 17 offer smaller rate, but when converting dollar to rupiah, it makes big difference. For example, $47,000 will fall in tax brackets 10-12% for Fed tax, plus 1-6% for State tax. While pasal 17 = when $47,000 converted to Rupiah will fall in 0-30% tax brackets. So there will be more tax owe in Indonesia.
Point 2 of Samoerai posting, and regarding DTA (Double Tax Agreement) in Pantaiema posting =
This is the part that I dont find the answer yet because DTA do not mention which pasal or rate will apply (if taxed by both countries). Pasal 17 is for employee working in Indonesia (tarif umum), pasal 24 is for worldwide income (from in and outside Indonesia). My pension will not fall in neither one.
Please correct me if I am wrong, as I am still searching. Any advice, input, sharing will be much appreciated.
Thank you Pantaiema and Samoerai for responding.......
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US Social Security is taxed in only a few States. It is not taxed in Indonesia. Receiving a pension from a private companies pension plan or payouts from a 401K or similar account are taxed in Indonesia.
You do not deduct from Indonesia taxes for tax paid in the US. Just the opposite. Tax paid in Indonesia can be credited on US tax filings.
You do not deduct from Indonesia taxes for tax paid in the US. Just the opposite. Tax paid in Indonesia can be credited on US tax filings.
Thank you, Fastpitch17.
That's what I learnt so far but not fair. I worked for almost 20 years in the US, saving in 401K, then retire in Indonesia, paying tax on those retirement saving in Indonesia even though only the difference tax charged more in Indonesia. I do hope that 401K saving is considered remuneration of past employment. If so, according to DTA it is taxable only by the paying state.
Tax paid in Indonesia that can be credited on US tax filing is only for Earned Income Credit (EIC) for US citizen who work outside the US. I will not work in Indonesia just retire.
That's what I learnt so far but not fair. I worked for almost 20 years in the US, saving in 401K, then retire in Indonesia, paying tax on those retirement saving in Indonesia even though only the difference tax charged more in Indonesia. I do hope that 401K saving is considered remuneration of past employment. If so, according to DTA it is taxable only by the paying state.
Tax paid in Indonesia that can be credited on US tax filing is only for Earned Income Credit (EIC) for US citizen who work outside the US. I will not work in Indonesia just retire.
Yes .. that is my concern too. You still are taxed in Indonesia with their progressive tax rates 0 - 30 % and can subtract the tax paid in USA (check DTA USA-Indonesia, article 23 paragraph 2) . How much exactly? Make some calculation in a spreadsheet. I don't think the numbers will be that shocking.
But still every rupiah paid for tax in Indonesia, is one to many (check corruption in Indonesia: https://www.asiapacific.ca/publication/indonesian-finance-ministry-under-fire-over-alleged).
And still they call this a DTA treaty! Ya Allah!
Or in this case maybe: Ya Ampuuuuun!
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Are you sure that your $401k savings will be subject to taxation? As far as I know, you'll only be taxed on the interest earned on your savings, not simply because you have a US$401k in saving account. It's likely that the accumulation of your $401k can be traced back to gradual savings from your earnings, on which income tax has already been paid.
If your savings of US$401k are invested in shares or funds, you may be taxed on dividends earned and capital gains (CGT), but again, not solely because your investments are valued at $401k.
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401k is pre tax money. When you withdraw, you owe taxes on what you withdraw.
'Pre-tax 401(k) plans are retirement savings accounts that allow you to take money out of your paycheck before your money is taxed. Traditional 401(k) plans are pre-tax accounts, while Roth 401(k) plans have you pay taxes on the money now. When you open a pre-tax 401(k) plan, you will put money away now, and then pay taxes on it in retirement when you withdraw it.'
"Roth 401(k) and other after-tax 401(k) contributions have account holders pay taxes on that money now, but not in retirement."
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How Does a Pre-Tax 401(k) Work?
Pre-tax 401(k) contributions reduce your taxable income, so you pay less tax to the government with each paycheck. Traditional 401(k)s are pre-tax retirement accounts.
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Happy Long Weekend, Everyone....
When we deduct our pay every month to contribute to 401K retirement saving we can choose pre-tax (pay tax when withdraw later) or after-tax/Roth (pay tax now, no more tax when withdraw). This is what happen in the US, not sure about other countries.
I wished I chose Roth/after tax if I knew I would retire in Indonesia. Hiks....
When we deduct our pay every month to contribute to 401K retirement saving we can choose pre-tax (pay tax when withdraw later) or after-tax/Roth (pay tax now, no more tax when withdraw). This is what happen in the US, not sure about other countries.
I wished I chose Roth/after tax if I knew I would retire in Indonesia. Hiks....
You didn't? Ya ampuuun!
But, I am in the same spot. I was a fool too, when I was young.
Now, I pay a lot of tax. A lot!
If i could turn the clock back, I would just save the contributions on a bank account.
Tell that to your kids ...
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Before this additional statement I thought the saving has been taxed.
Other countries, including Indonesia (to some extent), have similar savings with different names. It could be taken from pre-tax (gross income), or after tax (net income). This is not a general saving, e.g., saving from net income left over, but it is better to be called 'Pension Saving', The main aim of this type of saving is to encourage people to save for their retirement. In nations with good welfare or benefit systems, governments implement such measures for their own good, as otherwise, they would be required to subsidize individuals through direct benefit payments when people get retired. There are restrictions applied to this type of savings. Typically, as you do not pay income tax, you could only put in a certain amount (not unlimited), and you could only access it at a certain/pension age.
In relation to this statement, I will need to understand more about Roth/after-tax options. But similar systems exist in other countries. Typically, for individuals nearing retirement age, this may not be the optimal choice. Income tax is always needed to be paid; it's either deducted at the source as you earn, with no further tax obligations, or it's deducted from an untaxed pot and will be taxed upon later withdrawal. However, it's important to note that when the income tax is calculated, there are always minimum income tax thresholds where no tax is payable. For many individuals, post-retirement income is unlikely to exceed their earnings during active employment. You could even avoid paying the income tax at all by only withdrawing it monthly up to the income tax threshold. But the problem for expats with subject to Indonesian taxation is that the tax free allowance (Non taxable income threshold) in Indonesia, IDR 63m = EUR 3,662 is very low. Typically your pension is much higher than that and you start paying tax, at a higher rate.
Agree, from additional information provided above by 'Cloudcat' it is apparently the money in the pension saving pot has not been taxed and therefore it will be taxed later in their way out.
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