Indonesia is one of the most promising countries for business in Southeast Asia. However, to succeed in business, it is crucial to understand the local tax system and be aware of the available benefits. In this article, we will discuss the taxes entrepreneurs face, the benefits offered to foreigners, and how to avoid legal complexities.

Taxes for businesses in Indonesia

The Indonesian tax system consists of several key types of taxes:

Corporate tax

The standard corporate tax rate is 22% of the company’s profit. For small businesses with annual revenue below 4.8 billion Indonesian rupiahs (approximately $300,000 USD), the tax rate is reduced to 0.5% of revenue.

Value-Added Tax (VAT)

The standard VAT rate in Indonesia is 11%. Companies are required to register as VAT payers if their annual revenue exceeds the established threshold.

Dividend tax

Dividends paid to foreign shareholders are taxed at a rate of 20%, but this rate may be reduced based on double taxation avoidance agreements between Indonesia and the shareholder’s country.

Income tax

Employers are required to withhold tax from their employees’ income. The rates range from 5% to 35%, depending on the income level.

Benefits for foreign investors

Indonesia actively attracts foreign capital by offering a range of advantages:

Tax holiday

Foreign companies in strategic industries may be exempt from paying corporate tax for up to 20 years, depending on the amount of investment.

Special Economic Zones (SEZ)

Companies operating in SEZs enjoy tax benefits, such as reduced VAT and exemption from customs duties. For example, the SEZ in Bali offers simplified access to licenses and minimal taxes.

Investment incentives

Companies investing in infrastructure or production development are eligible for tax deductions and accelerated depreciation of equipment.

How to properly manage taxes

To avoid issues with the tax authorities, it is important to:

• Register your company on time and obtain a tax number (NPWP).
• Maintain accounting records according to local standards.
• Consult professionals for preparing tax returns.

Easy Visa offers a full range of services for your business, including company registration, tax document preparation, and consultation on benefits. We will help you set up your accounting and minimize taxes while complying with all legal regulations.

Why trust Easy Visa?

At Easy Visa, we are well-versed in the intricacies of Indonesia’s tax laws. By working with us, you will receive:

• Full support at every stage of your business operations.
• Tax consultations and assistance with tax optimization.
• A guarantee of legal transparency.

With our help, your business will not only be successful but also protected from unpleasant surprises.

Taxes in Indonesia are not just obligations but also opportunities to save with the right approach. Take advantage of all available benefits and work with professionals to simplify the management of your business.

Trust Easy Visa — we will handle everything for you so that you can focus on growing your business!

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