Taxation of international executives
Are there social security/social insurance taxes in Indonesia? If so, what are the rates for employers and employees?
The national social security scheme applies to expatriates who have resided and worked for at least 6 months in Indonesia, except for pension contribution, which is not mandatory for expatriates. If the salary is not borne or paid by a local employer, no contributions are possible.
Employer and employee
|Type of insurance||Paid by employer||Paid by employee||Total|
|Work accident*||0.24% - 1.74%||0.00%||0.24% - 1.74%|
|Total Percent of Full Salary
||4.24% - 5.74%||2%||6.24% - 7.74%
|Pension (not mandatory for expatriates) **
|Max contribution on pension and health insurance||IDR4481,880||IDR160,940||IDR642,820|
* Depending on the industry.
** On maximum salary cap of IDR 8,094,000
*** On maximum salary cap of IDR 8,000,000
Are there any gift, wealth, estate, and/or inheritance taxes in Indonesia?
Are there real estate taxes in Indonesia?
Are there sales and/or value-added taxes in Indonesia?
The rate of VAT is 10 percent but under the law the government may amend this rate to a minimum of 5 percent and a maximum of 15 percent. VAT is levied on exports at 0 percent.
A sales tax is imposed on the delivery of luxury goods by manufacturers in Indonesia and on the importation of luxury goods. The rates vary depending on the category of goods. The current rates range from 10 percent to 75 percent.
Are there unemployment taxes in Indonesia?
Are there additional taxes in Indonesia that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
Companies employing expatriates are required to pay USD100 per month for the Skill Development Fund (certain exemptions apply). This levy must be paid 12 months in advance and is required for the issuance of the expatriate’s work permit. This levy is intended to fund the education and training of Indonesian employees.
Annual property tax2
A property tax of 0.5 percent is levied on a specified percentage of the taxable sales value of land and buildings. For the following types of property, the percentage is 40 percent of the sales value:
For other types of property, the percentage is 20 percent. Thus, the effective tax rate is 0.2 percent or 0.1 percent, respectively.
1Decision of the Minister of Manpower and Transmigration of the Republic of Indonesia No. KEP-20/MEN/III/2004.
2Law Number 12 Year 1994, Government Regulation No. 25/2002
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