Getting to Grips with Regional Taxes

Deloitte’s are a great source of information regarding taxes in Indonesia and in their tax guides they give readers the basics of Indonesia’s tax system including the range of taxes imposed on individuals and corporate tax payers. These include Corporate Income Tax, Individual Income Tax, Withholding Tax on remuneration and third-party payments, Value Added Tax, Luxury Goods Sales Tax and Regional Taxes.

But what are Regional Taxes?

Regional Taxes are levied by regional governments to finance and support regional development. As a result, these taxes can vary from province to province but they will all include Hotel Taxes, which are applicable to hotels, villas, losmen and pondok wisata licenses; Restaurant Taxes; Entertainment Taxes and Advertising Taxes.

Hotel Tax

The Hotel Tax is levied on all services provided by a property at 10-percent from Gross Income.

Restaurant Tax

The Restaurant Tax is levied on all services provided by a restaurant, cafeterias, canteens, food stalls and bars. This is currently 10-percent from Gross Income.

Entertainment Tax

The Entertainment Tax applies to all kinds of displays such as shows and games, which are enjoyed for free and is levied on the amount of money received by the entertainment provider, including rebates and free tickets. There are special rates for the Entertainment Tax depending on activities. For example:

  1. Special Entertainment Tax rates in the form of steam baths/ spa, discotheques, karaoke, night clubs and massage parlors, set at 12.5% ​​(twelve-point-five-percent)
  2. For folk/ traditional entertainment, the tax rate is set at 5% (five-percent)
  3. Folk/ traditional art entertainment as referred to in paragraph (3) which is organized by a traditional village, the tax rate is set at 0% (zero percent)

*(Badung district regulation number 17 of 2011 on entertainment tax)

Advertising Tax

Advertising Tax applies to objects, tools, actions or media whose various forms and patterns are designed for commercial purposes to introduce, recommend, promote or attract public attention to goods, services, people or entities, which can be seen, read, heard, felt and/ or enjoyed by the public. The tax rate for this tax is 25% from the rental value of the billboard, the calculation of which is based on the sum of the sales value of the advertisement tax object and the value of strategic management of advertising.

*(regulation of the Regent of Badung number 32 2012 about calculation of advertising rental value)

How to pay Regional Taxes

Before making tax payments you need to register for an NPWPD, which is a Regional Tax ID number. This is different from an NPWP, which is a State Tax ID number. Once you’ve successfully got your NPWPD, you’ll have access to open the government website, where you make all relevant tax declarations and then pay through your Indonesian company bank account.

When do I pay my taxes?

Tax bills have to be paid a maximum of 10-days after receiving an E-billing statement from the Government website.

If you’d like more information go to our Canggu Office (Canggu Avenue, Jalan Pantai Batu Bolong 55) on Friday, August 5 at 10am.

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Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

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Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.