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    An Indonesian Citizen As A Foreign Tax Resident

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    melsy
    An Indonesian citizen staying outside Indonesia for more than 183 days can apply to be classified as a foreign tax resident, subjecting their Indonesian income to withholding tax and allowing them to not file annual tax returns. The key differences between resident and non-resident taxpayers are that residents pay tax on worldwide income while non-residents only pay tax on Indonesian source income, residents pay tax on net income while non-residents pay tax on gross income, and residents must file annual returns while non-residents fulfill tax obligations through withholding tax.

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    An Indonesian Citizen As A Foreign Tax Resident

    Uploaded by

    melsy
    2 views1 page
    An Indonesian citizen staying outside Indonesia for more than 183 days can apply to be classified as a foreign tax resident, subjecting their Indonesian income to withholding tax and allowing them to not file annual tax returns. The key differences between resident and non-resident taxpayers are that residents pay tax on worldwide income while non-residents only pay tax on Indonesian source income, residents pay tax on net income while non-residents pay tax on gross income, and residents must file annual returns while non-residents fulfill tax obligations through withholding tax.

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    AN INDONESIAN CITIZEN AS A FOREIGN TAX RESIDENT

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    An Indonesian citizen staying outside Indonesia for more than 183 days can apply to be classified as a foreign tax resident, subjecting their Indonesian income to withholding tax and allowing them to not file annual tax returns. The key differences between resident and non-resident taxpayers are that residents pay tax on worldwide income while non-residents only pay tax on Indonesian source income, residents pay tax on net income while non-residents pay tax on gross income, and residents must file annual returns while non-residents fulfill tax obligations through withholding tax.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2 views1 page

    An Indonesian Citizen As A Foreign Tax Resident

    Uploaded by

    melsy
    An Indonesian citizen staying outside Indonesia for more than 183 days can apply to be classified as a foreign tax resident, subjecting their Indonesian income to withholding tax and allowing them to not file annual tax returns. The key differences between resident and non-resident taxpayers are that residents pay tax on worldwide income while non-residents only pay tax on Indonesian source income, residents pay tax on net income while non-residents pay tax on gross income, and residents must file annual returns while non-residents fulfill tax obligations through withholding tax.

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    AN INDONESIAN CITIZEN AS A FOREIGN TAX RESIDENT

    An Indonesian citizen staying outside Indonesia for more than 183 days within a 12-
    month period can apply for a certificate from the DGT (Directorate General of Taxation)
    on his/her tax status as a foreign tax resident if the citizen meets certain requirements
    and can prove the intention of becoming a foreign tax resident when leaving Indonesia
    (such as by providing a long-term working contract or proof of a residency in the other
    country more than 183 days).
    If the DGT approves the application, the Indonesian citizen is treated as a non-Indonesian
    taxpayer since the date stated in “Certificate of Indonesian Citizen as a Foreign Tax
    Resident” that issued by DGT.
    As such, any Indonesian-sourced income earned or received by the citizen concerned will
    be subject to the withholding of Article 26 final income tax.
    In addition, the citizen can also apply to the DGT for a noneffective taxpayer status so
    that the citizen does not have to file annual individual income tax return during his/her
    stay outside Indonesia.
    If he/she wants to file annual individual income tax return during his/her stay outside
    Indonesia, his/her foreign-source income will be reported as non-taxable income, and
    his/her Indonesian-sourced income as final-taxable income.
    PRINCIPAL DIFFERENCES between a Resident Taxpayer and a Non-resident Taxpayer are
    in the manner that they fulfill their tax obligation, among others are as follows :
    a. A Resident Taxpayer is taxed on his/her income derived from Indonesia and
    overseas (worldwide incomes), whereas a Non-resident Taxpayer is taxed only on
    the income originating from sources in Indonesia;
    b. A Resident Taxpayer is taxed based on the net income with a general rate, whereas
    a Non-resident Taxpayer is taxed based on the gross income with an appropriate
    rate, and
    c. A Resident Taxpayer is obliged to file annual individual income tax return as means
    for assessing his tax obligation in a taxable year, whereas a Non-resident Taxpayer
    is not, because his/her tax obligation are fulfilled through withholding tax, which is
    final in nature.
    A Non-resident Taxpayer doing business or conducting activities through permanent
    establishment in Indonesia are equivalent with a Resident Taxpayer in the manner of the
    fulfillment of his/her taxation as regulated in Laws on Income Tax and Laws on General
    Provision and Tax Procedures.

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