The fiscal year begins on January 1 and ends on December 31 of the same year.
Accounting standards correspond to a brief version of the "Inventory of Generally Accepted Accounting Principles for Business Enterprises" drafted in 1964 by Paul Grady. Financial accounting standards (PSAKs) or GAAP.
The balance sheet is presented into accounts with liabilities composed of constant capital and debts. The profit and loss account gives priority to the repository of the global production and lets the choice of the cost classification either by nature or by function.
Financial statements must contain at least : a variation sheet of constant capital excluding the reserve account and balance carried forward, a cash flow sheet and the annexes. The statements of the activity during the financial year include the balance sheet, the assets and liabilities account, the intermediate balance, the statement of source and application of funds and an additional information statement. They are inseparable from each other. Accounts should be published annually.
- sellers of second-hand cars, travel agents, postal services (1%) - manufacturers of cigarettes (8.4%) - machining services (0.5%), some small and medium retailers (2%), DIY construction (4%)
Other Consumption Taxes
There is a tax on luxury goods which ranges from 10% to 75%. Luxury goods are non-vital goods such as air conditioning, television (10-20%), goods whose consumption is exclusive to more well-off people like jewelry and precious metals (40-75%), goods consumed more for their status than their usefulness, such as luxury cars (75%), harmful products such as alcoholic drinks (30-75%) and some luxurious properties.
VAT applies in the same way to residents and non-residents.
Capital Gains Taxation
Long term capital gains are taxed as ordinary income, and losses are tax deductible.
Main Allowable Deductions and Tax Credits
Dividends received or derived from a resident company and stemming from holdings in another Indonesian limited liability company are exempt from tax if the beneficiary exercises commercial activities and holds at least 25% of the shares of the payer and if the dividends come from non-distributed profits. Generally, all legitimate expenses linked to business activities are deductible from income when income tax is calculated, but there are many exceptions. These can be deducted from tax: aid, donations and gifts received (as long as there are no commercial or work relations between the parties), inheritances, payments made by an insurance company (health, accident, life, education), premiums derived from interest on investment fund bonds (during the first 5 years after the setting up of the company), income generated by the main contractors in foreign aid projects, profits paid to a risk-capital company by an LDC doing business in Indonesia, the share of profits received by a member of a limited partnership without capital holding, affiliation, association or company.
Other Corporate Taxes
Income derived from resident companies and coming from foreign sources is subject to a unilateral tax credit concerning the foreign income tax paid. Income tax of 5% deductible at the end of the year, is levied on those who owe corporate tax. A tax on transfers of 5% is levied on buyers (except commercial activities).
Country Comparison For Corporate Taxation
East Asia & Pacific
Number of Payments of Taxes per Year
Time Taken For Administrative Formalities (Hours)
Total Share of Taxes (% of Profit)
- Last Available Data.
Pajak penghasilan (individual income tax)
Progressive rate from 5% to 30%
From IDR 0 to 50,000,000
From IDR 50,000,001 to 250,000,000
From IDR 250,000,001 to 500,000,000
Over IDR 500,000,001
Allowable Deductions and Tax Credits
Tax deduction allowance of 1 728 000 Rp for single people and 864 000 Rp for every married person. Fixed deduction of 648 000 Rp (maximum) or 5% of the annual income.
Special Expatriate Tax Regime
There is no special tax regime for expats in Indonesia.
Double Taxation Treaties
Countries With Whom a Double Taxation Treaty Have Been Signed
Law n°31 regarding industrial designs 20 December 2000
Independence of Justice
The judiciary is not completely independent in Indonesia.
Equal Treatment of Nationals and Foreigners
Foreign nationals in the country cannot expect a fair trial from the country’s judicial system.
The Language of Justice
The judicial language in the country is Bahasa Indonesia.
Recourse to an Interpreter
Having an interpreter is always possible.
Sources of the Law and Legal Similarities
The main source of the law is the constitution of 1945 which has gone through a series of amendments. The country’s legal system is based on Roman-Dutch law, again modified several times. The country does not accept compulsory ICJ jurisdiction.
Integration in the International Standards Network
At the international level:
- International Electrotechnical Commission (IEC) - International Organization for Standardization (ISO) - Codex Alimentarius Commission (CAC) - International Laboratory Accreditation Cooperation (ILAC).
At the regional level:
- ASEAN Consultative Committee for Standards and Quality (ACCSQ), - APEC Standards and Conformance Sub Committee, - Pacific Area Standard Congress (PASC) - Asia Pacific Metrology Program (APMP) - Asia Pacific Laboratory Accreditation Cooperation (APLAC) - Pacific Accreditation Cooperation (PAC)
Classification of Standards
"SNI" is the national certification mark.
Online Consultation of Standards
The list of Indonesian standards is available on the BSN website.
Banks: from 8 am to 2 pm, Monday to Saturday. Public Administrations: from 8 am to 4 pm, Monday to Thursday; Friday until 11 am; Saturday from 8 am to 2 pm Shops: from 8 am to 9 pm, Monday to Saturday; some supermarkets open on Sunday.
Christian New Year (Tahun baru Masehi)
Islamic New Year (Tahun baru 1429 Hijriyah)
Chinese New Year (Tahun baru Imlek)
1st day of the 1st month of the Chinese calendar
Day of silence (Hari raya nyepi, Tahun baru Saka)
New Year in the Balinese calendar
Birth of the Prophet Mohammed (Maulid Nabi Muhammad SAW)