Tax Obligation for Expatriate

Legal Basis:

1. Law Number 16 Year 2009 The Fourth Amandement to Law Number 6 Year 1983 (General Provisions and Taxation Procedures Law).
2. Law Number 36 Year 2008 The Fourth Amandement to Law Number 36 Year 2008 (Income Tax Law).
3. Director General of Taxation Regulation Number PER-9/PJ/2008 as amended by Director General of Taxation Regulation Number PER-35/PJ/2009.

The Rules:

1. According to provisions of Article 2 paragraf (3) letter a Income Tax Law: individual who resides in Indonesia, an individual who has been present in Indonesia for more than 183 days within any 12 months period, or an individual who has been residing in Indonesia within a particular taxable year and intends to reside in Indonesia.
2. According to provisions of Article 2 paragraph (1) General Prosedures and Provision Tax: Any taxpayer fulfilling subjective and objective requirements in accordance with provisions of taxation legislation shall register with the office of the Directorate General of Taxation whose jurisdiction covers the residence or domicile of the taxpayer and accordingly, he/she is given a taxpayer code number (TIN (Tax Identification Number)/NPWP).
   In the elucidation of this paragraph said that: The subjective requirements are requirements in accordance with the provisions on tax subjects in the 1984 Income Tax Law and its amendments. This means that we are referring to the provisions of Article 2 paragraph (3) letter a the Income Tax Law.
3. According to provisions of Article 3 paragraph (1) General Prosedures and Provision Tax: Any taxpayer shall fill a tax return properly, completely and clearly in Indonesia language by using Latin letters, Arabic numbers, the rupiah currency, and sign and submit it to the office of the Directorate General of Taxation where the taxpayer is registered or validated or other places stipulated by the Director General of Taxation.
4. According to the provisions of Article 3 PER-9/PJ/2008 stated that: The place of registration and or place of business reporting to be confirmed as Taxable Entrepreneurs for new taxpayers and taxpayers other than those referred to in Article 1 number 1 is the tax office whose jurisdiction covers residence or domicile taxpayers.

So tax treatments for Expatriates is:

1. The Expatriates have the intention to stay in Indonesia for more than 183 days within 12 months. It can be seen from the plan to be in Indonesia for 6 months and can also be seen from the Permit. Thus, under the provisions of Article 2 paragraph (3) General Provisions and Taxation Procedures Law, The expatriates are obliged to register to get TIN.
2. If the Tax Payer is already can be categorized as Resident Taxpayer pursuant to Article 2 paragraph (3) General Provisions and Taxation Procedures Law, then to the expatriates, the company as an employer have to cut the income tax law of Article 21 of the income is paid to the expatriates (the calculation is in accordance with the provisions of Director General of Taxation Regulation PER-31/PJ/2009 as amended by PER-57/PJ/2009).
3. If the expatriate already have a TIN, then at the end of the year, this Expatriates must fulfill the obligation to report annual tax return of Personal Income Tax.
4. In its Annual report on the tax return, these expatriates have to report all income received in Indonesia and from abroad, while the tax credits that have been withheld or paid in Foreign Affairs on the reporting of income can be credited in the annual tax returns by using crediting method according to the provisions of Article 24 of the Income Tax Act.
5. If the future expatriates will leave Indonesia forever, he or she can submit a request letter to revoke his/her TIN (the process of deregistration).