Why so complicated to open bank account in Indonesia for foreigners

[Helpful Herbert]

Well that is my personal set up here with the tax office and immigration etc for many years.
I am a Director of a PT here and I declare that as my salary and pay $3000 a year to the tax people but obviously my income is a lot more but that is what I "declare" and I use offshore banks for other income and some clients even pay me cash. I've never yet had any problems regarding my immigration status or income / salary / tax etc and I have a npwp and get paperwork every year from customs / tax people in the dreaded brown envelope. I pay my tax the same time I renew my kitas. I remember years ago my agent sent me / showed me some paperwork from tax office about min salary requirements for director / imta etc.

That's my personal situation and circumstances so maybe it has changed now.
I will ask her for a link but that's what I declare and pay and they seem happy with that despite even a cursory look at my bank statements would show I earn more than that.

Tax on interest earned (with Hsbc) is 20% but if you have npwp then you pay only 10% (they credit it back)

I'm single no kids on a normal kitas imta local company PT etc.

You're a brave man to write that on here while using your real name!

 

[yantiharun1]

Yes of course, if you are working here you pay tax right? Even retired people are supposed to declare a minimum income to retire here, and you need a NPWP and tax ID usually to get credit here, like a credit card. They would be suspicious if you applied for an IMTA and KITAS and then did not pay ANY tax?
As such there is a minimum you are supposed to declare - a director of a PT is supposed to earn a minimum of $2,500 a month and pay 10% tax - $250 a month.
With a tax number you then pay less tax on your bank account interest - well at least with HSBC you do anyway - I get taxed 10% instead of 20% on my savings (I mean on the interest I receive)

I am not working here and I am not sure where to get the NPWP no. Thanks for the info.

 

[snpark]

I am not working here and I am not sure where to get the NPWP no. Thanks for the info.

Usually done some time as Kitas etc, you can get away first year without npwp but for renewal they insist
I thought even on a retirement kitas you are supposed to have some sort of income ?
Are you on a spouse sponsored one?

 

[snpark]

You're a brave man to write that on here while using your real name!

Thanks for the concern but I will be ok I think
Plenty of ways to explain what the money is and from etc etc

 

[centurion]

@snpark
Honest from your side. Not like some others bragging about the deported US girl that did "not paid Indonesian taxes on her income".

 

[snpark]

Well I pay legally what is the minimum required

Sure I could pay more but who does that

Avoiding tax and evading tax are 2 different things.
I spend a lot here and contribute to the economy and also employ people here with my businesses
So they get tax revenue from me in other means

 

[Ruserious]

Well I pay legally what is the minimum required

Come on snpark. You described being paid in cash off the books, you described being paid a lot more than you declare and using offshore banks to hide the money. If you are not declaring this then it is not legal.

Up to you if you want to do this and brag about it here but don't pretend that you are paying the legal minimum as you are not.

 

[snpark]

The legal minimum to be a director of a PT

It's like opening a PMA and offering to keep $2m in paid up capital instead of $1m.

I dont know anyone who pays more tax than they have to legally

There are plenty of reasons to explain receiving cash amounts and not having to pay tax on it

 

[Ruserious]

The legal minimum to be a director of a PT

Honestly snpark I've read your posts over the years and I know you are smarter than this. You are declaring the minimum amount to avoid any questions on what your actual income is, anything below that amount would be suspicious for a director. That does not mean you are paying the legal correct amount of tax as you should be declaring all your income.

Based on other posts you made I presume your actual earnings is at least 2x or more likely 4x this amount, so go ahead tell us reasons why you would be receiving that much cash on a regular basis and not call it earnings .

You seem to be trying to convince yourself you are not committing tax fraud but you definitely are. If that's what you want to do then ok but do not pretend it's legal.

 

[Helpful Herbert]

Luckily for snpark there is a new tax amnesty coming up and all sins will be forgiven (again)

 

[snpark]

An example could be repayments on loans I gave it previously

That is not taxable income, it is not rent
Or it could be money withdrawn from savings overseas to pay for construction or a property purchase in Indonesia

There are multiple legal ways to explain away money being received in Indonesia, even in cash.
Also it does not even have to be deposited in cash in your account, there are other ways to add money to your account, all perfectly legal

And again, I am not "bragging" I work in finance and I have been here a long time, legally, and have all the right legal set ups regarding my tax, visa status, etc. I am just sharing some advice and personal anecdotes.

Even Trump can get away with only paying $750 a year in taxes, and he is probably worth more than me and I pay more tax than he does.

Feel free to assume or judge but it is not cockiness or arrogance, this is my own personal set up, the banks are aware of it and they seem perfectly content. I have never missed a credit card payment or been late, I keep cash in accounts with them and pay my taxes. Once years ago I was asked for a salary letter and I said sorry I don't have one. They said ok no problem. Sometimes after a transfer arrives BCA might call me and say what was the reason for this deposit and I will give them a reason and again they are happy.

Ok anyway, interview over, back to topic.

Generally speaking a KITAS IMTA and NPWP is necessary to open a checking account here.

I recommend BCA for domestic and HSBC for international.

 

[snpark]

Luckily for snpark there is a new tax amnesty coming up and all sins will be forgiven (again)

Love me a tax amnesty, all my clients suddenly have new funds need investing somewhere

 

[centurion]

As I said, @snpark is just honest. I do not know personally anybody who has overseas income and who does report that and pay tax in Indonesia by a rate of up to 30% (and soon up to 35% as proposed by the Ministry of Finance).

Indonesia has a worldwide taxation system, meaning all offshore pensions for retirees have to be taxed by that rate, all rents that are collected abroad, contracts, dividends, and any other revenue (minus tax credits if any by double taxation treaty). Before throwing stones, ask yourself did you report everything from offshore, or only your tax on salary was paid and that is your "paying Indonesian taxes" and "respecting the laws of the country"?

This does not mean that I suggest non-compliance, but the upcoming tax amnesty just confirmes that this approach is the most opportunistic.

 

[Ruserious]

Before throwing stones

Again I have no problem if he wants to take this approach but he keeps claiming it's legal. He has said he under declares and gets clients to pay him cash off the books. He then said if challenged he knows of ways to account for that money, effectively lying to the tax man. He can do whatever he wants but this is literally the definition of tax fraud so he is not being honest when he says it's legal.

Yes I know most people do it and that's up to them, but let's not pretend its legal.

 

[yantiharun1]

Usually done some time as Kitas etc, you can get away first year without npwp but for renewal they insist
I thought even on a retirement kitas you are supposed to have some sort of income ?
Are you on a spouse sponsored one?

I am on family sponsor Kitap

 

[yantiharun1]

Back when they were pushing the NPWP and signing up for it during the last Tax Amnesty I went to the tax office and they told me no need to sign up with just social security. So, I have no NPWP number or card since they said it wasn't needed.

So without NPWP, were you able to open local bank account in Indonesia?

 

[centurion]

So without NPWP, were you able to open local bank account in Indonesia?

You are able to open bank account without NPWP.

 

[snpark]

Usually only a savings account. Not checking and no credit facilities etc
And can even get kitas with no npwp first year. But renewal they insist. That's what my agent said anyway

 

[centurion]

Usually only a savings account. Not checking and no credit facilities etc
And can even get kitas with no npwp first year. But renewal they insist. That's what my agent said anyway

Npwp for work kitas extension(actually for work permit extension only).

 

[Hawk256]

Usually only a savings account. Not checking and no credit facilities etc
And can even get kitas with no npwp first year. But renewal they insist. That's what my agent said anyway

You agent is wrong.