Indonesia

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

Progressive rate from 10 to 30% depending on the company income.

   
Tax rate on long-term capital gains Capital gains is taxed in Indonesia from 10 to 30%.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Rate of 15%
NB: rate is 10% if the Belgian shareholders possess 25% or more of the shares in a company with Indonesian capital.
   
Tax rate on branches Branch profits are taxed at the same rate as corporate profits. However, a 20% withholding branch profit tax is payable on its after tax taxable income in addition to the corporate tax. An exemption of withholding tax may be granted to a permanent establishment which reinvests its net profits in Indonesia.




Income tax

Fiscal year The fiscal year begins on January 1-st and ends on December 31 of the same year.
   
Income tax rate Rate from 5% to 35% (20% for non-residents)
From 0 to 25,000,000 Rp:5%
From 25,000,001 to 50,000,000:10%
From 50,000,001 to 100,000,000 Rp:15%
From 100,000,001 to 200,000,000 Rp:25%
Beyond 200,000,000:35%
   
Tax deductions or other allowances In Indonesia the main deductions are:
Tax deduction allowance of 1,728,000 Rp for single people and 864,000 Rp for every married person.
Deduction of 648,000 Rp (maximum) or 5% of the annual income.



VAT rates

Standard rates 10%
   
Reduced rates Reduced rate: 2% for retail sales, no VAT for some products (basic necessities, food served in hotel and restaurant, medical services, art and entertainment services, etc).



Other important taxes


Name of tax
Rate
Tax on sales of luxury goods  
10% to 75%  
Land tax  
0,50%  
Imports tax  
0% to 200%  
Stamp duties  
3,000 Rp or 6,000 Rp  
Property tax  
Variable rate according to the market price  
Export tax  
250,000 by air,
100,000 by sea, 50,000 by road.  


 

Accounting

Introduction
Historically, local and environmental factors affect the structure of accounting in Indonesia. For a long time, under the influence of the Netherlands, Indonesian book keepers tended to be more and more inspired by the American model. Real change occurred in 1965 with the beginning of a real market economy as well as the opening of the Stock Exchange. The consequences has been the improvement and the standardizations of accounting, audit or even ethics practices.


Obligations and publications
Financial statements must contain at least : a variation sheet of constant capital, a cash flow sheet and the annexes.
The statements include the balance sheet, the assets and liabilities account, the funds and additional information statement.

Certification and auditing
The chartered accountant profession in Indonesia is represented only by 400 members. They have no accurate accounting model but are inspired by the American and Dutch model.
Accounting standards correspond to a brief version of the "Inventory of Generally Accepted Accounting Principles for Business Enterprises" drafted in 1964 by Paul Grady. The Accountants Association has developed 2 types of standards: one for accounting and one for audit.

Professionals and representative organizations
The "Indonesian Institute of Accountants" represents the profession of accountant and tries to get harmonized with the IFAC's standards.



Useful links
For further information, please check the Investment Coordinating Board (BKPM) website.

Last modified in 2006 - ongoing update
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