In a previous article, Ideatax discussed resident taxpayers. This article now comprehensively focuses on non-resident taxpayers, covering their definition, applicable criteria, and practical examples based on the latest tax regulations.
A good grasp of taxpayer status is essential, as it directly determines the scope of taxable income and the extent of tax obligations in Indonesia.
Definition of Non-Resident Taxpayers
Non-resident taxpayers are individuals or entities that either conduct business or carry out activities in Indonesia through a permanent establishment, or derive income from Indonesia without conducting business or activities through a permanent establishment.
Criteria for Non-Resident Taxpayers
The status of a non-resident taxpayer is determined based on the following four criteria:
- Individuals who do not reside in Indonesia.
- Foreign nationals who stay in Indonesia for less than 183 days within 12 months.
- Indonesian citizens who remain outside Indonesia for over 183 days within 12 months and meet the following conditions:
- permanently reside at a location outside Indonesia that is not merely a transit point;
- maintain a principal center of activities outside Indonesia, reflecting personal, economic, and/or social ties, as evidenced by:
- a spouse, children, and/or immediate family members residing overseas;
- income sourced primarily from outside Indonesia; or
- membership in religious, educational, social, or community organizations recognized by the local government abroad.
- have a habitual place for carrying out daily activities outside Indonesia; or
- are treated as a resident taxpayer of another country or jurisdiction.
- Entities that are neither established nor domiciled in Indonesia.
Reinforcement Under PER-23/PJ/2025
To provide legal certainty, particularly for Indonesian citizens residing abroad, the Director General of Taxes Regulation Number PER-23/PJ/2025 clarifies that the determination of non-resident taxpayer status is carried out in stages, based on a hierarchical and sequential assessment of criteria.
The primary requirement is permanent residence outside Indonesia. Accordingly, the existence of foreign-sourced income or family members overseas alone is insufficient to establish non-resident status if this primary requirement is not met.
Case Study: Determining Non-Resident Taxpayer Status
Doni is an Indonesian citizen who has worked in Country X since January 1, 2021, and rents an apartment with his wife. He returns to Indonesia every three months for about 1 week to visit family and oversee his car rental business.
Doni maintains ties to both Indonesia and Country X, as evidenced by family presence and sources of income in both jurisdictions. This indicates that his centers of activity may exist in both countries.
However, based on his habitual daily activities, Doni spends 337 days per year in Country X and only 28 days in Indonesia. When the criteria under PER-23/PJ/2025 are applied sequentially, Doni qualifies as a non-resident taxpayer.
Proof of Non-Resident Taxpayer Status in Another Country
An Indonesian citizen may lose resident taxpayer status if they are formally recognized as a resident taxpayer in another country, subject to the Director General of Taxes' determination.
Such status must be supported by a Certificate of Residence or an equivalent document issued by the foreign tax authority, which must:
- be issued in English;
- state the taxpayer’s name;
- specify the date of issuance and validity period; and
- be signed by an authorized official.
Legal References
- Law of the Republic of Indonesia Number 7 of 1983 concerning Income Tax, as amended by Law of the Republic of Indonesia Number 6 of 2023.
- Minister of Finance Regulation Number 18/PMK.03/2021.
- Director General of Taxes Regulation Number PER-23/PJ/2025.
Below are some of the most frequently asked questions on non-resident taxpayers.
Are Indonesian citizens working abroad automatically classified as non-resident taxpayers?
No. Indonesian citizens must meet the requirements in sequence, with permanent residence outside Indonesia as the main criterion.
Are non-resident taxpayers subject to tax on all of their income?
No. Non-resident taxpayers are only taxed on income sourced from Indonesia.
Are non-resident taxpayers required to register for a tax identification number (NPWP) in Indonesia?
In principle, registration is not mandatory unless specific tax obligations arise in Indonesia.
Also Read: https://ideatax.id/articles/resident-taxpayers-definition-criteria-and-latest-regulations
