Corporate - Taxes on corporate income

Last reviewed - 28 June 2021

Resident corporations are taxed based on worldwide income. A foreign company carrying out business activities through a PE in Indonesia will generally be required to assume the same tax obligations as a resident taxpayer.

Taxable business profits are calculated on the basis of normal accounting principles as modified by certain tax adjustments. Generally, a deduction is allowed for all expenditures incurred to obtain, collect, and maintain taxable business profits. A timing difference may arise if an expenditure recorded as an expense for accounting cannot be immediately claimed as a deduction for tax (see the Deductions section).

Resident taxpayers and Indonesian PEs of foreign companies have to settle their tax liabilities either by direct payments, third party withholdings, or a combination of both. Foreign companies without a PE in Indonesia have to settle their tax liabilities for their Indonesian-sourced income through withholding of the tax by the Indonesian party paying the income.

Corporate income tax (CIT) rates

For fiscal year 2020/21, a flat CIT rate of 22% applies to net taxable income.

For fiscal year 2022 onwards, a flat CIT rate of 20% applies to net taxable income.

Public company discount

Public companies that satisfy a minimum listing requirement of 40% and certain other conditions are entitled to a tax discount of 3% off the standard rate, providing an effective tax rate of 19% for fiscal year 2020/21 and 17% for fiscal year 2022 onwards.

Small company discount

Small enterprises (i.e. corporate taxpayers with an annual turnover of not more than IDR 50 billion) are entitled to a 50% tax discount of the standard rate, which is imposed proportionally on taxable income on the part of gross turnover up to IDR 4.8 billion. Certain enterprises with gross turnover of not more than IDR 4.8 billion are subject to final income tax at 0.5% of turnover.

Final income tax

Certain types of income are subject to a final income tax at a specified percentage of the gross amount of income, without regard to any attributable expenses.

Income Tax rate (%)
Rental of land and/or building 10 (1)
Proceeds from transfers of land and building rights 2.5 (2)
Fees for construction work performance 2/3/4
Fees for construction work planning 4/6
Fees for construction work supervision 4/6
Interest on time or saving deposits and on Bank of Indonesia Certificates (SBIs), other than that payable to banks operating in Indonesia and to government-approved pension funds 20 (3)
Interest on bonds, other than that payable to banks operating in Indonesia and government-approved pension funds 15 (4)
Proceeds from sale of shares on Indonesian stock exchanges. To use this rate, founder shareholders must pay tax at 0.5% of the market price of their shares upon listing; otherwise, gains on subsequent sales are taxed under normal rules 0.1
Income from lottery prizes 25
Certain income received by individuals and corporates (except PEs) with gross turnover of not more than IDR 4.8 billion in one fiscal year 0.5 (5)


  1. This includes land owner's income from build-operate-transfer (BOT) agreements.
  2. Proceeds from the transfer of real estate assets to a Real Estate Investment Fund (Kontrak Investasi Kolektif - Dana Investasi Real Estate or KIK-DIRE) is subject to a 0.5% tax rate.
  3. Different rates apply on interest received from time deposits sourced from export proceeds (Devisa Hasil Ekspor).
  4. If the recipient is a mutual fund, Infrastructure Investment Funds (Dana Investasi Infrastruktur or DINFRA), Real Estate Investments Funds (Dana Investasi Real Estate or DIRE), or Asset-Backed Securities (Efek Beragun Aset or EBA) that operate under a Collective Investment Contract (Kontrak Investasi Kolektif or KIK) registered with the Financial Services Authority (Otoritas Jasa Keuangan or OJK), the tax rate is 5% until 2020 and 10% thereafter.
  5. This regime is optional for eligible taxpayers and only applicable for a certain period of time depending on the type of taxpayer.

Resident companies, PEs, representatives of foreign companies, organisations, and appointed individuals are required to withhold the above final tax from the gross payments to resident taxpayers and PEs.

Special industries and activities

Certain contractually based concessions are available in Indonesia. These include Production Sharing Contracts (PSCs), Contract of Works (CoWs), and Mining Business Licences (Izin Usaha Pertambangan or IUP).

Companies engaged in upstream oil and gas typically have to calculate CIT in accordance with their PSCs. The PSCs can be 'conventional' with CIT effectively based on cost recovery principles or 'gross split', which more closely follow the general CIT rules.   

Certain companies engaged in metal, mineral, and coal mining are governed by CoWs for the income tax calculation. Different provisions may apply to them, pertaining to CIT rates, deductible expenses, and how to calculate taxable income.

Note that such contractual-based concessions are no longer available to new mining projects since the enactment of the Mining Law in 2009. The Mining Law stipulates that general prevailing tax laws/regulations apply to mining projects. Specific tax regulations, however, also exist for non-coal mining IUPs.

Local income taxes

There are no provincial or local taxes on income in Indonesia. For a list of other local taxes, see Regional taxes in the Other taxes section.