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Individual Income Tax Rates

Changes in rates and brackets for personal income tax, to better reflect fairness. The layers of taxes and their tax rates are based on Article 17 paragraph (1) Harmonization of Tax Regulation Law Number 7 the Year 2021, namely:

 

Rate Layer Income Tax Regulation Harmonization of Tax Regulation Lax
Range Income Tax Rate Range Income Tax Rate
I 0 – Rp 50 Million 5% 0 – Rp 60 Million 5%
II >Rp 50 – 250 Million 15% >Rp 60 – 250 Million 15%
III >Rp 250-500 Million 25% >Rp 250-500 Million 25%
IV >Rp 500 Million 30% >Rp 500 Million – 5 Billion 30%
V >Rp 5 Billion 35%

 

The calculation of individual income tax is applied to income whose amount exceeds the limit of Non-Taxable Income (PTKP). In the Harmonization of Tax Regulation Law, the amount of PTKP is for single individuals of IDR 4.5 million per month or IDR 54 million per year. An additional IDR 4.5 million is given for married taxpayers and an additional IDR 4.5 million for each dependent of a maximum of 3 people

 

Imposition of taxes on benefits in kind

Benefit in kind to employees can be imposed by the employer and becomes income for employees. Certain benefits in kind is not income for the recipient in article 4 paragraph (3) letter d in the Harmonization of Tax Regulation Law as follows:

  1. provision of food/drink for all employees
  2. benefit in kind in certain areas
  3. benefit in kind due to work requirements, for example: work safety equipment or uniforms
  4. benefit in kind sourced from the APBN/APBD
  5. benefit in kind with certain types and limitations.

 

The Gross Circulation Limit is Not Taxable For Individual Taxpayers

Individual entrepreneurs who calculate income tax with a final rate of 0.5% (Government Regulation No. 23 the Year 2018) and have a gross turnover of up to IDR 500 million a year are not subject to income tax.

 

Corporate Income Tax Rates

The latest corporate income tax rates are in accordance with Article 2 Government Regulation No. 30 the Year 2020 which has been stipulated as Law No. 2 the Year 2020, which is 22% which applies to the fiscal year 2022 and beyond.

 

Corporate Income Tax Rate

Tax year Rate UU PPh Rate RUU HPP
The year 2020 – 2021 22%  
The year 2022 etc 20% 22%

MSME business actors in the form of domestic entities will still be given an incentive to reduce tariffs by 50% as regulated in Article 31E Income Tax Regulation No. 36 the Year 2008. For individual taxpayers with a certain gross turnover, an exemption from the imposition of tax on gross turnover of up to Rp500 million is granted.