Indonesia Income Tax Rates 2026: Personal, Corporate and Capital Gains Tax

A practical guide to Indonesia's progressive individual income tax rates, tax residency, non-resident withholding, company taxation and real estate transfers, with the 2017-2018 rates retained for historical reference.

Indonesia income tax framework

Indonesia's principal income tax legislation is Law No. 7 of 1983 on Income Tax, as amended, including by Law No. 7 of 2021 on Harmonization of Tax Regulations (HPP Law). Administration and implementing rules are issued by the Directorate General of Taxes (Direktorat Jenderal Pajak, DJP). The General Tax Provisions and Procedures Law (KUP), as amended, governs compliance and administration.

The personal income tax system generally taxes resident individuals on taxable income after allowable deductions and personal exemptions, while non-residents are generally taxed on Indonesian-source income under specific withholding provisions, subject to treaty relief.

Individual income tax brackets in 2026

Article 17(1)(a) of the Income Tax Law sets progressive rates for individual taxpayers. The brackets below apply to annual taxable income in Indonesian rupiah (IDR), not to gross salary.

These are marginal rates: only income falling within each bracket is taxed at that bracket's rate. The 35% top band and the IDR 60 million first band were introduced by the HPP Law and were not part of the 2017-2018 schedule.

Personal tax-free allowances (PTKP)

Non-taxable income (PTKP) reduces the amount subject to the progressive rates. The commonly applicable annual base allowance is IDR 54,000,000 for an individual taxpayer, with an additional IDR 4,500,000 for married status and for each qualifying dependent, up to three dependents, subject to the relevant rules. Certain spouse-income arrangements have separate treatment.

PTKP is an allowance deducted in computing taxable income, not a separate zero-rate tax bracket. Payroll withholding under Article 21 may use effective-rate tables for monthly deductions; the final annual liability is reconciled under the applicable rules.

Residents and non-residents

Under Article 2 of the Income Tax Law, individual residence can arise from domicile in Indonesia, presence in Indonesia for more than 183 days in a 12-month period, or presence with an intention to reside, as specified by law and implementing rules. A treaty may alter the result where dual residence arises.

Article 26 generally imposes 20% withholding on specified gross Indonesian-source payments to non-resident taxpayers without an Indonesian permanent establishment, unless a different statutory rule or applicable double-tax treaty provides relief. This is not a universal 20% rate for every non-resident transaction. Treaty relief generally requires prescribed evidence of tax residence and compliance with Indonesian documentation rules.

Payments covered by Article 26 can include dividends, interest, royalties, rent and certain service-related income. Income attributable to an Indonesian permanent establishment is generally taxed under the rules applicable to that establishment, rather than simply under gross-basis Article 26 withholding.

Capital gains, property and rental income

Sale of land or buildings

Under Article 4(2) and its implementing rules, transfers of rights over land and/or buildings are generally subject to a final income tax of 2.5% of the gross transfer value for ordinary qualifying transfers, subject to exemptions and special categories. The old page's general 5% seller tax should not be used as the standard current rate. The buyer may separately face BPHTB, a local duty on acquisition of land/building rights, subject to regional rules and exemptions; it is distinct from the seller's income tax.

Rental income

Rental of land and/or buildings is generally subject to 10% final income tax on gross rental value under the relevant Article 4(2) rules for qualifying domestic arrangements. Different treatment may apply for non-residents, treaties and other types of leased assets.

Shares and other gains

Gains on the sale of assets generally fall within taxable income unless a special final-tax rule or exemption applies. Sales of shares on an Indonesian stock exchange are generally subject to 0.1% final tax on gross sale proceeds, with additional special rules potentially applying to founder shares. Unlisted-share transfers and cross-border transactions require separate analysis.

Corporate income tax in Indonesia

Article 17(1)(b), as amended, generally provides a 22% corporate income tax rate for Indonesian corporate taxpayers and permanent establishments. Certain qualifying publicly listed companies may receive a lower rate where statutory conditions are met.

Eligible smaller companies may receive relief under Article 31E, which provides a 50% reduction of the standard rate on a qualifying portion of taxable income for companies meeting the gross-turnover limit. Separately, qualifying micro, small and medium enterprises may be eligible for a 0.5% final tax on gross turnover under the applicable regime, subject to turnover limits, exclusions and time limits. These are distinct mechanisms and should not be combined automatically.

Withholding on cross-border payments

Indonesian payers should review Article 26, relevant treaties and beneficial-ownership/documentation requirements before withholding on payments to foreign companies. A flat 20% domestic rate can be reduced by a qualifying treaty, but a 10% treaty rate must not be assumed for all countries or payment categories.

Historical income tax rates: 2017-2018

For comparison with the period originally covered by this page, Indonesia's individual income tax bands were:

The base PTKP allowance was IDR 54 million per year, subject to additional allowances. The standard corporate income tax rate was generally 25% in that period. These figures are historical and should not be used for 2026 tax computations.

Tax registration, filing and practical considerations

• Registration: Individuals and entities with Indonesian tax obligations should check applicable registration and taxpayer-identification requirements, including integration with the national identity number where relevant.
• Payroll: Employers generally withhold employee income tax under Article 21 and report it in accordance with applicable rules.
• Business withholding: Domestic and cross-border payments may attract Articles 23, 26 or other specific withholding rules.
• Tax treaties: Treaty rates and residence tests vary by country and income type; confirm documentation before claiming relief.
• Tax returns: Filing obligations, deadlines and reporting methods depend on taxpayer classification and current DJP administrative rules.

Official Indonesian tax resources and legislation

Consult the following government sources for legislation, administrative guidance, treaty documentation and current procedures:

• Directorate General of Taxes (DJP) - official tax administration website
• BPK regulations database - official Indonesian legislation (search for Law No. 7 of 1983 and Law No. 7 of 2021)
• Ministry of Finance legal documentation database (income tax regulations and implementing provisions)
• DJP tax regulations portal

Last editorial update: 23 October 2026. This is general tax information, not a substitute for checking the current Indonesian legal text and individual circumstances.