E33G visa 1 yr

[marcus]

Sorry about what I wrote before in post no.20 . I did cancel it because it was wrong .

Unfortunately now reading again the Explanation of Article 111 (page 1057/1127 of my pdf file) of UU no.6 Year 2023 , I see that the information (saying Resident Taxpayer is taxed over worldwide income) is there , so regarding it , no change at least since UU no.36 Year 2008 .

I just hope more members ask about this at the KPP/Kantor Pajak , as some other 2 or 3 confirmed what I heard 4 times from different tax officers/different Tax Offices/different years (starting in 2010 , last time 2023) : "resident foreigners without income in Indonesia (except bank interests) DO NOT need to pay Indonesian income tax over income from abroad" .

 

[Samoerai]

"resident foreigners without income in Indonesia (except bank interests) DO NOT need to pay Indonesian income tax over income from abroad" .

Yes, defacto ... the UU should be changed.

 

[jstar]

I just hope more members ask about this at the KPP/Kantor Pajak , as some other 2 or 3 confirmed what I heard 4 times from different tax officers/different Tax Offices/different years (starting in 2010 , last time 2023) : "resident foreigners without income in Indonesia (except bank interests) DO NOT need to pay Indonesian income tax over income from abroad" .

It goes even further than that; they often refuse(d) to provide a NPWP to a foreigner residing in RI, if the person has/d no professional income here.

 

[fastpitch17]

It goes even further than that; they often refuse(d) to provide a NPWP to a foreigner residing in RI, if the person has/d no professional income here.

That's what I got during an earlier grace program. I asked and showed what I received from the US and was sent in my way with a, you do not pay tax here so no number needed. That was in a Jakarta tax office.

 

[Hawk256]

That's what I got during an earlier grace program. I asked and showed what I received from the US and was sent in my way with a, you do not pay tax here so no number needed. That was in a Jakarta tax office.

Same story here.

 

[Brian86]

NPWP will no longer be required, and when you get KITAS or KITAP you should be getting a NIK from Catatan Sipil, which is now your tax number.

 

[jstar]

Of course, that’s already for quite some time and discussed on multiple occasions here.

But I don’t believe for one second that all these millions of Indonesians who didn’t have a tax ID, suddenly would have one. Nor that those foreigners who are refused in the past would automatically have one. So the principle and process that one should be reported and activated at the pajak, is the same, whatever they call it and whichever identification they use.

In countries like the UK they still have the TIN while in many other countries in the EU a ‘citizen service number’ is used which is not only tax related but is used in all dealings with the government. That’s what they were heading for.

 

[centurion]

Sorry about what I wrote before in post no.20 . I did cancel it because it was wrong .

Unfortunately now reading again the Explanation of Article 111 (page 1057/1127 of my pdf file) of UU no.6 Year 2023 , I see that the information (saying Resident Taxpayer is taxed over worldwide income) is there , so regarding it , no change at least since UU no.36 Year 2008 .

I just hope more members ask about this at the KPP/Kantor Pajak , as some other 2 or 3 confirmed what I heard 4 times from different tax officers/different Tax Offices/different years (starting in 2010 , last time 2023) : "resident foreigners without income in Indonesia (except bank interests) DO NOT need to pay Indonesian income tax over income from abroad" .

You know how Indonesian regulations are applied in practice. The rule is not applied until it is applied.

The name of the game is that you are always in potential wrongdoing so the state has the upper hand.

 

[marcus]

NPWP will no longer be required,

If you see the Government website https://pajak.go.id/ you still see "Pendaftaran NPWP" (NPWP Registration) there .
So , I understand that this process of "NIK (resident identity number) becoming NPWP (taxpayer identity number)" can be considered a minor change (just using only 1 number for 2 functions instead of having 2 different numbers) .

and when you get KITAS or KITAP you should be getting a NIK from Catatan Sipil, which is now your tax number.

I guess you may be mistaken .
A NIK holder does not automatically hold a NPWP . To have a NPWP you still need to register in a Tax Office (only about 25% of Indonesians have a NPWP , according to https://dataindonesia.id/varia/detail/survei-baru-219-masyarakat-indonesia-punya-npwp)

 

[marcus]

You know how Indonesian regulations are applied in practice. The rule is not applied until it is applied.

I think this subject is by far the most strange case I ever saw . So many tax officers consistently giving an information that disagrees with what is stated in the Law .

The name of the game is that you are always in potential wrongdoing so the state has the upper hand.

Yes , unfortunately .

 

[Serge]

UU no.6 Year 2023

Did you read APPENDIX (Lampiran) III and II (pages 169-175) to "Bagian Kedua Kriteria Keahlian Tertentu serta Tata Cara Pengenaan Pajak Penghasilan bagi Warga Negara Asing" of PMK No. 18/PMK.03/2021? As I see 4 years exemption for world wide income is given only if WNA has employee permit (KITAS) and working visa (coze RPTKA shall be attached to WNA's "Surat Permohonan") in quite short list of professional areas with obligation to transfer WNA's professional knowledge to Indonesian host (see page 20 Pasal 7 ayat 3). So because a holder of E33G index visa, so called "digital nomad" or "remote worker", cannot and has no Indonesian employer due to E33G visa restrictions, he also has no tax exemption on his foreign min $60K, named in immigration web as "gaji atau pendapatan senilai".
Thus, $60K has to be taxed in Indo similar way to a salary item, I am afraid even not as a freelance (business) gross sales item, in accordance with General PPh provisions with progressive Indo tax rates - for $60K with effective Indo tax rate ~20.8%. And if in the source country of his income foreign income tax is less, even applicable Double Tax Treaty will not help to reduce 20.8% final effective tax rate on $60K.

 

[marcus]

... So because a holder of E33G index visa, so called "digital nomad" or "remote worker", cannot and has no Indonesian employer due to E33G visa restrictions, he also has no tax exemption on his foreign min $60K, ... for $60K with effective Indo tax rate ~20.8% ...

For those interested on Remote Worker Visa (E33G) and having this income from countries with income tax smaller than the equivalent Indonesian income tax , please ask about this subject at the Indonesian Tax Office (I still believe that the tax officer will say what his/her colleagues told to many of us) . Then you decide if it is worth to take the risk if the answer is the same as the one we got (which was : no need to worry about the Indonesian income tax if there is no income from Indonesia) .

... even applicable Double Tax Treaty will not help to reduce 20.8% final effective tax rate on $60K.

Regardless of any Tax Treaty , the Indonesian Tax Law already states the "no double taxation" rule .

 

[Serge]

ask about this subject at the Indonesian Tax Office (

Thank you, Marcus, but in no one country and never tax officers are responsible consultants for taxpayers, that's also why a lot of tax disputes in courts! Due to my 20 years experience I prefer not to trust any unproved tax officer opinion or advice.

the Indonesian Tax Law already states the "no double taxation" rule

If anybody has already discussed a world wide income taxation with any tax officer, can you please share with numbers of Indo laws, articles they refferred to?
Coze as I see Directorat Pajak web examples and published regulations ALL FOREIGN income shall be included in tax report of WNA who is an Indo tax resident as well as foreign tax payments as credit deduction with payment proofs under APPLICABLE Double Tax Treaty.

which was : no need to worry about the Indonesian income tax if there is no income from Indonesia

I still think when locals tell you like that they mean not a local laws exception but a result of TAX CALCULATION, it is like they SUPPOSE that when "bule" with USUALLY more high foreign tax rate calculates Indo tax and applies DTT provisions he will pay NOTHING in Indonesia.

But TO PAY and TO CALCULATE AND DECLARE are two big differences!

First, if AFTER calculation you need to pay zero in Indonesia cz of DTT credits it doesnt mean you also need no to file your Indo declaration here in Indonesia WITH proofs that you paid already abroad your foreign tax from your world wide income and it is REALLY subject to DTT provisions.

Second and more big problem is that not all foreign tax laws will treat such a WNA as a taxpayer cz he stays in Indonesia also long period (usually same 183 days limit). So, mohon maaf pak, but in such a case WNA cannot declare his overseas income (depends of income type) in his "home country", cannot apply any DTT, will have no any credit deduction from Indo tax and has to pay income tax IN FULL IN INDONESIA where he is treated as a tax resident and taxpayer!

Also not all foreign taxes are covered by DTT. For example my foreign low rate special tax is not, so I will never deduct it from Indo tax and will pay both Indo and my "home" tax.

Result of Indo tax calculation is not equal to ANY "Indo tax exception", including filing a tax report. WNA who stays in Indo more than 183 days is still obliged to declare his world wide income and to prove any DTT deductios. I see no any avoiding rules in Indo regulations. WNA cannot reffer to just a words of any tax officer, it is just a bla-bla-bla, WNA will be fully responsible for all errors in declaring after tax audit which can be processed up to 5 years here...

 

[Helpful Herbert]

Do you know how rare it is for tax audits to be carried out on individuals? Very rare indeed (less than 1 in 1000, and they focus on the high value ones).
As stated in posts above it is the opinion of the tax officer in your tax office that counts.

 

[Serge]

Do you know how rare it is for tax audits to be carried out on individuals? Very rare indeed (less than 1 in 1000, and they focus on the high value ones).
As stated in posts above it is the opinion of the tax officer in your tax office that counts.

Yes, I can imagine, cz even all visa agencies offer a help service to make a contract with $60K for immigration office to appy for E33G)) This visa is also just launched this year, nobody has reported any income under it.

And? My posts are not about risk estimation but about searching provisions in laws and regulations which should be applied and clearly answer the question. It is quite clear task.

Estimation of risks is everytime a private, personal procedure and relults always vary. If any foreigner wish to violate Indo regulations it is his full responsibility.

 

[pantaiema]

Yes, I can imagine, cz even all visa agencies offer a help service to make a contract with $60K for immigration office to appy for E33G)) This visa is also just launched this year, nobody has reported any income under it.

And? My posts are not about risk estimation but about searching provisions in laws and regulations which should be applied and clearly answer the question. It is quite clear task.

Estimation of risks is everytime a private, personal procedure and relults always vary. If any foreigner wish to violate Indo regulations it is his full responsibility.

Unless their office is registered outside Indonesia, I fail to understand how they could legally do that. Under E33G visa index, the employment contract must originate from a company established outside Indonesian territory.

Additionally, income tax is typically deducted at the source. If they declare they pay their employees a salary of US$60k. Are they going to pay the tax in their country of origin and bill the person.

 

[centurion]

Thank you, Marcus, but in no one country and never tax officers are responsible consultants for taxpayers, that's also why a lot of tax disputes in courts! Due to my 20 years experience I prefer not to trust any unproved tax officer opinion or advice.


If anybody has already discussed a world wide income taxation with any tax officer, can you please share with numbers of Indo laws, articles they refferred to?
Coze as I see Directorat Pajak web examples and published regulations ALL FOREIGN income shall be included in tax report of WNA who is an Indo tax resident as well as foreign tax payments as credit deduction with payment proofs under APPLICABLE Double Tax Treaty.


I still think when locals tell you like that they mean not a local laws exception but a result of TAX CALCULATION, it is like they SUPPOSE that when "bule" with USUALLY more high foreign tax rate calculates Indo tax and applies DTT provisions he will pay NOTHING in Indonesia.

But TO PAY and TO CALCULATE AND DECLARE are two big differences!

First, if AFTER calculation you need to pay zero in Indonesia cz of DTT credits it doesnt mean you also need no to file your Indo declaration here in Indonesia WITH proofs that you paid already abroad your foreign tax from your world wide income and it is REALLY subject to DTT provisions.

Second and more big problem is that not all foreign tax laws will treat such a WNA as a taxpayer cz he stays in Indonesia also long period (usually same 183 days limit). So, mohon maaf pak, but in such a case WNA cannot declare his overseas income (depends of income type) in his "home country", cannot apply any DTT, will have no any credit deduction from Indo tax and has to pay income tax IN FULL IN INDONESIA where he is treated as a tax resident and taxpayer!

Also not all foreign taxes are covered by DTT. For example my foreign low rate special tax is not, so I will never deduct it from Indo tax and will pay both Indo and my "home" tax.

Result of Indo tax calculation is not equal to ANY "Indo tax exception", including filing a tax report. WNA who stays in Indo more than 183 days is still obliged to declare his world wide income and to prove any DTT deductios. I see no any avoiding rules in Indo regulations. WNA cannot reffer to just a words of any tax officer, it is just a bla-bla-bla, WNA will be fully responsible for all errors in declaring after tax audit which can be processed up to 5 years here...

Spot on.

 

[centurion]

Do you know how rare it is for tax audits to be carried out on individuals? Very rare indeed (less than 1 in 1000, and they focus on the high value ones).
As stated in posts above it is the opinion of the tax officer in your tax office that counts.

Do you know what is treshold for top 1% in Indonesia? Around 40.000 USD/yearly revenue.

And individuals are more easy to catch than companies.

 

[centurion]

Additionally, income tax is typically deducted at the source. If they declare they pay their employees a salary of US$60k. Are they going to pay the tax in their country of origin and bill the person.

If you are non-resident the tax sometimes is not paid at all at the source.