Do You Need a Tax ID NPWP in Indonesia as a Foreigner? A Guide to Getting Your NPWP and Saving Money on Taxes in 2025

If you're planning to work, invest or do business in Indonesia, you need an NPWP. An NPWP will allow you to file taxes, and without one, you'll be paying a higher tax rate - a flat 20% or a surcharge of 20%, which is far higher than the standard rate - on all your income. This means you can easily reduce your tax burden by getting one. Furthermore, it will also allow you to access important financial services in Indonesia and help you to save money and hassle abroad. Read on to find out more about what an NPWP is, how to get one, and why you need one if you plan on being in Indonesia for longer than 6 months. 

In Indonesia taxes are administered by the Directorate General of Taxes (Direktorat Jenderal Pajak / DJP) under the Ministry of Finance.

What is an NPWP?

NPWP stands for Nomor Pokok Wajib Pajak and is technically your Taxpayer Identification Number in Indonesia. It will identify you in Indonesia’s tax system and will be issued by the Directorate General of Taxes (DJP). Every individual or company that earns an income in Indonesia must get an NPWP if they meet certain residency or income requirements. 

Do I Need an NPWP as a Foreigner in Indonesia? 

It is necessary to register for an NPWP if you:

• Live in Indonesia for more than 183 days a year, and therefore are considered as an Indonesian taxpayer 

• Earn income from Indonesian sources or companies 

• Have an investment or work related KITAS/KITAP residence permit

• Run business in Indonesia 

• Own a commercial property in Indonesia

If you are caught engaging in commercial activities without an NPWP, you may be subject to an additional penalty of 20% of all taxes owed, as well as a potential fine of up to four times the amount of unpaid taxes. In extreme cases, you could also face imprisonment of 6 months to 6 years for evading taxes. However, it is important to note that you can’t get an NPWP on a visa obtained for tourism purposes, as it’s against the terms of your visa to work whilst in Indonesia. 

Benefits of Getting an NPWP: 

By getting an NPWP, you will be eligible for immediate tax reductions and deductions and will be able to save yourself from being taxed in more than one country. You can also access different financial services in Indonesia that would otherwise be off-limits. 

Having NPWP avoids the surcharge and accesses the resident tax rates in Indonesia.

Immediate Tax Reductions: 

• Property rent or long-term lease income: drops from 20% to 10% with NPWP

• Dividend payments: also drops from 20% to 10% with NPWP

• Salary income from your business: your business can access progressive salary rates of taxation depending on income (0%-34%) instead of a flat 20%

• Gets rid of the 20% surcharge applied to all income, which is standardly applied to all income earned by those without an NPWP

Available Tax Deductions After Getting an NPWP: 

• Personal allowance: IDR 54 million annually

• For those who are married: an extra IDR 4.5 million deduction 

• Dependent allowances: IDR 4.5 million per child (maximum 3 children)

• Professional/occupational expenses: Up to IDR 6 million annually

Save Money and Stress Abroad

• Avoid double taxation through Indonesia’s tax treaties 

• Be able to provide proof of residency for international banking and KYC checks

• Get credit for foreign taxes paid

• Reduced withholding tax rates on international income

Once you get your NPWP, you’ll be able to submit your annual tax return (for individuals) or monthly tax reports (for businesses). Even if you didn’t earn any income during the tax year, you will still need to submit an SPT (annual tax return). 

For individuals filing annual income tax, the progressive tax brackets after getting an NPWP are as follows: 

• 5%  IDR 60 million

• 15% IDR 60-250 million

• 25% IDR 250-500 million

• 30% IDR 500 million - 5 billion

• 35% above IDR 5 billion

Taxpayers are responsible for calculating, paying, and reporting their own taxes, while the government reserves the right to review these declarations through audits.

As an example of this in practice, if you earn IDR 100 million annually, you’ll get IDR 54 million annually tax-free, and will then be charged 5% on the first IDR 60 million, and 15% on anything over the 60 million threshold. 

For Corporate Tax: 22% standard rate (19% for public companies), VAT: 12% in 2025.

Access Financial Services: 

Another reason to get an NPWP as a business person is being able to access business or banking applications. With one you can: 

• Open a corporate bank account in Indonesia 

• Transfer large amounts of money 

• Buy a property 

• Trade in stocks and get Investment accounts 

• Register your company and become a company director/shareholder

• Get a business license 

Obtaining your NPWP (Indonesian Tax Identification Number) is a crucial step in becoming a fully compliant resident of Indonesia. Beyond being a legal requirement, having an NPWP opens the door to significant tax benefits and a broader range of financial opportunities, whether you're an individual or managing a business. Equally important is ensuring proper tax compliance throughout your stay. When the time comes for you to leave Indonesia and deregister your NPWP, the tax office will conduct a final audit to confirm all tax obligations have been met. Staying compliant from the beginning not only prevents unexpected costs down the line but also ensures a smooth and stress-free exit process.

How to Get Your NPWP 

It is possible to get your NPWP yourself online. However, it can be quite a confusing and tricky process, especially if you can’t speak Indonesian. That’s why we’d recommend getting assistance from your employer, HR, or through an agent like ourselves, here at Bali Solve. We can save you from all the hassle and stress of applying and get your NPWP back to you in no time.

Once you have NPWP, you must file personal welfare declarations annually by the end of March, even if your income is zero.

You’ll need: 

• A valid passport 

• KITAS/KITAP residence permit 

• Proof of address 

• Employment contract or business documentation 

Please note that if you have a tourist visa in Indonesia, you can’t get an NPWP. 

If you need assistance with your NPWP registration or tax planning in Indonesia, our experienced team is here to support you every step of the way. We’ve helped numerous individuals and businesses successfully navigate Indonesia’s often complex tax landscape. Whether you’re looking to ensure full compliance, maximize your tax savings, or simply avoid the headaches of paperwork and bureaucracy, we offer tailored solutions designed to meet your specific needs. Let us help you streamline the process with an efficient tax strategy and ensure all your documentation is handled correctly from the start. Visit our office in Pererenan to schedule a consultation or reach out via WhatsApp. Our team of dedicated experts is available to assist you.

Written by Bali Solve Team
21st September 2025