Running a business in Indonesia is a lot like running a small, busy shop. Customers come and go, sales are made, and everything seems smooth — until it’s time to handle taxes. For many business owners, this part of the process feels like dealing with a set of invisible “officials” who regularly knock on the door asking for payments, forms, and reports.
At first, it might seem overwhelming. But once you get to know who these “officials” are, it all starts to make sense. Let’s walk through it step by step.
The Monthly Tax “Check-ins”
Every month, a few “officials” come by to check in. They aren’t there to make life hard — they’re just doing their job to keep everything in order. Here’s who to expect each month:
- The Salary Inspector (PPh Pasal 21)
If you have employees, this official will show up on the 10th of every month. They want to make sure you’re deducting a portion of each employee’s salary to pay their income tax. For example, if an employee earns IDR 10 million, a small part of that amount goes to taxes before it ever reaches their pocket. Your job as a business owner is to report and pay that amount on time. - The Consultant Collector (PPh Pasal 23)
When you pay for services like hiring a consultant, contractor, or expert, this official expects 2% of that payment to be set aside as tax. If you pay a consultant IDR 5 million, you hold back IDR 100,000 (2%) and pay it to the tax office by the 10th of the following month. - The International Visitor (PPh Pasal 26)
If you hire someone from another country, this official steps in to make sure taxes are still paid. Usually, 20% of the payment to the foreign consultant must be handed over to the tax office. If a tax treaty between Indonesia and the foreign consultant’s country exists, the rate might be lower. - The Storefront Watcher (VAT/PPN)
This official is responsible for keeping track of sales tax. If your shop’s revenue goes over IDR 4.8 billion a year, you need to start collecting Value Added Tax (VAT/PPN) on your products or services. This tax is 11% of every sale. By the 15th of every month, you need to report how much VAT you collected and pay it to the tax office. - The Installment Reminder (PPh Pasal 25)
Think of this official like a friendly bank reminder. Every month, they ask you to make a small installment toward your year-end corporate income tax. Instead of paying everything at once at the end of the year, you make smaller payments every month. This way, the year-end total isn’t such a shock.
The Once-a-Year Visits
In addition to monthly check-ins, some officials only come once a year. Their visit requires more preparation, but you can see them coming from a mile away.
- The Final Income Tax Officer (PPh Pasal 29)
By March 31st, this official shows up to review all your payments for the previous year. They want to see if your monthly installments (PPh Pasal 25) were enough to cover your total corporate tax. If you underpaid, you settle the difference. For example, if you owe IDR 10 million in taxes but only prepaid IDR 8 million during the year, you’ll need to pay the remaining IDR 2 million. - The Property Officer (Land and Building Tax – PBB)
If your business owns land, an office, or a warehouse, this officer will send a notice once a year asking for payment. The due date depends on your local government, but you’ll be notified ahead of time. It’s like paying property tax for a house, but for your business property instead.
The Rulebook They Follow (PP 55/2022)
All these “officials” follow the same rulebook — PP 55/2022. This regulation makes sure everyone follows the same rules and deadlines. It also introduces tools like e-Billing and e-Filing, which allow you to submit and pay your taxes online. No more trips to the tax office!
The rulebook emphasizes:
- Efficiency: Use digital tools like e-Billing to avoid delays.
- Accuracy: Make sure you’re classifying your payments correctly (employee salary vs. consultant fees, for example).
- Compliance: If you miss a deadline, you’ll get fined. If you misclassify something, you’ll have to pay extra.
How to Stay on Track
Handling taxes isn’t as hard as it sounds — as long as you stay organized. Here’s how you can make life easier for yourself:
- Mark Important Dates
The 10th, 15th, and March 31st are the most important dates in your calendar. These are deadlines for PPh 21, PPh 23, VAT, and annual tax filings. Set reminders so you never miss them. - Use Online Tools
Thanks to PP 55/2022, e-Billing and e-Filing make tax payments easier. Instead of waiting in line, you can submit payments online from your office or home. - Track Your Finances Digitally
Use simple accounting software or bookkeeping apps to track employee salaries, consultant payments, and VAT. With clear records, you’ll know exactly how much tax to pay every month. - Ask for Professional Help
If this all sounds too complicated, you don’t have to do it alone. Tax consultants exist for a reason. They can handle everything — from calculating payments to filing forms — so you can focus on growing your business.
Why All of This Matters
Some business owners think, “If I just stay quiet, maybe no one will notice.” But ignoring taxes isn’t a good idea. Here’s why:
- Avoid Penalties and Fines
If you miss a deadline, even by one day, you’ll get fined. And if you misclassify payments, the tax office might charge you extra. It’s better (and cheaper) to stay on top of things. - Build a Clean Business Reputation
If you ever want to work with big clients, apply for loans, or bring on investors, they’ll want to see your tax records. A clean, organized tax history builds trust. - It’s Simpler Than It Seems
At first, taxes may seem like a maze of rules, dates, and payments. But once you know which “officials” to expect and when to expect them, it becomes part of your monthly routine.
Taxes may not be the most exciting part of running a business, but they’re one of the most important. Instead of seeing it as a burden, think of it like paying for a clean and well-maintained store. With good organization and the right support, you can handle it like a pro.
If you’re feeling unsure or overwhelmed, consider getting help from a tax consultant. They can break everything down into simple steps and ensure you never miss a deadline. After all, running a business should be about growth and success — not stress and confusion.
With the right tools, knowledge, and support, you’ll be able to run your business smoothly and confidently. The “officials” may check in every month, but as long as you’re prepared, it’s just another part of the daily routine.