Your Questions Answered: How You’re Being Taxed in Bali
Living in Bali means understanding more than just the lifestyle, it also means knowing your tax obligations.
If you’ve spent any time in Bali, you’ve probably noticed the extra charges on restaurant bills, or even wondered how to pay taxes if you’re a longer-term resident. Taxes can be confusing enough in your own country, let alone in a new one. So, whether you’re here on holiday, working remotely or running a business, read on to find out which taxes you need to know about in Indonesia in 2026.
How Much Personal Income Tax Will You Pay?
Like most countries, Indonesia has a progressive tax system, which means that the more you earn, the higher the percentage of tax you pay. Compared with most Western countries, the rates are still quite favourable.
If you’re employed by an Indonesian company, make sure you know whether the salary you’ve agreed on is gross or net. Gross is your salary before tax, while net is what you actually receive in your bank account after the tax has been taken out. The higher your gross salary, the higher the percentage deducted each month. You can see the current monthly rates on our Personal Tax page.
Understanding your salary, tax deductions and annual filing requirements can help you stay compliant in Indonesia.
On a Working KITAS, your employer should deduct your personal income tax each month. However, you’ll still need to submit an annual tax return, known as an SPT (Surat Pemberitahuan Tahunan), whether your employer deducts your tax or you declare your own income, for example on a Remote Worker KITAS.
Once you have a tax ID, you need to submit your SPT by March 31st each year for the previous year’s income. If you miss the deadline, then there’s a late filing fine that amounts to IDR 100,000 for individuals and IDR 1,000,000 for companies.
Do You Need a Tax ID If You Stay Longer Than 183 Days?
If you’re in Indonesia for more than 183 days, the general rule is that you should register for an NPWP (Nomor Pokok Wajib Pajak), which is your Indonesian tax identification number.
Although the rule sounds simple enough, it poses an issue for people staying here on visit visas. As a foreigner, you can only get an NPWP if you have a KITAS or KITAP. So if you keep doing visa runs and your time in Indonesia adds up to more than six months a year, you can’t register for one while you’re still on a visit visa. In effect, by not having the right paperwork, you end up in a taxation grey zone. If you know you want to stay long term, getting the right KITAS from the start will make it easier to get your taxes sorted and give you peace of mind in the long run.
Is Your Overseas Income Taxed?
The answer to this ultimately depends on your circumstances. Generally, if you’re already paying tax on that income in another country, Indonesia doesn’t aim to tax you twice, although you may still need to declare it here.
However, if you live in Indonesia full time, don’t pay tax on your income anywhere and have the money coming into your Indonesian bank account, you’ll likely need to pay Indonesian income tax on it.
Working remotely from Bali? Your overseas income may still have Indonesian tax implications depending on your circumstances.
Indonesia has double tax agreements (DTAs) with 71 countries, which are intended to prevent you from paying tax twice on the same income. What this means for you will often depend on the agreement with your home country, so speaking to a tax advisor is always a must. We discuss this more in our article Do Digital Nomads and Expats Need to Pay Taxes in Bali?, but as rules constantly change, the best move is to speak to an Indonesian tax advisor.
What Happened to the 0.5% Company Tax?
If you’ve been looking into opening a company in Bali, you might have heard about the 0.5% company tax. Previously, smaller foreign-owned companies could pay just 0.5% of their gross revenue for the first three years, as long as their revenue stayed under IDR 4.8 billion per year. Such tax savings often made it much easier to get a business up and running.
That changed on April 22nd, 2026, when the 0.5% option was removed for newly established foreign-owned companies. New companies now pay tax on their profit instead, at an effective rate of around 11% if their annual revenue is IDR 4.8 billion or less. However, if your company was already using the 0.5% rate, you can continue using it until your time runs out.
Going from 0.5% to 11% might sound like a big jump, but keep in mind that the old rate was charged on gross sales, while the 11% is charged on profit. Compared with many other countries, this is still low. In Italy, for example, corporate tax is 24%, plus a regional tax of 3.9%, according to PwC. For more on what’s changed and what you can expect to pay, read our article Want to Open a PT PMA? How Tax Rules Have Changed.
How Is Dividend Tax Worked Out?
As a shareholder, there are ways you may take money out of your company, such as paying yourself a salary or receiving dividends. For individual Indonesian tax residents, dividends from an Indonesian company are generally taxed at 10%. However, they can be exempt if you reinvest them in Indonesia and meet the investment and reporting requirements. You can find these rules in Government Regulation No. 55 of 2022, Article 9.
Understanding how dividends are taxed in Indonesia can help you make informed decisions about your company profits and personal finances.
If you’re not an Indonesian tax resident, the general withholding rate is 20%, although a tax treaty may bring this down. For example, an individual Singapore tax resident may qualify for a 15% rate under the Indonesia–Singapore tax treaty, provided the treaty conditions are met and the right tax documents are submitted.
What’s the 10% on Your Restaurant Bill?
If you’ve ever looked at your restaurant bill and wondered why it’s quite a bit higher than the prices on the menu, the ‘++’ is usually the reason. This means that a service charge and 10% local tax will be added to your bill. The tax is called PBJT (Pajak Barang dan Jasa Tertentu) and goes to the regency or city government, such as Badung or Denpasar.
The service charge isn’t a tax, and the business decides how much to charge. The 10% local tax is then added to the total including the service charge. So if there’s a 7% service charge as well, you’ll end up paying around 17% more than the menu price.
It mainly applies to hospitality and tourism businesses, including restaurants, cafes, hotels, villas and gyms, who collect it from their guests and pay it to the local government. What’s changed recently is the enforcement, with villas operating short-term rentals now expected to collect this 10%, too.
What Is the Bali Tourist Levy?
If you’re visiting Bali, you’ll also need to know about the tourist levy, which is a charge of 150,000 IDR that was introduced in 2024 and should be paid by all tourists visiting Bali. You can pay online through the official Love Bali website or when you arrive at the airport. You can read more about it here: Bali’s New Tourist Tax Sets Precedent.
When Do You Need to Charge VAT?
Taking profits out of your company? The way dividends are taxed depends on your tax residency and whether you meet the requirements for an exemption.
Many people assume that the 10% on their restaurant bill is VAT. However, this is actually the local tax mentioned above, and VAT is a separate tax altogether. In Indonesia, VAT is called PPN (Pajak Pertambahan Nilai). A company, or even an individual, only has to register to charge VAT once their annual revenue goes over IDR 4.8 billion.
What Is the 2% Service Tax?
If you’ve opened a PT that provides services, such as consulting, marketing or accounting, you might notice that some clients pay you slightly less than you invoiced them for. The reason for this is PPh 23, a 2% tax that companies paying for services usually need to withhold and pay to the tax office on your behalf. So if you invoice a client for IDR 1,000,000, they will pay you IDR 980,000 and send the remaining amount to the tax office.
So, Do You Need to Pay Tax in Indonesia?
Ultimately, this depends on how long you stay, where your income comes from and what you’re doing while you’re here. It’s always best to speak to an expert so that you can make sure you’re doing everything legally.
Need Help?
Tax rules in Indonesia change often, and how they apply to you can sometimes be open to interpretation. Whether you’re planning to stay in Bali or have already been here for a while, it’s much easier to get advice early than to sort out problems further down the line. If you need help with your KITAS, registering for an NPWP, opening a PT PMA or your company’s accounting, our team at Bali Solve would be happy to help. Reach out via WhatsApp or visit our office in Pererenan, near Canggu, to schedule a consultation.
Frequently Asked Questions
Q: Can I get an NPWP on a visit visa?
A: Unfortunately, you can’t because you need a KITAS or KITAP before you can register for a tax ID.
Q: Is the 10% on my restaurant bill VAT?
A: No, it’s a local tax that goes to the regency or city government. VAT is a separate tax.
Q: My employer already deducts my tax. Do I still need to file a tax return?
A: Yes, you still need to submit your annual tax return by March 31st if you have a tax ID, even if your employer has already deducted your tax.
Q: Can a new PT PMA still use the 0.5% tax rate?
A: New PT PMAs can’t, as since April 22nd 2026, they must pay tax on profit instead, at around 11% if annual revenue is under IDR 4.8 billion.
Written by Bali Solve Team
October 21st, 2026
