Expert accounting services for companies in Indonesia

Companies in Indonesia are required to pay a number of taxes, depending on their legal form, sector of activity, and whether they hold licenses.

The main ones are:
• PPh 21 — income tax withheld from employees' salaries;
• PPh 23 and 26 — taxes on certain types of payments (including dividends, services, and rent);
• PPh 25/29 — corporate income tax;
• PPN — value added tax (similar to VAT), at a standard rate of 12%;
• PHR and other local taxes — apply depending on location and type of business (particularly relevant for hotels, cafes, and rentals).

NPWP is a unique tax number assigned to a company or individual by the Indonesian Tax Office (DJP). It is the primary identifier for filing tax returns, registering in electronic systems (DJP Online, e-Bupot), opening corporate accounts, participating in tenders, concluding contracts, and hiring employees.

Without an NPWP, a company is not considered a registered taxpayer, which means it cannot operate legally, does not have access to tax reporting, and is subject to potential penalties. Obtaining an NPWP is a mandatory step when starting a business in Indonesia.

Tax reporting in Indonesia is divided into monthly, quarterly, and annual reporting.

• Monthly reporting includes VAT (PPN) returns, employee income tax (PPh 21), and taxes on services and dividends (PPh 23/26). The deadline for submission is the 20th day of the following month.

• Annual reporting includes the company's full tax return (SPT Tahunan Badan), which must be submitted no later than April 30 (for the financial year from January to December).

• Quarterly LKPM reports are submitted through the OSS system and are mandatory for all companies with foreign capital.

Reports are submitted through electronic portals. Failure to meet deadlines or errors in data may result in fines, license suspensions, or tax audits.

Yes, and in most cases, this is a necessary condition for stable and legal work. An accountant in Indonesia must be familiar with local tax legislation, electronic reporting rules, and the specifics of interacting with the DJP (tax office).

A local specialist will help you:
• calculate and pay taxes on time;
• process salaries and BPJS contributions;
• submit LKPM through the OSS system;
• maintain document flow in Indonesian.

It will be extremely difficult for a foreign owner to cope with these tasks without professional help. Errors made when filing reporton your own often result in fines and blocked access to government systems.

Penalties in Indonesia are imposed for both late filing and errors in tax returns.

• For late filing of VAT (PPN) returns — a fixed penalty of IDR 500,000.
• For late filing of income tax returns (SPT) — up to 2% of the amount owed for each month of delay.
• Failure to submit LKPM may result in the freezing or cancellation of business licenses through OSS.
• Administrative sanctions, blocking of electronic services, and problems with subsequent renewal of permits are also possible.

The system is strictly controlled and automated, so even minor violations are automatically recorded and may result in sanctions.

Yes, there is a tax incentive for small and medium-sized enterprises in Indonesia: companies with an annual turnover of less than 50 billion rupiah are entitled to a 50% discount on the income tax rate applied to the first 4.8 billion rupiah of taxable income.

In addition, there are special economic zones, such as Batam Island, where preferential tax and customs regimes apply. Registering a company in such zones allows you to optimize costs and simplify import and export operations.