Where to Register
Taxpayers must register at the Tax Service Office in your city of residence. Expats living in Jakarta are required to register with the Tax Office for Foreign Bodies and Expatriates (KPP BADORA).
Your registration, monthly tax payment and annual return can be prepared and submitted by appointed representative, usually an accountant specializing in tax matters. Be sure that you receive a good referral, as remember you yourself are accountable for any non-payment of taxes.
To register you need:
• a completed registration form
• photocopies of all the pages in your passport
• photocopy of your work permit
• certificate of domicile for you and your employer
• photocopy of your employer's NPWP
• Letter of Authorization, authorizing your representative to register and handle your tax matters.
While the registration form only asks for copy of ID page of passport and does not request the other items mentioned above, the bureaucrats at the Tax Office ask for them as a matter of course.
Once you have registered, taxes are due and payable beginning not later that the 15th day of the following month and reports should be submitted to the tax office by not later than the 20th day of the same month.
Enforcement and Linkage of NPWP to other Activities
In Year 2001, the Indonesian tax office renews its drive to widen the taxpayer base by registering all Indonesian Nationals for their own NPWP number. They have started linking this requirement to certain other registrations and regulations to enforce it.
There is a regulation shortly to issue that will require an NPWP for all Indonesians applying for a passport, renewing registration of a vehicle over a certain value, having a credit card limit in excess of a certain amount and the payment of housing tax on houses over a certain value.
When are they going to link expatriates as well? We do not know but will keep you advised as soon as we do know.
What Income is Included
The Indonesian personal taxation system is based on worldwide income. This includes:
• Any salary paid to you for your current position, whether it be onshore or offshore
• Dividend and interest income, both onshore and offshore
• Rental income both onshore and offshore
• Capital Gains from Sale of Property, both offshore and onshore
Benefits in Kind are generally excluded: Housing, Cars, School fees, as well as income from inheritance. However, if your company pays you for housing in one lump sum, and then you make the payments ... the tax office may construe that lump sum as income. In this case, it may be better for your employer to pay the housing costs direct to the landlord. You take the money as an advance, not as housing allowance. The company then expenses one month at a time as housing, which is then treated as a fringe benefit.
Credit is given for income tax paid overseas, subjected to limits and perhaps dependent on double taxation treaties between Indonesia and your country. You may also receive credit for tax taken on interest income for local bank accounts and time deposits and other interest earning methods that are taxed.
Since income from Overseas Investment can be taxed, it is best to consult your accountant and your financial consultant to determine how these new regulations will affect any current and future investment strategies.
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