corporate income tax

Guide to Corporate Income Tax 2024


February 18, 2024


In 2024, significant changes have been implemented regarding corporate income tax payments in Indonesia. The government has instituted measures to enhance tax payment efficiency, allowing for easier deduction of expenses from annual profits to mitigate tax liabilities.

However, compliance demands have heightened, necessitating precise reporting of withholding tax by companies. The government has augmented validation mechanisms to ensure the accuracy of reported information.

This article elucidates the 2024 alterations to corporate income tax and guides maximizing allowable deductions.

Corporate Income Tax Structure in Indonesia

Companies in Indonesia are categorized into three income tax brackets based on annual revenue:

  1. 0.5% of gross revenue
  2. 11% from profit for revenue between 4.8-50 billion IDR
  3. 22% from profit for revenue exceeding 50 billion IDR

Corporate Income Tax Calculation

Taxable income is computed as gross income minus allowable deductions and then subjected to the relevant tax rate based on annual revenue.

Allowable Deductions for Corporate Income Tax Reduction

For companies with revenue below 4.8 billion IDR, deductions are not applicable as tax is computed based on gross revenue. However, for those with revenue exceeding 4.8 billion IDR, deductions are contingent upon accurate withholding tax reporting.

Most business expenses are deductible, subject to withholding tax rates as per the following table:

Business Expense Withholding tax (WHT)
Raw materials purchase
Salary PPH 21, starts from 5% – 35%
Rental PPH 4.2: 10%
Marketing and Promotion WHT: 2% (for residence agency) or 20% (for national agency)Foreign VAT: 10% (If you purchase Ads, for example, or foreign subscriptions)
Foreign exchange losses
Research and Development WHT: 2% (for residence agency) or 20% (for the national agency)

Corporate Income Tax Reporting Deadline

All businesses are mandated to report their corporate income tax by April 30, 2024.

Indonesia Core Tax System

Commencing July 2024, the Indonesian government is implementing a new tax system integrating corporate bank accounts directly into its framework. This initiative aims to streamline tax recording processes and deter tax evasion. While rollout specifics are pending, meticulous tax reporting and expense recording remain imperative for optimizing income tax obligations.

Still Have Questions About Tax in Indonesia?

Navigating Indonesia’s tax landscape can be intricate, requiring specialized knowledge and adherence to evolving regulations. At Come Visit Indonesia, we empower businesses with comprehensive tax consultancy services designed to streamline compliance and optimize financial strategies.

Our team of experienced tax professionals possesses a deep understanding of Indonesian tax laws and regulations. We guide you through the intricacies of corporate tax reporting, ensuring accuracy, timeliness, and adherence to all legal requirements.

Furthermore, we provide valuable insights into tax planning strategies tailored to your specific business operations. This proactive approach helps you minimize tax liabilities and maximize financial benefits within the legal framework.

Partner with Come Visit Indonesia and gain the clarity and confidence you need to navigate Indonesia’s corporate tax landscape with ease. Contact us today to schedule a consultation and unlock the full potential of your business in Indonesia.


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Frequently Asked Questions

Yes, most nationalities require a visa to enter Indonesia. Visa requirements vary depending on your nationality and length of stay. We recommend checking with the Indonesian Embassy or Consulate in your home country for the latest information.

There are two main types of business entities in Indonesia:

  • PT PMA (Penanaman Modal Asing): Foreign-owned company with majority foreign ownership.
  • PT PMDN (Penanaman Modal Dalam Negeri): Domestic company with majority Indonesian ownership.

Our consultants can help you choose the right type of entity for your business needs.

The Indonesian tax system can be complex. We recommend consulting with a tax advisor to understand your specific obligations. However, we can provide general information about corporate income tax, personal income tax, and value-added tax (VAT).

Obtaining business licenses in Indonesia can be a time-consuming and complex process. Our agents can help you navigate the process and ensure you obtain the necessary licenses for your business.

Navigating the Indonesian market can be challenging for foreign businesses. Agents can provide invaluable assistance by:

Local Expertise: Our agents have deep knowledge of Indonesian culture, regulations, and business practices.

Efficiency and Speed: We can help you avoid delays and simplify the entry process.

Cost Savings: We can negotiate better deals with local suppliers and service providers.

Risk Mitigation: We can help you identify and manage potential risks associated with entering the Indonesian market.