is transferring non-income money overseas taxed

[Samoerai]

Well, there is a tax treaty between NL and RI. It clearly states what income is taxed where etc.

But this is important; it depends of course in which country you are tax resident. So where you are fiscally domiciled or established. You can’t have your main residence in multiple countries.

In most European countries the tax authorities determine your tax residence based on your personal situation and that includes where you spend most of your time, where your partner and/or family live, where you work. Even if you own property or where you have your medical care. Whether your company is considered 'tax resident in the Netherlands' is obviously determined by the place where management takes place.

If one has a permanent residence permit (ITAP), stays more than 183 days per year in Indonesia, and is married to a WNI whose KTP is in RI, I don’t see any tax authority considering the Netherlands as fiscal residence. Even if you spend 4 months per year there to avoid having to deregister from the civil registry and to stay (medically) insured.

All true, but the tax authority (Belastingdienst) in The Netherlands doesn't know he is living in Indonesia as a citizen on a Kitap. As far as they (gemeente, belastingdienst en ziektenkostenverzekeraar) know, he is on holiday abroad.

When he send in a M-form (migratieformulier), then the tax authority will make a decision. Same applies to the 'gemeente'. He needs to to tell them he will leave the country, meaning immigrate. Then, the gemeente will delete him from the 'basisregistratie personen BPR'.

For now, the Belastingdienst will send him every year a notice to report his income. And let him pay tax in The Netherlands. How much? As zzp-er he has a lot of tax deductions (operational costs, startersaftrek, zelfstandigenaftrek). Likely, his tax is less than 30% of his income.

Then, if he reports his income also in Indonesia he has to pay additional tax; even with the tax paid in The Netherlands as credit.

Ya Allah!

 

[jstar]

But it’s a sword of Damocles, @Samoerai . I had similar discussions at the time with the European tax authorities and also with health insurance. Also, from an Indonesian perspective it’s probably just a matter of time before they realize there could be money to be made.

 

[Samoerai]

But it’s a sword of Damocles, @Samoerai . I had similar discussions at the time with the European tax authorities and also with health insurance. Also, from an Indonesian perspective it’s probably just a matter of time before they realize there could be money to be made.

Yes, just a matter of time. I agree.

Someone will notice this particular situation. Maybe someone in Holland might notice the long stay overs in Indonesia (gemeente/health insurance) every year. Maybe someone in Indonesia? Rat on him.

Also in this digital era, much easier to check when someone leaves the country and comes back.

That's why he better not disclose too much about his situation, here on a online open forum.

 

[Dave70]

8. In Indonesia I have ITAP status and have an active NPWP.

Why, why, why did you apply for NPWP ???

You don't need one if you are not working (formally) in Indonesia.

 

[snpark]

But he is working here

 

[snpark]

And without NPWP no chance to get a credit card

 

[Samoerai]

But he is working here

Precisely, he working here in Indonesia like a nomad. Maybe in Bali and online. His clients are in Holland and he's paid by them in euros on his bankaccount in Holland.

So, according to tax laws (Indonesian, Dutch and treaty) he has to report his wordwide income in Indonesia.

See article 1 (3)a

UNDANG

 

[jstar]

Ya, the keywords here are vaste inrichting* Which means more or less where you’re based when you work. So where your office is.

The banks just work with what you tell them; if you say you have a fiscal address in NL and your ID card confirms that, they accept that. Unless you’re giving them Indonesian telephone numbers etc. of course.

* Vaste inrichting (quick & dirty translation):

For the purposes of this treaty, the term 'permanent establishment' means a permanent establishment in which the activities of the undertaking are carried out in whole or in part.

The expression 'permanent establishment' includes in particular:
A place where leadership is given;
A branch;
An office;
A factory;
A workshop;
A farm or plantation;
A mine, an oil source, a quarry or any other place where natural resources are extracted.

The expression 'fixed establishment' also includes:

A place of execution of a construction project, of construction, assembly or installation work, or related work of a supervisory nature, but only if the duration of that structure or work exceeds a period of six months;

The provision of services, including services of an advisory nature, by an undertaking through an employee or other personnel entrusted with it by the undertaking, but only if such work (for the same or related project) is carried out in the country during a period or periods exceeding a total of three months in a period of twelve months.

And this makes it more blurry again;

The person is deemed to be a resident of the State where the place of his actual management and leadership is located. If the competent authorities of the two States consider that there is a place of actual leadership in both States, they shall arrange the matter by mutual agreement.

 

[Samoerai]

Ya, the keywords here are vaste inrichting* Which means more or less where you’re based when you work. So where your office is.

The banks just work with what you tell them; if you say you have a fiscal address in NL and your ID card confirms that, they accept that. Unless you’re giving them Indonesian telephone numbers etc. of course.

* Vaste inrichting (quick & dirty translation):


And this makes it more blurry again;

Yes. Where will you be taxed? See pag 275

https://download.belastingdienst.nl/belastingdienst/docs/handboek-loonheffingen-lh0221t32fd.pdf

Note: this of course when you disclose your citizenship in Indonesia.
To avoid these complication, you can avoid taxation by just leaving the country on day 180.

 

[Robert100]

Hi all,

I have a question that kind of is related to this topic. It needs a little bit of explaining, so please bear with me.

Situation:
1. I live in Indonesia (on a ITAP) for about 8 months a year.
2. I live in the Netherlands (as a Dutch national) for 4 months a year.
3. I am a sole proprietor (in Dutch: ZZP-er) with a registered company in the Netherlands and with a Dutch company and tax number.
4. I pay my company's (VAT) and personal income taxes in the Netherlands.
5. My clients all are European clients
6. Because I live 8 months a year in Indonesia, I work out of Indonesia for 8 months of the year
7. Because I live 4 months a year in the Netherlands, I work out of the Netherlands for 4 months of the year.
8. In Indonesia I have ITAP status and have an active NPWP.

I live in the Netherlands for 4 months because that's the minimum time I need to spend there to be able to be registered as a citizen in the Municipal Registry, which I in turn need to be covered by the Dutch health-insurance system (I need the coverage due to my health condition).

Is there anything I need to do differently in terms of paying my taxes?

Do I need to file a report here in Indonesia? Do I need to pay (part of my, for example income tax) to the Indonesian tax office?

Is there anyone who can please help me with figuring this out, as I do not want to get in trouble with any tax authority either here in Indonesia, or back home in the Netherlands...

Thank you in advance.
- STH1984

By the law, you most certainly are Indonesian tax resident and taxed on world wide income, including any income earned abroad. Unless your family , your immediate family , and your house and most of your belongings and hobbies are all in Holland. However even if this is the the case, you would not be able to have a residence in Indonesia not even an annual lease or a car etc, in order to not be seen as INdonesian tax payer on full world wide in come. The 8 months is just clearly the center of your live and not the 4 months ;and furhtermore by Indonesian law you fall well above the 183 days and your visa also shows clear intention to live here.
Now how the local tax official sees it is another story..that I cannot comment on. Also be aware that once you make this tax emigration offical in Holland you would have exited the tax system and you should research what this implies..
if you in too much trouble consider dialing it down to 6 month 6 months.. but don't live your live accoring to tax.. it's not worth it ..

 

[pantaiema]

@STH1984, the information you provided suggests that you are an Indonesian tax resident with taxable income. Therefore, the answer to all your questions is "YES." However, you should verify this with the Directorate General of Taxes (Dirjen Pajak), the Indonesian government agency under the Ministry of Finance responsible for taxation. Also I believe you might already aware that Indonesia adopt a worldwide taxation where incomes including any income earned abroad are subject to taxation in Indonesia, taking into account the DTA agreement.

Here is their website: https://www.pajak.go.id/

You can reach by calling them, via email or their Twitter account.

When you get a response, obtain it in writing (email or online chat) so you can reference it later if needed. Be prepared for the possibility of receiving different answers from different representatives, or no reply at all.

Additionally, be aware that asking them might require you to disclose information you might prefer to keep private.

 

[Brian]

Transferring money from your American checking account to your Indonesian bank account for buying a house shouldn't be seen as income, so you generally wouldn't be taxed on it as income. It's more about the source of the funds and ensuring they're properly documented if needed.