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Bali Zero handles visas, company setup, tax and property compliance in Indonesia. Ask us directly on WhatsApp.
Chat with Bali Zero on WhatsAppGovernment Regulation No. 20 of 2026 changed Indonesia's rules for the 0.5% final income tax available to taxpayers with specified gross turnover.
The regulation took effect on 22 April 2026 and amended PP 55/2022. The important question is no longer only whether annual gross turnover is within IDR 4.8 billion. The taxpayer's legal form and the applicable transition rules also matter.
Under the revised framework, the eligible categories include individual taxpayers, individual limited liability companies known as PT Perorangan, and cooperatives, subject to the regulation's conditions and time limits.
Regular limited liability companies, limited partnerships, firms, and village-owned enterprises are no longer included in the same way for newly registered taxpayers after the regulation took effect. Existing taxpayers that were already using the facility may have transitional treatment for the remainder of the period available under the previous framework.
Each taxpayer should confirm its own start date, legal form, turnover, and remaining facility period. A general article cannot determine eligibility for a specific NPWP.
Foreign investors should be particularly careful with the PT Perorangan headline. A PT Perorangan is designed for eligible Indonesian individual founders and is not a substitute for a foreign-owned PT PMA.
A foreign founder cannot choose PT Perorangan merely to obtain the 0.5% regime. The company structure must first comply with ownership, investment, and licensing law. Tax treatment is one factor in the decision, not a shortcut around foreign-investment rules.
For a newly established regular PT or PT PMA, financial planning should therefore use the general corporate income-tax framework unless a qualified tax adviser confirms a specific facility or exception.
A PT, CV, or firm that used the 0.5% regime before 22 April 2026 should not assume that the benefit ended immediately. It should identify:
The end of the simplified regime can affect accounting systems, cash-flow forecasts, annual returns, and the timing of professional support.
The first mistake is assuming every business below IDR 4.8 billion automatically qualifies for the 0.5% rate. Turnover alone is not enough.
The second is treating “Article 17” as one universal progressive rate. Individuals and corporate entities are taxed under different general rules. The applicable calculation depends on the taxpayer and should be modelled correctly.
PP 20/2026 makes early tax planning more important for founders. For foreign investors, the right starting point remains a compliant PT PMA structure and accurate financial modelling.
Bali Zero can help coordinate the business-establishment and licensing review while a registered tax professional confirms the entity's tax position.
Sources: official PP 20/2026 record and Taxindo analysis of the entity categories and transition. This article is general information, not tax advice for a particular taxpayer.