Exit tax and base currency

[Robert100]

ok am about to register for NPWP in the next few weeks. so far I stayed here 120 days in the past 12 months.
Will my Tax start with the 1st day of the 180 days, or the day I register for NPWP , or 1 Jan 2024 or, or when I got my long term visa, shortly after which I actually left for many months but decided to return. What is done in practice ?

I understand that I need to declare all privately owned assets, e.g. overseas bank accounts and stock portfolios, that I held at that date.

When selling any assets, what base currency is used to calculate the Capital Gains Tax. The Currency of the bank account e.g. Singapore Dollar? or are the assets converted to IDR and then the tax is calculated on the difference in IDR at purchase and sales price.

Happy to pay Capital Gains Tax on any assets that I do sell at a profit.
However I really do not want an exit tax applied to my assets in case I ever want to leave Indonesia. Exit tax means deemed sale of all worldwide assets. Is this on the cards ?

 

[Helpful Herbert]

Are you employed by an Indonesian company? Set up your own company? Or just here as an individual without employment status (eg spouse of Indonesian, retired, digital nomad)?

 

[Robert100]

No I am not employed and do not wish to setup a company here or even earn income here. Just rent 1- 2 years at a time , but I understand that I eventually have to register for tax especially once the 180 or 183 days kicks in. After banking costs and USA whit holding tax 15% , it's not really not that much but happy to pay it at (+-10% to 15% ) on the dividends which is what's left after banking fees. To be honest, I have a bigger issue with declaring my assets than paying that tax.

 

[Helpful Herbert]

If you don't have any employment status or earned income here you will have difficulty in obtaining a tax number, or declaring tax in the way you describe.
Also there is no system to check whether or not you have exceeded 183 days in the country, unlike in some other countries where this is quite closely controlled.

 

[Robert100]

ok found an article , brand new :

Exit tax adoption to protect Indonesia’s tax base | Scientax: Jurnal Kajian Ilmiah Perpajakan Indonesia

ejurnal.pajak.go.id

 

[Samoerai]

ok found an article , brand new :

Exit tax adoption to protect Indonesia’s tax base | Scientax: Jurnal Kajian Ilmiah Perpajakan Indonesia

ejurnal.pajak.go.id

Huh, this is a paper describing a study to implement exit-tax.

Far from reality in Indonesia.

I think tax authority in Indonesia are more interested in the (big) companies and the really rich people, who are avoiding paying tax by shell-company-constructions and hiding money in bank accounts in the Bahamas, Panama, Singapore etc ... before they come knocking at your door.

Persons with bank accounts with HSBC are of particular interest ..

 

[jstar]

The last time I heard about Exit Tax was in 2009 or so. They abandoned it at the time.

OP: Better explain first what visa or residence permit you’re (or plan to be) on. As @Helpful Herbert already alluded to, that makes a huge difference (in reality).

 

[Robert100]

The visa I am on is second home visa. not many have it in Java, more in Bali I heard.

Yes of course it's a study. This means it's not implemented yet, but could be implemented.. There are lots of double tax issue with it as the article explains. They would have to convert their tax to a step up tax not time of acquisition as base value for the tax. That means valuations of everything.. it's more admin work because now you are taxing everything not just what gets sold , so you have to value everything when entering Indonesia even stupid shit like someone's old company where ever.. and if that company was worth 200 000 USD when he left Canada he can use it as a credit in case it gets shut down.. So it cuts both ways.

 

[Helpful Herbert]

Just because 2 people have written a research paper doesn't mean anything. A major change like that would take years or more likely a decade to be introduced. A law would need to be drafted, discussed, approved, signed into law, then implementing guidelines issued.

Anyway since you clearly want to pay lots of tax, I suggest you go to your nearest tax office, explain your situation, and I'm sure they will be delighted to take your money.

 

[H29062024]

My advice is to skip the NPWP and stay off the Indonesia tax radar screen. The government is not proactive in requiring individuals who do not have income from Indonesia to register for NPWP. In fact, there are tens of thousands of foreigners living in Bali full-time on social visit passes who are technically tax residents (over 183 days in a 12 month period) but to whom the government refuses to issue NPWPs, which clearly shows their intent not to tax residents who do not earn income in Indonesia.

 

[Samoerai]

He is on a Second Home Visa/KITAS .... So, he had to proof funds of at least IDR 2 billion ($126,000) in an Indonesian bank account. To do that ... does the bank not ask for a NPWP?

Would be interesting to know his answer.

 

[snpark]

Well if he is "earning" interest that would be taxed at source but then what about the income derived from said interest. Etc etc

 

[Cloudcat]

Persons with bank accounts with HSBC are of particular interest ..

Why HSBC, Samoerai? Please share ...

 

[Samoerai]

Why HSBC, Samoerai? Please share ...

Also interesting to watch this video regarding the use of HSBC as the money-worldwide-infrastructure of China (parallel to the silk road infrastructure)

 

[Vanuatu]

I went to the tax office the past 2 years to discuss getting an NPWP as I am a full time resident on a spousal KITAP, but neither my wife nor I derive any income from Indonesia. Both years, the tax office said they won't issue me a NPWP as I don't have employment in Indonesia and that as long as I am filing taxes in my home country on income earned there I am fine and there is no reason to file an Indonesian tax return. Even when I questioned them about the rule to file as an Indonesian resident to see if I would owe extra based on my foreign earnings, they said "no" The last time, was in March of this year, and we even waited for them to discuss with the head of the tax office and he said there is no reason to issue an NPWP and no reason to file. They thanked me for being honest and trying, but said they would not give me a NPWP.

 

[Robert100]

I went to the tax office the past 2 years to discuss getting an NPWP as I am a full time resident on a spousal KITAP, but neither my wife nor I derive any income from Indonesia. Both years, the tax office said they won't issue me a NPWP as I don't have employment in Indonesia and that as long as I am filing taxes in my home country on income earned there I am fine and there is no reason to file an Indonesian tax return. Even when I questioned them about the rule to file as an Indonesian resident to see if I would owe extra based on my foreign earnings, they said "no" The last time, was in March of this year, and we even waited for them to discuss with the head of the tax office and he said there is no reason to issue an NPWP and no reason to file. They thanked me for being honest and trying, but said they would not give me a NPWP.

Vanuatu, I like your profile name! That country sounds so cool.
Where was this tax office in Jakarta or Bali ? No need to be too specific, ...

 

[Robert100]

He is on a Second Home Visa/KITAS .... So, he had to proof funds of at least IDR 2 billion ($126,000) in an Indonesian bank account. To do that ... does the bank not ask for a NPWP?

Would be interesting to know his answer.

Yes this was not required for NPWP, it's with a government bank and I am getting very bad return on this investment.. but trying to fly low until I understand this tax situation .. Like I stated above I don't mind paying the tax but giving the government my account details. etc. ?! The world is full of hackers and anyone things that Indonesian tax system cannot be hacked or is not hacked once in a while is a fool. Next thing you are dealing with attempts are getting funds from your bank accounts and ID theft etc.. Even in a Northern European bank I found a completely different email address suddenly under my profile..

 

[jstar]

I can confirm @Vanuatu ’s experience. That was in Jakarta.

 

[Samoerai]

Yes this was not required for NPWP, it's with a government bank and I am getting very bad return on this investment.. but trying to fly low until I understand this tax situation .. Like I stated above I don't mind paying the tax but giving the government my account details. etc. ?! The world is full of hackers and anyone things that Indonesian tax system cannot be hacked or is not hacked once in a while is a fool. Next thing you are dealing with attempts are getting funds from your bank accounts and ID theft etc.. Even in a Northern European bank I found a completely different email address suddenly under my profile..

Interesting ... you can open an account at a government bank without a NPWP.

 

[MamangDudul]

Interesting ... you can open an account at a government bank without a NPWP.

Already told you, right? As long as cash flows most things are possible. The problem is that no one tells you that when shit hits the fan you will still be in trouble. And the main person who will be in trouble is you, not the bank who also ignored laws or used grey areas. For now it's still possible to stay off radar for most things, but it's getting tighter yearly.

EDIT:

Be careful, post could contain conspiracy theories.