183 day tax residence rule

Yes. So you can spend a lot of time and effort with the Indonesian tax authority for the purpose of paying zero tax (they will probably consider it wasting their time). Or you can just pay zero tax which is the correct amount in your case. Your choice I guess, the result is the same.
 
Yes. So you can spend a lot of time and effort with the Indonesian tax authority for the purpose of paying zero tax (they will probably consider it wasting their time). Or you can just pay zero tax which is the correct amount in your case. Your choice I guess, the result is the same.
I just want to do the right thing, according to the rules here. After the lockdown, I will go to the tax office here.
 
It would be foolish as a newbie to be the trailblazer to something that longtime expats in Indonesia are not doing. My final answer.
It's okay. I worked in Holland for the Tax Office (Belastingdienst) so I am a bit tainted with tax rules.
 
Tainted sounds about right

You mean "acquainted" I believe

Not that I mean to varnish your reputation
 
It's okay. I worked in Holland for the Tax Office (Belastingdienst) so I am a bit tainted with tax rules.
I translated part of a Dutch expression "waar je mee omgaat, raak je mee besmet". Meaning: "you recognize the peergroup. Their habits, rules etcetera ... you become one of them, so to speak".
 
Hi guys,

does anyone of you know if the new Omnibus law came into force already? If I understand this article correctly, the new omnibus law is already effective?


„However, the new Omnibus Law has added a provision to the Income Tax Law stipulating that foreigners who have become domestic tax subjects by reason of becoming tax resident in Indonesia can be taxed only on Indonesian-sourced income (including if paid offshore) if they meet certain skill requirements.“

Does someone know what is meant by „certain skill requirements“ ?
 
Hi guys,

does anyone of you know if the new Omnibus law came into force already? If I understand this article correctly, the new omnibus law is already effective?


„However, the new Omnibus Law has added a provision to the Income Tax Law stipulating that foreigners who have become domestic tax subjects by reason of becoming tax resident in Indonesia can be taxed only on Indonesian-sourced income (including if paid offshore) if they meet certain skill requirements.“

Does someone know what is meant by „certain skill requirements“ ?
Certain skill requirements mean a foreign workforce with expertise in the fields of science, technology, and/or mathematics; with the obligation of transferring knowledge. This means basically not on director/commissioner positions, as they do not transfer knowledge.
(Art 8(3) of the Ministry of Finance Regulation18 /PMK.03/2021).
The maximum period of preferential tax treatment is 4 tax years.
 
Certain skill requirements mean a foreign workforce with expertise in the fields of science, technology, and/or mathematics; with the obligation of transferring knowledge. This means basically not on director/commissioner positions, as they do not transfer knowledge.
(Art 8(3) of the Ministry of Finance Regulation18 /PMK.03/2021).
The maximum period of preferential tax treatment is 4 tax years.

Thank you for the information. I guess that regulation is meant for foreigners working for a non-Indonesian company and that are sent to Indonesia for working and transferring knowledge in Indonesia?

So, for example, someone who is tax resident in Indonesia and who works abroad for a non-Indonesian company for a few months still needs to pay taxes on that oversea income? Also if he transfers (IT / mathematics / ...) knowledge there?
 
Thank you for the information. I guess that regulation is meant for foreigners working for a non-Indonesian company and that are sent to Indonesia for working and transferring knowledge in Indonesia?

So, for example, someone who is tax resident in Indonesia and who works abroad for a non-Indonesian company for a few months still needs to pay taxes on that oversea income? Also if he transfers (IT / mathematics / ...) knowledge there?

It depends if that person got a foreigner's tax waiver on overseas income in Indonesia based on skills or not. If not, and If he/she is an Indonesian tax resident(foreigner or not), and working abroad, the revenue is considered overseas income and is taxable in Indonesia as well. If the work has been taxed abroad, the double taxation treaty can be used so the taxes payable in Indonesia are reduced or eliminated.
 
I think I understood most part of the new regulation regarding overseas income now. But since my Indonesian is not perfect yet and some articles from the law are difficult to understand, I am not sure if I understood Pasal 26-28 correctly. If I reinvest 30% of my (after tax)income resulting from a PE which is located overseas in Indonesia, then 100% of this overseas income from a PE is tax-free in Indonesia?

Maybe someone whose Indonesian is better or who is more talented in understanding law writing knows if I understood it correctly :)

I will also add Pasal 25 here, since 26-28 refer to Pasal 25:

Pasal 25

(1) Penghasilan lain yang dikecualikan dari objek PPh merupakan penghasilan lain yang berasal dari luar negeri yang diterima atau diperoleh Wajib Pajak.
(2) Penghasilan lain sebagaimana dimaksud pada ayat (1) merupakan:
a. penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negeri; atau
b. penghasilan dari luar negeri tidak melalui bentuk usaha tetap.
(3) Wajib Pajak sebagaimana dimaksud pada ayat (1) merupakan Wajib Pajak dalam negeri.

Pasal 26
(1) Penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negeri sebagaimana dimaksud dalam Pasal 25 ayat (2) huruf a yang diterima atau diperoleh Wajib Pajak dikecualikan
dari objek PPh dengan syarat harus diinvestasikan atau digunakan untuk mendukung kegiatan usaha lainnya di wilayah Negara Kesatuan Republik Indonesia dalam jangka waktu tertentu.
(2) Selain memenuhi persyaratan sebagaimana dimaksud pada ayat (1), penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negeri harus diinvestasikan atau digunakan untuk mendukung kegiatan usaha lainnya di wilayah Negara Kesatuan Republik Indonesia dalam jangka waktu tertentu, paling sedikit sebesar 30% (tiga puluh persen) dari Laba Setelah Pajak.

Pasal27

(1) Dalam hal penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negeri sebagaimana dimaksud dalam Pasal 26 ayat (2) diinvestasikan di wilayah Negara Kesatuan Republik Indonesia kurang dari 30% (tiga puluh persen) dari jumlah Laba Setelah Pajak, penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negen yang diinvestasikan dikecualikan dari pengenaan PPh.
(2) Selisih dari 30% (tiga puluh persen) Laba Setelah Pajak dikurangi dengan penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negeri yang diinvestasikan di wilayah Negara Kesatuan Republik Indonesia sebagaimana dimaksud pada ayat (1) dikenai PPh berdasarkan Pasal 17 Undang-Undang PPh.
(3) Sisa Laba Setelah Pajak dikurangi dengan penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negeri yang diinvestasikan di wilayah Negara Kesatuan Republik Indonesia sebagaimana dimaksud pada ayat (1) dan atas selisih sebagaimana dimaksud pada ayat (2) tidak dikenai PPh.

Pasal 28

(1) Dalam hal penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negeri sebagaimana dimaksud dalam Pasal 26 ayat (2) diinvestasikan di wilayah Negara Kesatuan Republik Indonesia lebih dari 30% (tiga puluh persen) dari jumlah Laba Setelah Pajak, penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negeri yang diinvestasikan dikecualikan dari pengenaan PPh.
Sisa Laba Setelah Pajak dikurangi dengan penghasilan setelah pajak dari suatu bentuk usaha tetap di luar negeri yang diinvestasikan di wilayah Negara Kesatuan Republik Indonesia sebagaimana dimaksud pada ayat (1) tidak dikenai PPh.
 
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My guess is the tax office will suggest he pay his tax directly to their personal bank account or in cash when the tax guy visits his house. :)
I guess, anno 5 April 2023, you are right 🤣
 

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