Remote work with a spouse KITAS visa - the how

[pantaiema]

Whenever I read DTA texts, I wonder whether there is no better linguistic solution than the constant usage of "in that state" and "in the other state". I find DTAs to be one of the most annoying legal texts to read!

@pantaiema
I share your opinion: DON'T TRUST AI!
It would have been nice though if you had not just shared the AI replies, but also pointed out how this is a nice example of hallucinating AI and what absurdly wrong statements it produces:

Tax Treaty Source:
View attachment 5277
ChatGPT cannot even read this Article and creates this absurd statement:
"If you live in Indonesia (and are a tax resident): Your Australian pension is likely to be
taxable in Indonesia, but the double tax treaty limits how much Indonesia can tax it
(max 15%)."

It's clearly not true.
The max. 15% taxable is for Australia, Indonesia can fully tax it.
The logic of DTA is that an additional Indonesian % tax rates (i.e. progressive income tax rates that bring you to higher brackets) would be deducted by the 15% that you already paid in Australia. Hence, avoiding a double tax of that 15% part.

DTA doesn't mean that only one of the two countries can tax you for the same income source/type in general.

As I’ve already emphasized, the key issue is determining in which countries you are considered a tax resident. The “183-day rule” is explicitly stated in the tax laws of many countries, not only Indonesia. Since a year has only 365 days. So If looking into this criteria alone noone can be the tax resident of two countries.

To confirm whether foreign income are exempt from taxation in Indonesia as some people in this thread argue, there must be an authoritative reference such as a law, regulation, or a relevant treaty like a Double Tax Agreement (DTA) that specifically states this.

Tax laws from Australia or any other country have no jurisdiction (legal effect) in Indonesia if you are an Indonesian tax resident. Their provisions only matter if a bilateral treaty, such as a DTA, or another international treaty overrules them. But as you say DTA doesn't explicitly say that only one of the two countries can tax you. But it can be credited to the country where you are the tax resident. From the Indonesian inciome tax law counterpart, it is clearly stated in here: Law No. 7 Year 1983 About income Tax Article 24

"Domestic resident taxpayers are subject to tax on all income wherever derived, including income obtained from sources of income abroad.

Income obtained from abroad is automatically subject to tax by the country of origin of the income. Income Tax that has been paid in the foreign country can be credited against all Income Tax payable, as long as it concerns the same tax year."

 

[mas_dam]

My point was solely about the crap AI responses that are getting posted here. No advice is better than this kind of bad advice. Especially if it's (re)-posted. A lie or false information repeated by a trusted source is more dangerous than the same information from an unknown source.

 

[mas_dam]

the key issue is determining in which countries you are considered a tax resident.

Correct.

And because we are in Indonesia:
Knowing the implementation and reality is almost as important as knowing the (theoretical) rule.

The “183-day rule” is explicitly stated in the tax laws of many countries, not only Indonesia. Since a year has only 365 days. So If looking into this criteria alone noone can be the tax resident of two countries.

This is also misleading advice.
Dual tax residency often occurs.

i.e. if I take your example for another country that also applies the 183 days rules.
If you stayed >183 days in that country (let's say 01.01. until 31.08.), and then move 01.09. to Indonesia. If you have the plan to stay in Indonesia, you are tax residence for this year even with <183 days:

Nr. 3 below:

Let alone all the countries with clauses where property ownership can make you a tax resident etc.. But that's why nobody should expect good tax advice here. Dangerous, very dangerous.

 

[pantaiema]

Correct.

And because we are in Indonesia:
Knowing the implementation and reality is almost as important as knowing the (theoretical) rule.


This is also misleading advice.
Dual tax residency often occurs.

i.e. if I take your example for another country that also applies the 183 days rules.
If you stayed >183 days in that country (let's say 01.01. until 31.08.), and then move 01.09. to Indonesia. If you have the plan to stay in Indonesia, you are tax residence for this year even with <183 days:

Nr. 3 below:
View attachment 5278

Let alone all the countries with clauses where property ownership can make you a tax resident etc.. But that's why nobody should expect good tax advice here. Dangerous, very dangerous.

Reread my earlier post #42. Tax residency is also determined by your actual residence and your intention to stay in that country. An ITAS or ITAP is a stay/residence permit, so if you hold an ITAS/ITAP and intend to live in Indonesia, then you are an Indonesian tax resident, even you spend less than 183 days in Indonesia for a particular year. Did I ever claim otherwise ?

The 183-day rule for tax residency applies even to individuals who do not have an ITAS/ITAP but they have lived in Indonesia for 183+ days.

Also just to let you know, WhatsApp responses have been used as evidence in courtroom in Indonesia. There are a lot of instances where the WA have been used in high profile cases in the courtroom in Indonesia. However, their validity often depends on thorough examination by a telecommunications expert witness. All you need to do is read the news.

 

[mas_dam]

Seems to be your hobby* to argue about things/whataboutisms.
(*Save your breath.... no need to reply and tell me where you ever said that gardening is your hobby or whatever ;-) That's not the point.)

I stay with it, I think this is poor advice:

The “183-day rule” is explicitly stated in the tax laws of many countries, not only Indonesia. Since a year has only 365 days. So If looking into this criteria alone noone can be the tax resident of two countries.

Your #42 post is also misleading.
There are tons of people with ITAS without being Indonesian Tax Resident.

Reread my earlier post #42. Tax residency is also determined by your actual residence.

Having an ITAS/ITAP you are considered a tax resident of Indonesia.

By the way, a piece of relevant advice for those who think: "Do I need to be concerned?"

If you tell/told your bank in another country that your (tax) residence is in Indonesia, your bank will report via CRS/Common Reporting Standard to Indonesian tax authorities:
1. Your Balance on 31.12./last banking day of the year
2. Total amount of profit from financial transactions with the bank (interest, stock sales, dividends etc.).

Indonesian tax office doesn't receive the breakdown or details.

Tax office will be curious about
- any balance increases YOY 31.12.
(There are very few cases for a YOY balance increase that don't have an underlying taxable income event. One such example would be a tax-free gift or inheritance from your parents,
and
- any banking profit, which you are supposed to self-declare as income on your SPT, and deposit income tax for independently.

 

[pantaiema]

Seems to be your hobby* to argue about things/whataboutisms.
(*Save your breath.... no need to reply and tell me where you ever said that gardening is your hobby or whatever ;-) That's not the point.)

I stay with it, I think this is poor advice:


Your #42 post is also misleading.
There are tons of people with ITAS without being Indonesian Tax Resident.


By the way, a piece of relevant advice for those who think: "Do I need to be concerned?"

If you tell/told your bank in another country that your (tax) residence is in Indonesia, your bank will report via CRS/Common Reporting Standard to Indonesian tax authorities:
1. Your Balance on 31.12./last banking day of the year
2. Total amount of profit from financial transactions with the bank (interest, stock sales, dividends etc.).

Indonesian tax office doesn't receive the breakdown or details.

Tax office will be curious about
- any balance increases YOY 31.12.
(There are very few cases for a YOY balance increase that don't have an underlying taxable income event. One such example would be a tax-free gift or inheritance from your parents,
and
- any banking profit, which you are supposed to self-declare as income on your SPT, and deposit income tax for independently.

Similarly it seems your hobby is to claim someone is misleading another person.
You’re entitled to your opinion and If you disagree with something, you’re free to rebuff it.

Regarding the statement:
“There are many people who hold an ITAS without being Indonesian tax residents.”
Again you claimed I was misleading people where It is clearly stated in the post you are refering to (post #42)..

" ... so if you hold an ITAS/ITAP and intend to live in Indonesia, then you are an Indonesian tax resident, even you spend less than 183 days in Indonesia for a particular year. ''

The key question is whether they actually intend to live in Indonesia. If someone obtains an ITAS or ITAP but later decide not to reside in Indonesia, that becomes a different situation.

There are a few known cases (also reported in here) where individuals marry an Indonesian citizen, obtain an ITAS, but later decide to return to their home country and request an EPO. By applying an EPO they have explicitly shown their intention to permanently leave Indonesia and cancel their stay permit.

 

[harryopal1]

This is all rather complicated and depressing. Overall it seems one should be paying tax on an Australian aged pension. We have read that Indonesia has not historically taxed foreigners pensions.

Are there forum membes on pensions and are you presently paying Indonesian taxes?

So even at the present moment the accumulated tax due for the period I have been here is nearly double my present reserve funds.

The options seem to be. 1 Stay in Indonesia register for tax with the uncertainty as to how my "avoidance" will be treated. A penalty 4 times the overdue tax and possible gaol.

2 Stay in Indonesia, keep my head down and hope I can continued unregistered for tax.

3 Leave Indonesia to avoid penalties and return to Australia, leave my wife and live in a van in Australia.

At 86 years of age this all looks rather bleak. What do tax agens charge? Even going to a tax agent puts one in a very vulnerable position if the agent is dodgy.

Comments?

 

[marcus]

Overall it seems one should be paying tax on an Australian aged pension.

Yes , according to the Law & your country/Indonesia Tax Agreement .

We have read that Indonesia has not historically taxed foreigners pensions.

It seems so . I personally asked 3 Indonesian Tax Offices in the past and they all told me that it was not necessary to declare my incomes abroad if I do not work in Indonesia (I am not sure but the last time I asked was last year when I requested my NIK to become my NPWP) .

Are there forum members on pensions and are you presently paying Indonesian taxes?

I myself am not paying .

So even at the present moment the accumulated tax due for the period I have been here is nearly double my present reserve funds.

They will consider 10 years maximum , according to the article below .

1. Stay in Indonesia register for tax with the uncertainty as to how my "avoidance" will be treated. A penalty 4 times the overdue tax and possible gaol.

See article below .

3. Leave Indonesia to avoid penalties and return to Australia, leave my wife and live in a van in Australia.

I will not leave .

Even going to a tax agent puts one in a very vulnerable position if the agent is dodgy.

I suggest you and others to first ask your local Kantor Pajak/Tax Office . Face-to-face will need to get a queue no. at https://kunjung.pajak.go.id/ ; online : Twitter @kring_pajak; email [email protected] for tax information; and Live Chat on the website www.pajak.go.id .

All times when I went there (not online) , they were kind & helpful .


--------------------------------------------

From https://izin.co.id/indonesia-business-tips/2025/02/07/apa-sanksi-tidak-membayar-pajak/
Title : Sanctions for Non-Payment of Taxes: A Complete Guide According to Indonesian Law , February 2025 - free translation
By Rifda
..........
1. Administrative Sanctions: ... fines, interest, or tax increases ...
2. Criminal Sanctions imposed if a taxpayer intentionally evades tax obligations. These provisions are regulated in Articles 38 and 39 of the KUP Law:

Article 38: Taxpayers who fail to submit a Tax Return Report or submit it with inaccurate data, resulting in losses to the state, may be subject to criminal penalties of up to 1 year imprisonment and/or a maximum fine of twice the amount of tax owed.

Article 39: Taxpayers who intentionally fail to pay taxes may be subject to a maximum prison sentence of 6 years and a maximum fine of 4 times the amount of tax owed.
.........

------------------------------

From https://klikpajak.id/blog/sanksi-atas-pajak-penghasilan/
Title : Penalties for Failure to Pay Income Tax , updated in Dec 2024
By Angga Dwijayanto
..........
Tax crimes cannot be prosecuted after a 10-year period, even if they may result in losses to state revenue ...

 

[Balifrog]

This is all rather complicated and depressing. Overall it seems one should be paying tax on an Australian aged pension. We have read that Indonesia has not historically taxed foreigners pensions.

Are there forum membes on pensions and are you presently paying Indonesian taxes?

So even at the present moment the accumulated tax due for the period I have been here is nearly double my present reserve funds.

The options seem to be. 1 Stay in Indonesia register for tax with the uncertainty as to how my "avoidance" will be treated. A penalty 4 times the overdue tax and possible gaol.

2 Stay in Indonesia, keep my head down and hope I can continued unregistered for tax.

3 Leave Indonesia to avoid penalties and return to Australia, leave my wife and live in a van in Australia.

At 86 years of age this all looks rather bleak. What do tax agens charge? Even going to a tax agent puts one in a very vulnerable position if the agent is dodgy.

Comments?

You think too much.
Keep it simple.....

 

[harryopal1]

You think too much.
Keep it simple.....

Meaning?

 

[marcus]

.... can you provide any reference to this statement. "...I believe that Indonesia still doesn't want to enforce the Tax Law on foreigners not receiving work income from Indonesian based companies , because this would decrease the foreigners' interest to live in Indonesia (this was verbally stated by the last year's Finance Minister".

It is important to say that I didn't see this proposal being in the final approved Omnibus Law (UU no.11 Year 2020) or at its revised version (UU no.6 Year 2023) , it seems that this idea was only used for a temporary 4 years exemption for specific type of foreign workers .


-------------------------------------------------

From https://www.ssas.co.id/wna-yang-tin...-indonesia-bakal-dikenakan-pajak-penghasilan/
Title : Foreign nationals who live in Indonesia for more than 6 months will be subject to income tax - free translation
By KONTAN.CO.ID , October 2020

Announcement for Foreigners: Going forward, the government will levy income tax on income earned in Indonesia...

Finance Minister Sri Mulyani Indrawati stated that this policy was implemented because the government has changed the provisions for individual taxpayers from the worldwide system to the territorial system.

This policy is contained in the Draft Omnibus Law on Job Creation, which was enacted on October 5th...

The income tax for foreigners, who are domestic/resident tax subjects, is based on their income from Indonesia. Therefore, we do not tax Indonesians who have income sourced from abroad, only income from Indonesia," said Minister of Finance Sri Mulyani at a press conference on the Omnibus Law on Job Creation on October 7...

Sri Mulyani emphasized that the territorial system makes the taxation system fairer. "This is what is called the territorial principle; wherever they are, they are taxed," said the Minister.

------------------------------

From https://www.lincolnglobalpartners.c...untries-with-no-income-tax-on-foreign-income/
Title : Territorial Taxation: 10 Countries with No Income Tax on Foreign Income -
By Georgea Rios , March 2025

... Here’s the beauty of territorial taxation: You only pay taxes on money made from local sources inside that country. All income sourced outside the country? Tax-free. For online business owners, remote workers, and investors working across borders, this changes everything...

Your foreign clients in the US, UK, and Germany send you payments ... – and that money remains tax-free. The only time you pay tax is when you make money from local clients ...

Territorial tax systems allow foreign investors and entrepreneurs to avoid domestic taxes on income earned abroad, making it an attractive option for travelers, nomads, and other global citizens...

But it’s not just about the rates anymore. The documentation is getting out of hand too. Banks now share your financial details across borders thanks to global agreements like the Common Reporting Standard. Gone are the days when you could quietly manage your money and maintain privacy over your own investments...

Top Territorial Tax Jurisdictions and Low Tax Jurisdictions : Singapore , Malaysia , Hong Kong , Georgia , Malta , Uruguay , Paraguay , Panama , Costa Rica , and Nicaragua.
........

 

[harryopal1]

It is important to say that I didn't see this proposal being in the final approved Omnibus Law (UU no.11 Year 2020) or at its revised version (UU no.6 Year 2023) , it seems that this idea was only used for a temporary 4 years exemption for specific type of foreign workers .


-------------------------------------------------

From https://www.ssas.co.id/wna-yang-tin...-indonesia-bakal-dikenakan-pajak-penghasilan/
Title : Foreign nationals who live in Indonesia for more than 6 months will be subject to income tax - free translation
By KONTAN.CO.ID , October 2020

Announcement for Foreigners: Going forward, the government will levy income tax on income earned in Indonesia.

This provision applies if the foreigners stays in Indonesia for more than 183 days, or approximately six months.

Finance Minister Sri Mulyani Indrawati stated that this policy was implemented because the government has changed the provisions for individual taxpayers from the worldwide system to the territorial system.

This policy is contained in the Draft Omnibus Law on Job Creation, which was enacted on October 5th...

The income tax for foreigners, who are domestic/resident tax subjects, is based on their income from Indonesia. Therefore, we do not tax Indonesians who have income sourced from abroad, only income from Indonesia," said Minister of Finance Sri Mulyani at a press conference on the Omnibus Law on Job Creation on October 7...

Sri Mulyani emphasized that the territorial system makes the taxation system fairer. "This is what is called the territorial principle; wherever they are, they are taxed," said the Minister.

"

Therefore, we do not tax Indonesians who have income sourced from abroad, only income from Indonesia," And what then is the situation for foreigners. Will they not be taxed on income from abroad?

 

[marcus]

And what then is the situation for foreigners. Will they not be taxed on income from abroad?

Repeating : we foreigners domestic/resident taxpayers in Indonesia are subjected to income tax on worldwide income(s) , according to the Law . But it seems this rule has not been enforced yet on foreigners neither working nor having business in Indonesia .

 

[harryopal1]

So, fingers crossed!

 

[pantaiema]

Repeating : we foreigners domestic/resident taxpayers in Indonesia are subjected to income tax on worldwide income(s) , according to the Law . But it seems this rule has not been enforced yet on foreigners neither working nor having business in Indonesia .

So, fingers crossed!

I have read the stories people renting their properties abroad, earn rental income from their properties abroad while residing in Indonesia, get summoned by the Indonesian tax authorities. Probably, these people get caught because someone they know are reporting them, they are flaunting their lifestyles on sosmeds, and/or Indonesian tax authority could track the advertisement online.

Other than this, my understanding is that the Indonesian tax authorities do not have a good track record in finding it by themselves. But people who want to play this game will need to do it with their own risk. But life is full with calculated risk anyway isn't it ? You invest in stock market, it is also about risk calculation.

Therefore, we do not tax Indonesians who have income sourced from abroad, only income from Indonesia," And what then is the situation for foreigners. Will they not be taxed on income from abroad?

I wonder where does this bold statement written in the law/regulation ? IMO This will need to be seen from the context whether they are Indonesian Tax resident or not, per above discussion.

 

[marcus]

... people renting their properties abroad, earn rental income from their properties abroad while residing in Indonesia, get summoned by the Indonesian tax authorities...

Could you give us more details about , like :

• did/do they work and/or had/have business in Indonesia ?
• from where or from who you got this information ?
• how the Tax Office knew that they rented their properties ?

I wonder where does this bold statement written in the law/regulation ? ...

Not from law/regulation , it was posted in post no.71 above , from an article :
... Therefore, we do not tax Indonesians who have income sourced from abroad, only income from Indonesia," said Minister of Finance Sri Mulyani at a press conference on the Omnibus Law on Job Creation on October 7 (2020) ...

 

[pantaiema]

Could you give us more details about , like :

• did/do they work and/or had/have business in Indonesia ?
• from where or from who you got this information ?
• how the Tax Office knew that they rented their properties ?

Not from law/regulation , it was posted in post no.71 above , from an article :
... Therefore, we do not tax Indonesians who have income sourced from abroad, only income from Indonesia," said Minister of Finance Sri Mulyani at a press conference on the Omnibus Law on Job Creation on October 7 (2020) ...

People wrote it in the discussion forum and asked for advice the best approach before they met the tax officials. I thought I saved the print screen but I could not find it anymore.

Regarding territorial vs worldwide taxation system. what people need to be careful here is that when a minister makes a comment in the media before the actual regulation / law is issued, you will need to take it with a pinch of salt. You will only know it for sure once the new law/regulation is issued.

A good example here is the new visa index for ex-Indonesian E32E, the former minister as well as the current minister describe it similar to OCI, in the meeting with Indonesians diaspora, and in the press conference. but once issued, it is not anywhere near to OCI (Indian version).

In Indonesia it is hardly (if any) a minister is getting sacked by making misleading comment in public, and/or in the press. There are already a few examples of this posted in this forum.

 

[pantaiema]

This is not the same with rental income that I mentioned previously. But this also serves as an example of someone has been summoned by DJP (See Attached) for not reporting their asset abroad, available in this thread.

Tax in the New Era

No, it was less than USD 10K. I think this must have been information sharing between governments.

www.expatindo.org

Tax Reporting for Overseas Property & Income

You sure about that (bolded) part? Do you have a source? Based on the Wiki entry below, this may no longer be true for some situations. As always consult your own professional regarding taxation issues. https://en.wikipedia.org/wiki/Expatriation_tax#United_States The first U.S. income tax...

www.expatindo.org

KPP BADORA is The Permanent Establishment and Expatriate Tax Office within the division of Directorate General of tax authority (DJP) in Indonesia. This is their website.

Building Positive Partnerships, The Permanent Establishment and Expatriate Tax Office Welcomes Visit from IKPI Jakarta

www.pajak.go.id

 

[Helpful Herbert]

This is all rather complicated and depressing. Overall it seems one should be paying tax on an Australian aged pension. We have read that Indonesia has not historically taxed foreigners pensions.

Are there forum membes on pensions and are you presently paying Indonesian taxes?

So even at the present moment the accumulated tax due for the period I have been here is nearly double my present reserve funds.

The options seem to be. 1 Stay in Indonesia register for tax with the uncertainty as to how my "avoidance" will be treated. A penalty 4 times the overdue tax and possible gaol.

2 Stay in Indonesia, keep my head down and hope I can continued unregistered for tax.

3 Leave Indonesia to avoid penalties and return to Australia, leave my wife and live in a van in Australia.

At 86 years of age this all looks rather bleak. What do tax agens charge? Even going to a tax agent puts one in a very vulnerable position if the agent is dodgy.

Comments?

Definitely number two is the best option. If you weren't on this forum you wouldn't even know about this issue same as 99% of foreign pensioners living here.
The chances of the Indonesian tax authority coming after an 86-year-old for tax on his foreign pension are zero.

 

[harryopal1]

Definitely number two is the best option. If you weren't on this forum you wouldn't even know about this issue same as 99% of foreign pensioners living here.
The chances of the Indonesian tax authority coming after an 86-year-old for tax on his foreign pension are zero.

Thank you. I prefer to think you are right. My mood hasn't been much helped by recently having my Westpac Bank acting for the tax department in Australia chasing me over the last few weeks for information about my status here. Seeking information about a whole lot of stuff which I don't have. I provided info where possible and explained where I could not provide what was asked for. Each reply I sent was then answered by a different person so it seemed each new enquiry had not been preceded by that officer bothering to check my previous email replies.

Last information sought was for a copy of my Queensland driver's licence. I have a valid licence but have not lived in Queensland now for nine years. However I sent a copy and today they said all was done and they had updated their files. Phewww!