The 0.5% turnover tax in 2026: who kept it and who lost it
AB
Andrei Balinsky
Founder of Balinsky
For a long time, small businesses in Indonesia could pay 0.5% of turnover instead of profit tax. Since 22 April 2026, Government Regulation No. 20/2026 has been in force, and the rules have changed.
Who kept 0.5%
- Individual entrepreneurs.
- Companies with a single founder (PT perorangan).
- Cooperatives.
For individuals and single-founder companies, the time limit was removed. Previously the rate applied for 7 and 4 years.
Who lost it
- Regular PT companies, including foreign-owned companies (PT PMA).
- CV and firma partnerships, BUMDes village enterprises.
Those who already used 0.5% can stay on the rate until the end of their term.
The limit
- The rate is available for turnover of up to 4.8 billion rupiah a year.
- All income counts, including foreign income.
- The turnover of a person and of their single-founder company is added together. Spouses' turnover was combined before as well.
Splitting and buying a ready-made company
- The tax office may treat splitting a business into several legal entities, so that each stays under the limit, as avoidance and recalculate the tax (anti-avoidance rule, Art. 32 of Regulation No. 55/2022). The time limit for an additional assessment is 5 years.
- Buying a ready-made 2025 company for the sake of 0.5% is risky for the same reason.
What's next for a regular PT
Corporate profit tax is 22%. Companies with turnover of up to 50 billion rupiah get a 50% discount on part of their profit.
Editorial note
Balinsky editorial team · 12 October 2026. The text has been checked against Indonesian laws in force on this date.
Update: one review said that the 4.8 billion limit is now shared by all of an owner's companies, and advised "hiding the scheme as much as possible". Only a person and their single-founder company are added together. You must not hide a scheme from the tax office.
Materials the article is based on: https://t.me/BaliLawyer/183, https://t.me/BaliLawyer/189
Sources
- Government Regulation No. 20/2026 (tax office website, PDF): https://www.pajak.go.id/sites/default/files/2026-06/Peraturan%20Pemerintah%20nomor%2020%20Tahun%202026.pdf
- Indonesian Tax Service: https://www.pajak.go.id