Tax Residency in Indonesia: How to Avoid Being Taxed Twice
You have moved to Bali and earn income inside the country or abroad. Who do you now pay tax to, and on what? The difficulty is that Indonesia, your home country, or a third country may all treat you as their taxpayer at the same time. Let us explain in plain terms how this works and what to do so the same income is not taxed twice.
Who Counts as an Indonesian Tax Resident
Indonesia has two statuses:
A tax resident pays tax on worldwide income, wherever it is earned.
A non-resident pays only on Indonesian-sourced income, at a flat rate of 20%.
Your passport does not matter; only the facts do. You become an Indonesian resident if you have spent more than 183 days in the country over any 12 consecutive months, or if you have an "intention to reside." That intention is now proven by documents valid for more than 183 days: a KITAP, a VITAS visa, a KITAS (a limited stay permit, including a work permit), an employment contract of more than 183 days, or a housing lease. With such a document, you are a resident from its date of issue or signing, regardless of the number of days you have actually spent in the country.
Income tax rates for a resident rise together with income (the UU HPP law, UU No. 7/2021):
5% on income up to 60 million rupiah a year;
15% up to 250 million;
25% up to 500 million;
30% up to 5 billion;
35% on amounts above 5 billion.
The first 54 million rupiah a year is not taxed.
Your Home Country Wants Its Share Too
A common mistake is to think, "I left, so I owe nothing back home." Your home country determines residency by its own rules, and they are broadly similar everywhere. They look at two things: how many days you spent in the country, and where your center of vital interests is (family, home, main income, business). Citizenship alone almost never makes you a resident.
You can live in Bali for more than half a year and become an Indonesian resident while keeping your center of life back home. In that case, both countries lay claim to your worldwide income.
Where Double Taxation Comes From and What Removes It
For such cases, countries conclude double taxation avoidance agreements. An agreement does three things.
It resolves the residency dispute. If under domestic laws you are a resident of two countries at once, the agreement looks, in turn, at where you have a permanent home, where your center of vital interests is, where you habitually live, and what your citizenship is. In the end, only one country remains for residency status.
It removes double taxation through a credit. Your country of residence calculates tax on all of your income at its own rates and then deducts what you have already paid in the source country. If the rate at home is higher, you top up only the difference. If the tax in the source country turned out to be higher than what would be charged at home, there is nothing to top up, but the excess is not refunded either. So in practice you pay once, at the higher of the two rates.
Kazakhstan has no agreement in force with Indonesia, so a Kazakh resident will not get the reduced rates, and double taxation will have to be removed under Kazakhstan's domestic rules.
It requires proof of status. An agreement does not apply on its own. To pay at the reduced rate, you must confirm your residency. This requires a certificate of residency (in Indonesia it is called the SKD, or Certificate of Domicile) in the prescribed form. No certificate means the full 20% is withheld, and the agreement will no longer help retroactively. As of 30 December 2025, these rules were tightened (PMK 112/2025): an error in the paperwork strips you of the reduced rate entirely.
What to Do Now
Count your days in each country over the last 12 months and since the start of the year. This is the starting point.
Honestly assess where your center of vital interests is.
Check whether you have dual residency. If you do, determine under the agreement which country it stays with.
Obtain an NPWP (the Indonesian equivalent of a taxpayer ID) if you have become an Indonesian resident. Without it, the rates are higher, and the tax office sees your data anyway, according to the tax office itself.
Obtain a certificate of residency in the country that the agreement recognized as yours. Without it, there will be no reduced rates.
Do not forget about reporting back home. Even after becoming an Indonesian resident, you may still be required to report in your home country for the period while you were its resident, or on income from there.
How We Help You Sort Out Your Status
Residency is rarely obvious: days, the center of vital interests, the agreements, and document validity periods add up to a complex picture, and the cost of a mistake is an extra 20% withholding. We determine your tax status in Indonesia, help you obtain an NPWP and a certificate of residency (SKD), check whether a double taxation avoidance agreement applies, and calculate where and how much you owe.
Not sure which country currently considers you its resident? Contact us: we will go through your situation day by day, document by document, and by agreement, and advise you on how to avoid being taxed twice.
Chief Accountant Legal Indonesia
Therecia Florencia Antolis
