Expatriate tax ebook - Indonesia

What taxes?

Capital gains tax
Inheritance, estate and gift taxes
Investment income
Local taxes
Real estate taxes
Social security taxes
Stock options
Wealth taxes
Other specific taxes

Capital gains tax
Gains from the disposal of listed shares are subject to final tax at 0.1% of the gross proceeds (plus 0.5% of IPO price if founders' shares), while gains from the disposal of unlisted shares are subject to ordinary income tax. Disposal of land and buildings is subject to 5% final income tax on the gross selling price. Minimum selling prices for land and buildings are determined by the government.

Investment income
Generally, investment income is aggregated with other types of income and subject to tax based on the tax rates set out above.
Some kinds of investment are subject to final income tax:

• interest derived from bank deposits is subject to 20% final income tax;
• rent income from land and/or buildings, including office space, is subject to 10% final income tax.

Local taxes
There are no local taxes imposed on the income of expatriates in Indonesia, but expatriates have to pay expatriates' tax to the local government. The amount is immaterial.

Real estate tax
Real estate tax does not apply to expatriates in Indonesia.

Social security taxes
Social security coverage is compulsory for all Indonesian employees. Expatriates have the option to enrol in the social security system.

Stock options
Gains from stock options are subject to individual income tax at the same tax rates noted under the facts and figures section.

Wealth tax
There are no wealth taxes in Indonesia. However, tax on land and buildings is imposed on expatriates (also companies) who possess land rights and/or buildings.

Other specific taxes
Indonesian tax residents, including expatriates, are subject to fiscal (exit) tax when departing Indonesia by air, land, and sea at IDR1,000,000, IDR500,000 and IDR200,000, respectively. The fiscal exit tax may be used as credit against income tax due at the end of the year subject to certain requirements. Also, certain exemptions may apply.

Information about Indonesia:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities