Deloitte’s are a great source of information regarding taxes in Indonesia and in their tax guides they give readers the basics of Indonesia’s tax system including the range of taxes imposed on individuals and corporate tax payers. These include Corporate Income Tax, Individual Income Tax, Withholding Tax on remuneration and third-party payments, Value Added Tax, Luxury Goods Sales Tax and Regional Taxes.
But what are Regional Taxes?
Regional Taxes are levied by regional governments to finance and support regional development. As a result, these taxes can vary from province to province but they will all include Hotel Taxes, which are applicable to hotels, villas, losmen and pondok wisata licenses; Restaurant Taxes; Entertainment Taxes and Advertising Taxes.
The Hotel Tax is levied on all services provided by a property at 10-percent from Gross Income.
The Restaurant Tax is levied on all services provided by a restaurant, cafeterias, canteens, food stalls and bars. This is currently 10-percent from Gross Income.
The Entertainment Tax applies to all kinds of displays such as shows and games, which are enjoyed for free and is levied on the amount of money received by the entertainment provider, including rebates and free tickets. There are special rates for the Entertainment Tax depending on activities. For example:
- Special Entertainment Tax rates in the form of steam baths/ spa, discotheques, karaoke, night clubs and massage parlors, set at 12.5% (twelve-point-five-percent)
- For folk/ traditional entertainment, the tax rate is set at 5% (five-percent)
- Folk/ traditional art entertainment as referred to in paragraph (3) which is organized by a traditional village, the tax rate is set at 0% (zero percent)
*(Badung district regulation number 17 of 2011 on entertainment tax)
Advertising Tax applies to objects, tools, actions or media whose various forms and patterns are designed for commercial purposes to introduce, recommend, promote or attract public attention to goods, services, people or entities, which can be seen, read, heard, felt and/ or enjoyed by the public. The tax rate for this tax is 25% from the rental value of the billboard, the calculation of which is based on the sum of the sales value of the advertisement tax object and the value of strategic management of advertising.
*(regulation of the Regent of Badung number 32 2012 about calculation of advertising rental value)
How to pay Regional Taxes
Before making tax payments you need to register for an NPWPD, which is a Regional Tax ID number. This is different from an NPWP, which is a State Tax ID number. Once you’ve successfully got your NPWPD, you’ll have access to open the government website, where you make all relevant tax declarations and then pay through your Indonesian company bank account.
When do I pay my taxes?
Tax bills have to be paid a maximum of 10-days after receiving an E-billing statement from the Government website.
If you’d like more information go to our Canggu Office (Canggu Avenue, Jalan Pantai Batu Bolong 55) on Friday, August 5 at 10am.