Corporate Income Tax Indonesia 2026: Complete Guide
Corporate income tax (PPh Badan) is a significant consideration for any business operating in Indonesia. Here's what you need to know.
Tax Rates Overview
Corporate Income Tax Rates
Current rates for different entities
| Feature | Standard Rate Most companies | Public Company Listed companies | SME Rate Small businesses | Final Tax Certain sectors |
|---|---|---|---|---|
| Rate | 22% | 19% | 0.5% of turnover | Varies (0.5-10%) |
| Applies To | Net taxable income | IPO with 40%+ free float | Turnover < IDR 4.8B | Specific industries |
| Entity Type | PT, CV, etc. | Listed PT | CV, PT with low revenue | Construction, etc. |
Tax Calculation
Corporate Tax Estimator
Estimate your annual corporate tax
Default Inputs
- Annual Revenue (IDR)
- 5,000,000,000 IDR
- Deductible Expenses (IDR)
- 3,500,000,000 IDR
- Company Type
- Standard PT/PT PMA
Estimated Result
Estimated total
Rate applied: 22%
Rp 330.000.000
SME Final Tax (PP 55/2022)
Businesses with gross turnover under IDR 4.8 billion/year can use simplified final tax:
- Rate: 0.5% of gross turnover
- No complex calculations
- Monthly payment
- Applies to: PT, CV, individuals with business
- Duration: Maximum 7 years for PT, 4 years for CV/individuals
After the maximum period, regular rates apply.
SME Tax Example
| Monthly Revenue | Tax Due |
|---|---|
| IDR 100M | IDR 500K |
| IDR 200M | IDR 1M |
| IDR 400M | IDR 2M |
Deductible Expenses
What's Deductible?
Common Deductible Expenses
Expenses that reduce taxable income
operational
capital
financial
services
Non-Deductible Expenses
| Expense | Notes |
|---|---|
| Dividends | Not an expense |
| Personal expenses | Must be business-related |
| Donations (most) | Some exceptions |
| Fines and penalties | Government fines |
| Entertainment (undocumented) | Need proper documentation |
| Related party premium | Above market rate |
Depreciation
Depreciation Groups
| Group | Assets | Rate (Straight-line) | Rate (Declining) |
|---|---|---|---|
| 1 | 4-year life | 25% | 50% |
| 2 | 8-year life | 12.5% | 25% |
| 3 | 16-year life | 6.25% | 12.5% |
| 4 | 20-year life | 5% | 10% |
| Building (permanent) | 20-year | 5% | - |
| Building (non-permanent) | 10-year | 10% | - |
Tax Filing Requirements
Annual Corporate Tax Return
SPT Tahunan Badan (Annual Corporate Tax Return): - Deadline: 4 months after fiscal year-end - For calendar year: April 30 - Extension: Up to 2 months possible - Method: e-Filing mandatory
Monthly Obligations
| Obligation | Deadline | Description |
|---|---|---|
| PPh 21 | 10th of following month | Employee withholding |
| PPh 23 | 10th of following month | Service withholding |
| PPh 25 | 15th of following month | Prepaid CIT installment |
| PPh 4(2) | 10th of following month | Final tax items |
| VAT (PPN) | End of following month | If VAT registered |
Transfer Pricing
Indonesia has strict transfer pricing rules for transactions between related parties:
- Must be at arm's length prices
- Documentation required (Master File, Local File)
- Country-by-Country Reporting for large groups
- Penalties for non-compliance
Work with qualified tax advisors for related party transactions.
Documentation Requirements
| Report | Required For | Threshold |
|---|---|---|
| Master File | Large taxpayers | Revenue IDR 50B+ |
| Local File | Related party deals | Any material transaction |
| CbC Report | Multinationals | Group revenue €750M+ |
Tax Incentives
Available Incentives
| Incentive | Benefit | For Whom |
|---|---|---|
| Pioneer Industry | Tax holiday up to 20 years | Large investments |
| Investment Allowance | 30% super deduction | Qualifying investments |
| R&D Incentive | 300% deduction | Research activities |
| Vocational Training | 200% deduction | Training programs |
| Special Economic Zone | Various | SEZ located businesses |
Common Issues for Foreign Companies
PT PMA Considerations
- Thin Capitalization - Debt/equity ratio limits (4:1)
- Transfer Pricing - Related party transactions scrutiny
- Withholding Taxes - Payments to foreign affiliates
- Permanent Establishment - Careful structuring needed
- Tax Treaties - Check applicability
Compliance Calendar
| Month | Activity |
|---|---|
| January | Previous year reconciliation |
| March | Prepare annual return |
| April | File annual return (due April 30) |
| Monthly | PPh installments and withholding |
| Quarterly | Review and adjust estimates |
Penalties
| Violation | Penalty |
|---|---|
| Late filing | IDR 1M/month (max 24 months) |
| Late payment | 2% per month |
| Underpayment | 2% per month + potential 200% |
| Tax fraud | Criminal penalties possible |
Common Questions
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