The tax legislation of the Republic of Indonesia assigns two statuses to foreign citizens:
The status of a foreign subject of taxation or SPLN (Subjek Pajak Luar Negeri) is granted to any foreign citizen who stays in Indonesia for 183 days or less in total during a period of 12 months.
If a foreign citizen stays in Indonesia for more than 183 days within a period of 12 months, he/she receives SPDN (Subjek Pajak Dalam Negeri) status, i.e. Indonesian tax resident status. A foreigner with SPDN status is required to pay income tax (PPh) on almost any income (exceptions are listed in paragraph 3 of Article 4 of Law No. 36 of 2008), incl. obtained from sources outside Indonesia. Fortunately, an agreement on the avoidance of double taxation has been signed between Indonesia and 71 countries:
List of 71 countries that have a double taxation agreement (tax treaty) with Indonesia (dated November 24, 2022)
America:
- Canada – 1999
- Suriname – 2014
- USA – 1997
- Venezuela – 2001
- Mexico – 2005
Europe:
- Austria – 1989
- Belarus – 2018
- Belgium – 2002
- Bulgaria – 1993
- Croatia – 2013
- Czech Republic – 1997
- Denmark – 1987
- Finland – 1990
- France – 1981
- Germany – 1992
- Hungary – 1994
- Italy – 1996
- Luxembourg – 1995
- Netherlands – 2004
- Norway – 1991
- Poland – 1994
- Portugal – 2008
- Romania – 2000
- Russia – 2003
- Serbia – 2019
- Slovak Republic – 2002
- Spain – 2000
- Sweden – 1990
- Switzerland – 1990
- UK – 1995
- Ukraine – 1999
Africa:
- Algeria – 2001
- Egypt – 2003
- Morocco – 2013
- Seychelles – 2001
- South Africa – 1999
- Sudan – 2001
Asia:
- Armenia – 2017
- Bangladesh – 2007
- Brunei – 2003
- Cambodia – 2020
- Hong Kong – 2013
- India – 1988
- Iran – 2011
- Japan – 1983
- Jordan – 1999
- DPRK/North Korea – 2005
- Kuwait – 1999
- Laos – 2017
- Malaysia – 1987
- Mongolia – 2001
- Pakistan – 1991
- Philippines – 1983
- Qatar – 2008
- Saudi Arabia – 1989
- Singapore – 2020
- Republic of Korea/South Korea – 1990
- Sri Lanka – 1995
- Syria – 1999
- Chinese Taipei – 1996
- Thailand – 2004
- Tunisia – 1994
- Türkiye – 2001
- UAE – 2019
- Uzbekistan – 1999
- Vietnam – 2000
- China – 2004
- Tajikistan – 2019
Australia and Oceania:
- Australia – 1993
- New Zealand – 1989
- Papua New Guinea – 2011
The assessment and payment of personal income tax (PPh) is governed by Indonesian Law No. 36 of 2008. Next, we will consider the most popular and relevant types of PPh. Briefly in Indonesia they are referred to by the number of the article of law: PPh 21, PPh 23 or PPh 26.