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Zantara AI
AI Tax Advisor
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Zantara AI
AI Tax Advisor
Bali Zero handles visas, company setup, tax and property compliance in Indonesia. Ask us directly on WhatsApp.
Chat with Bali Zero on WhatsAppIndonesia uses an extensive withholding tax system. As a business, you're often required to withhold and remit taxes on various payments.
Main PPh withholding categories
| Feature | PPh 21 Employment income | PPh 23 Services & royalties | PPh 26 Foreign payments | PPh 4(2) Final taxes |
|---|---|---|---|---|
| On | Salaries, wages, fees | Services, dividends, interest | Payments to non-residents | Rent, construction, etc. |
| Rate | Progressive 5-35% | 2-15% | 20% (or treaty rate) | Various (final) |
| Remit | Monthly | Monthly | Monthly | Monthly |
| Deadline | 10th of following month | 10th of following month | 10th of following month | 10th of following month |
PPh 21 is the income tax withheld from employee compensation:
The employer withholds and remits to the tax office.
| Taxable Income (IDR/year) | Rate |
|---|---|
| 0 - 60 million | 5% |
| 60M - 250 million | 15% |
| 250M - 500 million | 25% |
| 500M - 5 billion | 30% |
| Over 5 billion | 35% |
Estimate monthly employee withholding
Estimated total
Approximate calculation
Rp 2.500.000
| Payment Type | Rate |
|---|---|
| Dividends | 15% |
| Interest | 15% |
| Royalties | 15% |
| Technical services | 2% |
| Management services | 2% |
| Consultant services | 2% |
| Other services | 2% |
PPh 26 applies to payments made to non-residents (foreign persons or entities):
| Country | Services | Dividends | Interest | Royalties |
|---|---|---|---|---|
| Singapore | 15% | 10/15% | 10% | 15% |
| USA | 15% | 10/15% | 10% | 10% |
| UK | 15% | 10/15% | 10% | 15% |
| Australia | 15% | 15% | 10% | 15% |
| Japan | 15% | 10/15% | 10% | 10% |
| No treaty | 20% | 20% | 20% | 20% |
To apply treaty rates, the foreign recipient must provide:
| Transaction | Rate | Notes |
|---|---|---|
| Land/building rent | 10% | Final |
| Construction services | 2-4% | Based on certification |
| Land/building sale | 2.5% | Final |
| Dividends to individuals | 10% | Final |
| Bank interest | 20% | Final |
| Lottery prizes | 25% | Final |
| Contractor Type | Rate |
|---|---|
| Large certification | 2% |
| Medium certification | 3% |
| Small/no certification | 4% |
Monthly compliance calendar
| Feature | PPh 21 | PPh 23 | PPh 26 | PPh 4(2) |
|---|---|---|---|---|
| Payment | 10th of following month | 10th of following month | 10th of following month | 10th of following month |
| Reporting | 20th of following month | 20th of following month | 20th of following month | 20th of following month |
| Form | SPT Masa PPh 21 | SPT Masa PPh 23/26 | SPT Masa PPh 23/26 | SPT Masa PPh 4(2) |
When you withhold tax, you must provide a Bukti Potong (withholding certificate):
| Tax Type | Certificate |
|---|---|
| PPh 21 | Bukti Potong 1721-A1/A2 |
| PPh 23 | Bukti Potong PPh 23 |
| PPh 26 | Bukti Potong PPh 26 |
| PPh 4(2) | Bukti Potong PPh 4(2) |
Recipients use these to:
| Mistake | Impact |
|---|---|
| Missing withholding | Late payment penalties + interest |
| Wrong rate applied | Under/overpayment |
| Not providing certificates | Problems for recipients |
| Missing treaty formalities | 20% rate applies instead of treaty |
| Incorrect NPWP | Certificate issues |
| Violation | Penalty |
|---|---|
| Late payment | 2% per month |
| Late filing | IDR 100K-1M per return |
| Not withholding | Tax + 100% penalty |
| Late issuing certificate | Administrative penalty |
AI-powered answers from our knowledge base
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