The map
| Article | Payments covered | Main rates | Final? |
|---|---|---|---|
| PPh 21 | Salaries, wages, pensions, fees and honoraria to individuals | TER / Pasal 17; 50% × Pasal 17 for non-employees | No (except severance, some honoraria) |
| PPh 22 | Imports; purchases by government and certain buyers; sales of fuel, cement, steel, cars and other goods | Imports 2.5% with API, 7.5% without; government purchases 1.5% | No |
| PPh 23 | Services, rent of assets, royalties, interest, dividends and prizes to residents | 2% services/rent; 15% royalties, interest, dividends, prizes | No |
| PPh 25 | Monthly instalments by the taxpayer itself | 1/12 of last year's tax (adjusted) | No |
| PPh 26 | Most payments to non-residents | 20%, treaty may reduce | Yes for most |
| PPh 4(2) | Rent of land/buildings, construction, property sales, deposit interest, bond interest, lottery prizes, UMKM turnover | 0.5% – 25% | Yes |
Work out the withholding and net payment on an invoice.
Withholding Tax Calculator →PPh 23 in practice
PPh 23 is withheld by companies, government bodies and appointed individuals when they pay residents for services or certain income. The 2% service rate applies to a long list of services in PMK 141/2015 — technical, management, consulting, legal, accounting, cleaning, catering, security, IT, design, advertising production and more. The base is the gross fee excluding PPN, and excludes reimbursed materials when invoiced separately.
The vendor receives an e-Bukti Potong and credits the tax against its own annual income tax. Without an NPWP or NIK the rate doubles.
PPh 26 and treaties
Payments to non-residents — interest, royalties, service fees, dividends, and branch profits after tax — attract 20%. Indonesia has tax treaties with around 70 countries, which typically lower rates on dividends, interest and royalties to 10%–15% and can exempt business profits without a permanent establishment. To claim treaty rates the recipient must provide a Certificate of Domicile in DJP's prescribed form before the payment and pass beneficial-ownership tests.
Final taxes under PPh 4(2)
A final tax settles the income-tax liability on that income completely. The payer withholds it, or the recipient pays it directly, and the income is reported in the annual return separately from progressive income. Costs related to final-taxed income are not deductible.
| Income | Rate |
|---|---|
| Rent of land and/or buildings | 10% |
| Transfer of land and/or buildings | 2.5% (1% simple homes) |
| Construction work — small qualified contractor | 1.75% |
| Construction work — other qualified contractors | 2.65% |
| Construction work — no certificate | 4% |
| Construction consulting — with / without certificate | 3.5% / 6% |
| Bank deposit and savings interest | 20% |
| Bond interest (residents) | 10% |
| UMKM turnover | 0.5% |
Deadlines for withholders
- Deposit withheld tax by the 15th of the following month.
- File the monthly return — PPh 21/26, or the unified return for PPh 4(2), 15, 22, 23 and 26 — by the 20th.
- Issue e-Bukti Potong to payees through Coretax for every withholding.
Each article has many sub-rules and exemptions. Check the specific payment with DJP or a registered consultant.