Tax, Accounting & Payroll Services in Indonesia
Peak Solutions offers comprehensive Tax Accounting Services in Indonesia, helping businesses navigate local tax regulations and optimize their financial strategies. Their expert team ensures compliance while providing tailored solutions to meet your specific needs.
Tax, Accounting & Payroll Services
Ensure full compliance and financial clarity with our trusted tax, accounting, and payroll services
Monthly Tax & Accounting
Tax matters in Indonesia can be quite complicated, time consuming and frustrating due to the vast amount of laws, regulations and grey areas that govern it. However, if you are a long term resident, a business owner or working within Indonesia, you will need to understand your tax obligations.
One surprising factor new business owners encounter when they open a business in Indonesia is that, not only do they need to do annual tax reporting, but also monthly reporting. . This can be extremely costly and should be a consideration for all new business owners when you register your business.
When should you start your tax reporting?
Once you have established a business in Indonesia you have to register as a taxpayer. You will get a tax ID number / tax registration number (NPWP), tax relief certificate (SKT), and taxable VAT entity confirmation number (SPPKP) – which is additional, if your business has a gross revenue more than 4.8 billion IDR in a year.
Once you have a NPWP and SKT, you are obliged to calculate, pay, and file the report to the Indonesia Tax Authority.
Many new businesses believe that because they are not earning any money or earning a profit, that they are exempt from tax reporting; however, you are still obliged to file a report with zero tax.
Please note that if you do not keep on top of your taxes, you could well be at risk or financial penalties, surcharges as well as (in extreme cases) imprisonment
Annual Tax Reporting
Annual Tax, specifically in Indonesia, is tax that needs to be paid every year to the tax authority in Indonesia, which is the Directorate General of Tax.
The subjects that are inclined to file the tax report to the tax authority in Indonesia are both individuals as well as corporates that must acquire Tax ID (NPWP) or receive income through profits such as wages, dividends, revenues, and other source of income.
In order to process the Annual Tax Report to the tax authority in Indonesia, first you need to register yourself as an individual, or the company that is subjected to comply with the Annual Tax to the Directorate General of Tax.
The registration will require a series of documents to be submitted, bearing in mind the frequent and sudden changes to tax regulations in Indonesia
When is the deadline to process the Annual Tax to the Indonesia Tax Authority?
The deadline for the Individual Annual Tax would be on the 31st March every year. For the Corporate Annual Tax, it will be on 30 April every year
Can you submit your tax report past the deadline?
- Yes, you can apply for an extension of deadline for the tax report by notifying the Directorate General of Tax beforehand.
- What happens when you’re late on submitting your report past the deadline and are there any exceptions to not file an Annual Tax Report?
- You will be charged 2% monthly interest on the payable tax, and also charged with an administrative fee of Rp.100.000 for individual tax, and Rp.1.000.000 for corporate tax.
- An individual that will only be staying for less than 183 days in Indonesia, within the taxable year, is not obligated to file the Annual Tax Report.
What if you’re leaving Indonesia? What would happen to the obligation of reporting the Annual Tax?
If you’re only leaving Indonesia temporarily, you are still obligated to file the Annual Tax Report. However, if you’re leaving Indonesia permanently, you need to notify the Indonesian Tax Authority regarding your departure and your cancellation of your Tax ID (NPWP)
Individual NPWP Registration – Who is it for and what are the benefits
The Personal NPWP Card is as essential as the Identity Card (KTP). NPWP must be owned by people who have fulfilled certain requirements.
Taxpayer Identification Number or NPWP is a number given to taxpayers that will be used as a personal identification or identity of taxpayers in carrying out their rights and obligations in tax affairs. NPWP must be owned by Indonesian citizens, both individuals and business entities.
The Personal NPWP Card can be said to be as important as the Identity Card (KTP). NPWP must be owned by people who have fulfilled certain requirements, including expatriates who live in Indonesia.
If you are an expat and planning to live or work in Indonesia, it is mandatory for you to register for an NPWP. Registering your NPWP through Peak Solutions will save you time and hassle. We will help provide guidance through the document preparation and submitting your them so you would not have to go the extra mile to make sure the process runs smoothly.
Steps to register your individual NPWP
Company NPWP Registration – Who is it for and what are the benefits
The Tax Identification Number (NPWP) is a set of numbers given to taxpayers (both individual and business entity) for personal identification in carrying out their taxation rights and obligations. NPWP is given to eligible taxpayers who fulfil the subjective and objective requirements, as stipulated in taxation laws and regulations.
In order to carry out all taxation activities, a business must first have an NPWP. The business NPWP is different from the NPWP you have for your personal needs.
If you want to run a business in Indonesia, you must first obtain a company NPWP to make sure you are following the right tax requirements. Peak Solutions assists and makes sure your company is registered and eligible to conduct all tax matters for your business.
Steps to register your company NPWP
LKPM Registration – Who is it for and what are the benefits
Investment Activity Report (LKPM) is an obligation for every business actor as stipulated in Article 15 letter (c) of Law No. 25 of 2007 concerning Capital Investment Article 5 letter (c) and BKPM Regulation No. 5 of 2021 concerning Guidelines and Procedures for Risk-Based Business Licensing Supervision.
LKPM is a report on the progress of Investment realization and problems faced by Business Actors that must be made and submitted periodically (Article 1 point (20) of BKPM Regulation No. 5 of 2021) which are required to submit LKPM online are all Business Actors, except Micro Business Actors, Companies in the upstream oil and gas business sector, banking, non-bank financial institutions and insurance.
Submission of the Investment Activity Report (LKPM) is a requirement for companies investing more than IDR 500,000,000 (approx. USD 33,900). This includes all companies with foreign shareholders as the minimum capital requirement for such is IDR 2,500,000,000. The company must also have an Identification Number to Operate or Nomor Induk Berusaha (NIB).
However, this does not apply to the following:
- Finance companies.
- Insurance companies.
- Banking companies.
- Companies in the oil and gas industry.
- Companies with expired operating licenses.
New companies also have to submit an investment activity report. Once the Online Single Submission (OSS) System issues the NIB to your company, you will have to start submitting the LKPM.
When should I do LKPM report?
LKPM reports should do periodically, There are 4 quarters for each report.
- Quarter 1st: Investment Report from January – March, will be reported in April.
- Quarter 2nd: Investment Report from April – June, will be reported in July.
- Quarter 3rd: Investment Report July – September, will be reported in October.
- Quarter 4th: Investment Report October – December, will be reported in January.
What will happen if I don’t report LKPM for my company?
If a business actor does not report LKPM for their company, they will get administrative sanctions based on Article 47 paragraph (1) BKPM Regulation 5/2021):
- Written or online warning.
- Restriction of Business activities.
- Suspension of business activities and or investment facilities.
- Revocation of business activities and or investment licenses and or investment facilities.
What kind of business does not have to report LKPM?
If your company has an investment value less than Rp. 1.000.000.000 ( one billion rupiah ) or your company is in non bank financial institutions, insurance, banking a s well as upstream oil and gas sector also if your company has a Principle Permit ( IP- Izin Prinsip), Investment Registration ( PI – Pendaftaran Penanaman Modal) and/or an inactive or expired Business License ( IU- Izin Usaha ) thats means you don’t have obligation to make a LKPM report.
Steps to Report your LKPM
Requirements
- Identity and contact details of Company Directors.
- Copy of Deed of Establishment along with Decree Approval from Ministry (SK).
- For Indonesian individuals, KTP, NPWP, email and phone number.
- For Foreign Individuals, valid passport, email and phone number.
- Copy of Amendment of Article of Association along with Decree Approval from Ministry (if any)
- Copy of tax ID.
- Copy of Business License.
- Copy of Registration Number (NIB).
- Financial Report for 3 Months.
- OSS Account Access
What is BPJS in Indonesia?
All Indonesian residents, including expatriates living in Jakarta and other regions for six months or more, must obtain BPJS Kesehatan (Healthcare BPJS) . This is a requirement for all, including those seeking BPJS in Indonesia for foreigners. Individuals can process this type of BPJS independently at a regional level.
However, if you work for a company in Jakarta or any region of Indonesia—for both local and foreign companies—you will also get the so-called BPJS Ketenagakerjaan (Social Security Card). The company provides BPJS to ensure that all employees receive their benefits.
Apart from BPJS, you can have other types of independent insurance according to the company policy imposed.
Healthcare Program in Indonesia (BPJS Kesehatan)
BPJS Kesehatan provides comprehensive healthcare protection, including:
- Basic Healthcare Provider: Choose a doctor or clinic for essential services and contact them anytime..
- Advanced Healthcare Service: If additional treatment is needed, your clinic will refer you to specialists or larger hospitals..
- Hospitalization Service: Covers expenses if hospitalization is required..
BPJS Indonesia: The Classifications
Indonesia’s mandatory health insurance program, BPJS Kesehatan, currently has three tiers: Class I, Class II, and Class III. These tiers are differentiated based on the facilities and services provided.
| Class | Monthly Contribution | Facilities |
|---|---|---|
| Class 1 | IDR 150,000 | Comprehensive facilities with spacious rooms, TVs, air conditioning, private bathrooms, and additional services. |
| Class 2 | IDR 100,000 | Simpler facilities with smaller rooms, no TVs, shared bathrooms, and basic services. |
| Class 3 | IDR 35,000 | Basic facilities with cramped rooms, no TVs, shared bathrooms, and essential services. |
Note: In 2023, the government plans to replace these tiers with a standard inpatient care tier (KRIS), providing uniform services to all participants. Full implementation of KRIS is expected by 2025.
BPJS Indonesia: Contribution Rates
The maximum wage for calculating healthcare contributions is IDR 12 million. If the employee’s wage exceeds this amount, the contributions remain IDR 480,000 for the employer and IDR 120,000 for the employee.
| Contribution Type | Employer Rate | Employee Rate |
|---|---|---|
| Healthcare program | 4% (max IDR 480,000) | 1% (max IDR 120,000) |
Social Security in Indonesia (BPJS Ketenagakerjaan)
BPJS Ketenagakerjaan is mandatory for any company in Jakarta and Indonesia. Therefore, foreign investors or entrepreneurs who expand their company in the country must register their employees to this kind of BPJS.
Otherwise, for employees who work in Indonesia, your company must provide you with the service of obtaining a Social Security Card. However, if you are a freelancer and would like to have one, you can also register as an independent Social Security BPJS member. Here are the benefits if you have a Social Security Card in Indonesia:
| Protection Type | Description | Employer Contribution Rate | Employee Contribution Rate |
|---|---|---|---|
| JHT (Jaminan Hari Tua / Old Age Protection) | This protection will benefit you once you leave the company. Usually, you will get the maximum benefit if you have worked for ten years or more in the same company. | 3.7% | 2% |
| JKK (Jaminan Kecelakaan Kerja / Working Accident Protection) | Suppose you experience any accident during working hours or related to your tasks while working in the company. In that case, you will receive compensation for any wounds or medical treatments performed. | 0.24% – 1.74% | – |
| JK (Jaminan Kematian / Death Protection) | As the name suggests, you will receive benefits if you die while working for the company. | 0.3% | – |
| JP (Jaminan Pensiun / Pension Protection) | You will receive compensation for this protection if you reach the pension age. | 2% | 1% |
The monthly payment for the Social Security program should be paid by both the company and you (the cardholder). Both parties should pay for the BPJS according to the type of protection and their monthly salary. If you are an independent member, you should pay the monthly fee yourself.
The current maximum wage for calculating contributions is IDR 9,077,600 monthly (effective from March 2023 to February 2024). If an employee’s wage exceeds this amount, the employer and the employee will contribute the maximum amount.
Register Your BPJS Indonesia with Peak Solutions
Key benefits of choosing Peak Solutions:
- Simplified BPJS Registration: We’ll handle all the paperwork and formalities, saving you time and effort.
- Personalized Solutions: Our tailored approach ensures your BPJS coverage aligns with your needs.
- Expert Guidance: Benefit from our in-depth knowledge of Indonesian labor laws and regulations.
Regional Taxpayer Indentification number (NPWPD)
The NPWPD plays a crucial role in local tax administration, ensuring taxpayers comply with regulations and facilitating accurate tax reporting at the regional level in Indonesia. The NPWPD is issued to businesses registered at the local level for tax purposes in Indonesia.
Document Requirements
- Bali Visas application form.
- Company deed of establishment and its amendments.
- Indonesian ID Card (KTP) of the Indonesian director or passport of foreign director.
- Taxpayer Identification Number (NPWP) of company.
- Personal Taxpayer Identification Number (NPWP) of director. Photo of the front view of the business.
- Evidence of Land and Building Tax (PBB) payment.
- Lease agreement (lease) or land certificate.
- Site plan.
- Monthly sales report.
Outsource Payroll Management
Payroll processing is one of the most challenging parts of running a business and is extremely time consuming for business owners. At Peak Solutions, we specialize in ensuring your company operates smoothly and stress free, allowing you to focus on making your business grow.
Payroll is processed in a series of steps to ensure that employees are paid accurately and on time, while also complying with the country’s complex tax and social security regulations.
Our payroll services focus on helping you calculate gross wages, subtract all pertinent withholdings and deductions, print pay slips and prepare all employment tax filings.
Our Payroll Management Service Includes
- Monthly Payroll calculation in accordance with the provision of the Labour Laws.
- Income Tax article 21 preparation and submission.
- Salary slip preparation and printing (if required).
- Our basic payroll service is for up to 10 employees, for additional employees there will be additional charge of IDR 100.000 / person.
- Help with ad hoc inquiries.
Required Documents
- List of employees data (employee numbers, NPWP, Status permanent/non permanent, marital status, position, grade (if any), Bank account details (number, name of bank, name of beneficiary).
- Payroll details including basic salary, monthly allowances, bonus or incentives (if any).
- Certificate of BPJS Ketenagakerjaan and Kesehatan.
- List of temporary benefits.
- List of allowances (if any).
- List of reimbursements (if any).
- List of load deductions (if any).
- Additional documents may be requested.
Frequently Asked Questions
How many types of tax in Indonesia
Essentially, there are four types of tax (Pajak) in Indonesia. Personal Income Tax is the type of tax for personal tax obligation, Corporate Income Tax, VAT (Value Added Tax), and Import Tax.
What is corporate income tax in Indonesia?
A company whose domicile is in Indonesia is subject to the tax obligations set by the Indonesian government. Similarly, a foreign company that has a (permanent) establishment in Indonesia – and carries out business activities through this local entity must be under Indonesian tax regulation.
Do I need to report personal income tax as an expatriate?
If you are an expatriate working in Indonesia or engaged in activities that earn money in Indonesia, then you must pay tax accordingly. To find out if you are a taxpayer, contact our consultants for FREE consultations
What is book keeping in accounting?
Bookkeeping involves the documentation of any financial activity that takes place within a business or organization. This includes the generation of source documents for all transactions, operations and events that occur. It is part of the accounting process.
Why do I need a tax consultant to manage my tax and accounting?
The ever-changing laws and regulations in Indonesia makes it hard to stay compliant with the newest policies, especially when speaking about tax reporting, which most of the times leads tax subjects to a failure in understanding the correct tax return requirements. Having an assistance of a reliable tax consultant will massively help cutting off the confusion and providing comprehensive steps to help reporting your tax return, while giving you advises regarding tax matters. A professional tax consultant will make sure your tax and accounting process runs smoothly while staying on top of Indonesia’s Tax regulations.
How to choose the right tax consultant for my business in Indonesia?
Check the brief background of a tax consultant before deciding to work together. Make sure your chosen consultant agrees to communicate in person before charging you with any finance. At Peak Solutions, we provide FREE consultations with our consultants to ensure you obtain the best services that fit your needs.
Can Peak Solutions help with Tax and Accounting Services?
Of course. Our tax consultants handle hundreds of corporate accounts every year. We have the best resources to help with your Tax and Accounting matters.
Our Tax, Visa and Legal consultants help eliminating thousands of worries in Visa applications, Business registrations and Tax reporting process. We are proud to be the market-leading agency in providing Visa and Market Entry services for both national and international clients. Due to our ethics in performances and price settings, more and more people turn to Peak Solutions every year to help with their tax and accounting needs.
