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Guide to Foreigners on Personal Income Taxation in Indonesia

Besides for Indonesian citizens, there are also taxes for Foreign Citizens. In Indonesia, taxpayers are classified into two main groups: domestic taxpayers and foreign taxpayers. Domestic taxpayers also include foreigners who reside in Indonesia for more than 183 (one hundred eighty-three) days within a 12 (twelve)-month period (not necessarily consecutively) or those who stay in Indonesia during a tax year with the intention of establishing residence. Conversely, foreigners staying in Indonesia for less than 183 (one hundred eighty-three) days within a 12 (twelve)-month period are considered “foreign taxpayers”.

All foreigners who earn income higher than the non-taxable income threshold are bound by Indonesia’s personal income tax regulations. There are 2 (two) types of personal income tax as regulated in Personal Income Tax Article 21 (“PPh 21”) and Article 26 (“PPh 26”). The former is for domestic taxpayers while the latter is for foreign taxpayers.

PPh 21

Foreigners working in Indonesia with a Limited Stay Permit are subject to PPh 21. Although not mandatory, foreigners with Limited Stay Permit are strongly encouraged to apply for Tax Identification Number (“TIN”) because not having TIN would only add an extra 20% higher tax rate. The PPh 21 rates are progressive, meaning that the higher the income, the higher the tax rate increases. As per the latest regulation, the non-taxable personal income in Indonesia is Rp54.000.000,00 (fifty-four million Indonesian Rupiah) per year. Hence, any Indonesian-sourced income of foreigners surpassing that specified amount is subject to Article 21.

personal income tax

Read More: The Government Introduces New Provisions on Re-Examinations Within the Customs Sector Through the Minister of Finance Regulation No. 78 of 2023

PPh 26

On the other hand, foreigners classified as foreign taxpayers are subject to PPh 26 and enjoy a tax deduction of 20% of the gross amount they are required to pay, which includes:

  1. Dividends;
  2. Interest, including premiums, discounts, and compensation related to guarantees for debt repayment;
  3. Royalties, rent, and other income related to the use of assets;
  4. Compensation for services, work, and various activities;
  5. Gifts and awards;
  6. Regular pension and other periodic payments;
  7. Premiums for swaps and other hedging transactions; and/or
  8. Profits arising from debt relief.

Recent Adjustments to Foreigners Classified as Domestic Taxpayers

Government Regulation Number 55 of 2022 outlines specific criteria that limit the taxable income of Foreigners classified as Domestic Taxpayers to earnings solely derived from Indonesia. This regulation is applicable for a duration of 4 (four) tax years, calculated since the foreigner has become a domestic tax subject. To satisfy this requirement, foreigners concerned must have a particular expertise in accordance with the laws and regulations.

Foreigners with “particular expertise” include foreign workers occupying positions as foreign researchers and other particular positions.

The relevant foreigner with “particular expertise” must fulfill the following requirements:

  1. The determination of foreign workers occupying “particular positions”, which is done by the ministry related to labor; or
  2. The determination of foreign researchers, which is done by the head of the institution responsible for government tasks in research, development, study and implementations, inventions and innovations, nuclear energy, and integrated aerospace activities.

The criteria for “particular expertise” include:

  1. Having expertise in the fields of science, technology, and/or mathematics, which are demonstrated by:
  1. Certification of expertise issued by an institution designated by the Indonesian Government or the government from which the foreigner originates;
  2. Educational diploma; and/or
  3. Minimum work experience of 5 (five) years in the relevant field of expertise; and
  4. Having an obligation to transfer knowledge.



  1. Director General of Tax Regulation Number PER-43/PJ/2011 on the Identification of Domestic and Foreign Taxpayers.
  2. Article 21(5)(a) of Law Number 36 Year 2008 on the Fourth Amendment to Law Number 7 of 1983 on Income Tax.
  3. Ministry of Finance Regulation Number 101/PMK.010/2016 on the Adjustment of The Non-Taxable Income Threshold.
  4. Government Regulation Number 55 of 2022 on Regulatory Adjustments in the Income Tax Sector.


ET Consultant is a Business Consultant and Legal Consultant Expert that provides support for local and multinational clients to start and manage their business operations in Indonesia. ET Consultant specializes in Business Incorporation, Licensing & Legal, Accounting & Taxes, Immigration, and Advisory Services.

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An Indonesian group advisory or consulting firm that provides Business and Legal Consultant for local and multinational client support for start-ups and managing business operations in Indonesia. ET Consultant provides a solid legal foundation with experience, reasonable cost, reliable corporate & business legal services with excellence, integrity, and trusted services for ease of doing business in Indonesia.

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