Indonesia 0% Foreign Income Tax 2026 | PMK 18/2021 Guide

Q: What is PMK 18/2021 and how does it benefit expats?

PMK 18/2021 implements Indonesia's territorial tax system where foreign-sourced income is taxed at 0% if not remitted to Indonesia. This means expats earning from overseas clients or employers can legally avoid Indonesian tax on that income.

Q: What are the conditions for 0% tax on foreign income in Indonesia?

Income must be genuinely foreign-sourced (not from Indonesian clients), not remitted to Indonesian bank accounts, and you must still file annual SPT declaring the income. Having proper documentation of income source and payment destination is essential.

Q: Does the 0% foreign income rule apply to digital nomads in Bali?

Yes, if you are a tax resident (183+ days) earning from foreign clients and keeping income in overseas accounts, PMK 18/2021 applies. However, you still need a valid visa and must declare income on SPT. Consult a tax advisor for proper structuring.

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Indonesia 0% Foreign Income Tax 2026 | PMK 18/2021 Guide