Complete Guide to Types of Corporate Taxes in Indonesia

Understanding corporate taxes is a crucial aspect of running a business in Indonesia. Every business entity is obliged to pay various direct taxes based on the type of income received. A profound understanding of these tax types is vital for companies to comply with their tax obligations accurately. Here are several types of taxes imposed on companies in Indonesia.

PPh 21 (Article 21 Income Tax)

PPh Article 21 is income tax deducted directly from employees’ salaries by the company. The company acts as the withholder and is responsible for providing proof of deduction to its employees.

PPh 23 (Article 23 Income Tax)

PPh Article 23 is levied on income such as gifts, awards, capital, and services that have not been subject to previous tax deductions.

PPh Article 26

PPh Article 26 is imposed on income received by taxpayers from overseas, excluding income from businesses or operations located in Indonesia.

PPh Article 25

PPh Article 25 constitutes advance income tax payments based on the previous year’s corporate income tax.

PPh Article 29

PPh Article 29 represents underpaid tax recorded in the Annual Income Tax Return (SPT Tahunan PPh), which is the remaining tax due for the tax year minus tax credits.

PPh Article 4 Paragraph (2)

PPh Article 4 paragraph (2) is a final tax imposed on certain types of income and cannot be credited against income tax due.

The Importance of Choosing a Reliable Tax Consultant for Companies in Indonesia

Tax consultants from Tax-Indo are pivotal in managing corporate taxes. In Indonesia, the necessity for tax consultants is significant due to the continuously evolving complexity of tax regulations.

Tax-Indo has an in-depth understanding of tax rules and regulations in Indonesia. We can assist companies in comprehending applicable tax requirements based on their business type and income.

Our consultants are dedicated to aiding companies in optimizing their tax obligations. Through accurate analysis, we recommend strategies to reduce legal tax burdens in line with prevailing regulations.

With the support of experienced tax consultants from Tax-Indo, companies can effectively manage their taxes, optimize tax obligations, and comply with current regulations.