Indonesian tax resident: who becomes one and what income they pay tax on (2026)
AB
Andrei Balinsky
Founder of Balinsky
Many foreigners in Bali think taxes start when you get a tax number. That is not true. Days in the country make you a resident, not a number.
Who is a resident
- Anyone who has been in Indonesia for more than 183 days in any 12 months. Or who lives here and intends to keep living here (Income Tax Law, Art. 2).
- Having a tax number (NPWP) or not does not affect the status. The number is needed to pay and file.
What income a resident pays tax on
- All income worldwide, at rates from 5% to 35%.
- An exception for foreign specialists: for the first 4 years they can pay only on income from Indonesia. It does not apply automatically - you have to file an application with the tax office.
- Some income is subject to final tax. For example, renting out land and buildings - 10% of the amount.
Non-resident
20% is withheld at source on income from Indonesia. A double tax treaty with the country of citizenship may reduce the rate.
Tax return
- The annual individual tax return is filed by 31 March of the following year. Since 2025 - through the Coretax system on the tax office website.
- Late filing - a fine of 100,000 rupiah, plus interest on unpaid tax.
- A resident declares all assets, including those abroad. Withdrawing money from an account before 31 December to show a smaller balance is pointless: the money turns into cash or another asset, and that must be declared too. Banks share data with the tax office anyway.
If you do not file
The tax office can declare you a resident on its own based on days in the country and assess tax for past years with interest. The time limit for doing this is 5 years.
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 you become a resident only once you get a tax number and that you can "stay in the shadows". This is wrong and dangerous. We added the 4-year relief and the switch to Coretax.
Materials the article is based on: https://t.me/BaliLawyer/23, https://t.me/BaliLawyer/65, https://t.me/BaliLawyer/128, https://t.me/BaliLawyer/168, https://t.me/BaliLawyer/174
Sources
- Income Tax Law No. 36/2008, Art. 2: https://pasal.id/peraturan/uu/uu-no-36-tahun-2008/pasal-2
- Indonesian tax office on the relief for foreigners: https://www.pajak.go.id/id/artikel/wna-hanya-dipajaki-atas-penghasilan-dari-indonesia-kok-bisa
- Indonesian Tax Service (Coretax, tax returns): https://www.pajak.go.id