Tax responsibilities in Indonesia

Personal Tax Liabilities in Indonesia

As an individual earning income in Indonesia, it is important to understand your tax obligations under Indonesian law. This article outlines your responsibility for tax payments and key regulations applicable to your income.

Individual Tax Responsibility

According to Indonesian tax regulations, all individuals are responsible for declaring and paying their taxes directly to the Directorate General of Taxes. Gini Talent does not withhold or deduct any amount related to taxes from freelancer payments.

Key Points:

• Tax-Free Allowance (PTKP): Individuals earning up to IDR 54 million per year are exempt from income tax. Additional exemptions apply for dependents.

• Progressive Tax Rates: Taxable income above PTKP is subject to progressive tax rate starting from 5%, depending on income levels.

• Tax Calculation Example 1: An individual earning USD 3,400 per year (approx. IDR 52.7 million) falls below the PTKP threshold and is not subject to income tax.

• Tax Calculation Example 2: An individual earning USD 3,600 per year (approx. IDR 55.8 million) exceeds PTKP by IDR 1.8 million, resulting in a 5% tax rate on this portion. The total tax liability is IDR 90,000 per year (approx. USD 5.80).

• Filing Responsibility: Individuals must file an annual tax return (SPT) by March 31 of the following year.

Next Steps for Taxpayers

1. Register with the Tax Authority: Ensure you have a Taxpayer Identification Number (NPWP).

2. Maintain Financial Records: Keep track of income and deductions for accurate reporting.

3. Submit Annual Tax Returns: File your tax report on time to avoid penalties (if applicable).

4. Seek Professional Guidance: Consult a tax advisor if you need help with compliance or deductions.

If you have further questions, please contact the Indonesian Tax Authority (DJP) or a certified tax consultant for assistance.