Indonesia’s standard corporate income tax rate is 22%, with reduced rates available to qualifying companies. Foreign-owned companies must calculate their taxable income, account for allowable deductions and tax losses, and settle their tax liabilities through monthly installments and annual tax returns.
Corporate Income Tax Rates in Indonesia
Indonesia applies a standard corporate income tax rate of 22% to resident companies, including foreign-owned limited liability companies (PT PMAs), and permanent establishments.
Eligible domestic corporate taxpayers may receive reduced rates under Article 31E.
| Annual Gross Turnover | Applicable Tax Treatment |
|---|---|
| Up to IDR 4.8 billion (USD 300,000) | An effective rate of 11% on taxable income |
| Above IDR 4.8 billion (USD 300,000) and up to IDR 50 billion (USD 3.13 million) | An 11% rate on the proportion of taxable income attributable to the first IDR 4.8 billion of turnover, with the remainder taxed at 22% |
| Above IDR 50 billion (USD 3.13 million) | The standard 22% rate |
Qualifying publicly listed companies may receive a further three-percentage-point reduction, bringing their corporate income tax rate to 19%, subject to applicable shareholding and other eligibility requirements.
Get assistance with your corporate tax calculations and filings. Email MAP Resources Indonesia at info@mapresourcesindonesia.com
Indonesia also has a separate 0.5% final income tax regime for qualifying businesses with annual gross turnover not exceeding IDR 4.8 billion (USD 300,000). Under the revised 2026 rules, ordinary limited liability companies, including newly registered PT PMAs, cannot enter this regime. Previously eligible companies may continue using it until their existing entitlement expires.
How Is Corporate Income Tax Calculated in Indonesia?
Taxable income is determined by adjusting accounting profits for differences between financial accounting and Indonesian tax rules, including non-deductible expenses, depreciation differences, and income subject to final taxation.
The basic calculation is:
Taxable income = Taxable revenue − Allowable deductions − Available tax losses
Corporate income tax before credits = Taxable income × Applicable tax rate
The final amount payable is determined after deducting eligible tax credits and installments already paid.
Calculating Corporate Income Tax Before Credits
Consider a foreign-owned Indonesian company with the following annual figures:
| Item | Amount |
|---|---|
| Annual revenue | IDR 60 billion (USD 3.75 million) |
| Deductible expenses | IDR 45 billion (USD 2.81 million) |
| Taxable income | IDR 15 billion (USD 937,500) |
| Corporate income tax rate | 22% |
| Corporate income tax before credits | IDR 3.3 billion (USD 206,250) |
The calculation assumes no additional fiscal adjustments, available tax losses or applicable incentives.
Deductible and Non-Deductible Business Expenses
Deductible expenses generally include employee salaries, business-related operating expenses, qualifying marketing expenditure, depreciation and amortization.
Non-deductible expenses include corporate income tax itself, administrative tax penalties, private expenditure and payments that do not satisfy applicable tax requirements.
Tax Loss Carryforwards in Indonesia
Companies may generally carry eligible tax losses forward for up to five consecutive tax years to offset future taxable profits. Tax losses cannot generally be carried back.
Certain qualifying investments may receive an extended carryforward period under applicable tax incentive schemes.
Corporate Income Tax Payments and Annual Filing
Monthly Corporate Income Tax Installments
Companies generally pay corporate income tax through monthly Article 25 installments calculated using their previous year’s annual tax return, subject to applicable adjustments.
Ensure your Indonesian company meets its tax obligations. Contact info@mapresourcesindonesia.com
These installments are credited against the annual corporate income tax liability. Any outstanding balance must generally be settled before submitting the annual return.
Annual Corporate Income Tax Returns
Companies must generally submit their annual corporate income tax returns within four months after the end of their financial year. For companies using a calendar financial year, the standard deadline is April 30.
A filing extension of up to two months may be available, subject to notification and documentation requirements. Estimated outstanding tax must still be settled by the applicable payment deadline.
Annual corporate income tax returns for the 2025 tax year onward are submitted through Coretax DJP.
The reconciliation and submission requirements are addressed in our article on filing corporate tax returns in Indonesia.
Corporate Tax Records and Audit Requirements
Companies must generally retain accounting records and supporting tax documents for 10 years.
Discrepancies between financial statements and tax returns may be examined during a corporate tax audit.
Foreign-owned companies with related-party transactions may also be required to prepare transfer pricing documentation, depending on the applicable thresholds.
Corporate Tax Incentives for Foreign Investors
Foreign-owned companies undertaking qualifying investments may receive tax allowances, tax holidays or incentives associated with Indonesia’s special economic zones.
Contact MAP Resources Indonesia for Corporate Tax Assistance
MAP Resources Indonesia assists foreign-owned companies with corporate income tax calculations, annual tax returns and tax compliance. Contact us at info@mapresourcesindonesia.com.
