As of 2026, a PT PMA in Indonesia pays a flat 22% corporate income tax on net profit, set by the 2021 Harmonized Tax Law. Companies with annual turnover under IDR 4.8 billion may instead elect a 0.5% final tax on gross revenue. Incentives exist, but only for qualifying sectors and investment sizes.
Foreign founders often assume “offshore” means low tax. A PT PMA — the standard foreign-owned company in Indonesia, overseen by BKPM under the Ministry of Investment — is a fully onshore, fully taxable Indonesian resident entity. What actually moves your effective rate is which regime you fall under, your turnover band, and whether your sector qualifies for a government incentive. Here is the honest breakdown, with every figure dated and attributed.
What is the standard corporate tax rate for a PT PMA?
The headline number is 22%. Indonesia’s Directorate General of Taxes (DJP) applies a flat 22% corporate income tax to net taxable profit, a rate locked in by Law No. 7 of 2021 — the Harmonized Tax Law (UU HPP). That law scrapped an earlier plan to cut the rate to 20%, so 22% is the figure to plan around as of 2026, subject to change.
A PT PMA is taxed as an Indonesian tax resident once it holds a corporate NPWP. There is no separate, lower “foreign company” rate — a PMA and a locally owned PT sit under the same schedule.
| Regime (as of 2026) | Rate | Applies to |
|---|---|---|
| Standard corporate income tax | 22% of net profit | Any PT PMA above the small-business thresholds |
| 0.5% final turnover tax | 0.5% of gross monthly revenue | Turnover under IDR 4.8 billion/year, time-limited |
| Article 31E discount | 11% on part of profit | Gross turnover up to IDR 50 billion/year |
| Public-company reduction | 19% | Listed firms meeting free-float conditions |
All figures subject to change; confirm current rates with the DJP or a registered tax consultant before relying on them.
Who qualifies for the 0.5% final turnover tax?
Indonesia runs a simplified regime for small businesses: a 0.5% final tax charged on gross monthly turnover rather than on profit. It traces to Government Regulation 23 of 2018, later carried into Government Regulation 55 of 2022. A company qualifies while its annual gross turnover stays under IDR 4.8 billion (roughly USD 290,000–320,000 depending on FX, as of 2026).
The catch for foreign investors: for a limited-liability company (PT), including a PT PMA, this regime is available for only three tax years. After that window — or once turnover crosses IDR 4.8 billion — the company reverts to the standard 22% profit-based system. The interplay between these two regimes is where a Bali corporate tax advisory earns its keep, because 0.5% of revenue can be far heavier than 22% of profit for a low-margin business, and much lighter for a high-margin one.
Is there a discount for small and mid-sized PT PMAs?
Yes, and it is separate from the 0.5% regime. Under Article 31E of the Income Tax Law, companies with gross annual turnover up to IDR 50 billion receive a 50% cut on the 22% rate — an effective 11% — applied to the slice of taxable income attributable to the first IDR 4.8 billion of turnover. Profit above that proportion is taxed at the full 22%.
That makes three distinct tiers a PMA can encounter:
- Turnover under IDR 4.8 billion: eligible for the 0.5% final turnover tax (three-year cap for PTs), or the standard system with the Article 31E discount.
- Turnover IDR 4.8–50 billion: standard 22%, with the partial 11% Article 31E discount on the qualifying portion.
- Turnover above IDR 50 billion: flat 22% with no small-business relief.
What sector incentives can a foreign company claim?
Beyond the rate tables, the Ministry of Investment (BKPM) and Ministry of Finance offer targeted incentives — but these reward specific sectors and investment sizes, not ordinary Bali service or villa businesses. As of 2026, the main instruments are:
| Incentive | Typical benefit | Broad eligibility |
|---|---|---|
| Tax holiday | 50–100% CIT cut for 5–20 years | “Pioneer” industries, large capital investment |
| Tax allowance | Net-income reduction of 30% of investment over 6 years | Listed priority sectors and regions |
| Super deduction | Up to 300% deduction for R&D; up to 200% for vocational training | Qualifying R&D and skills programs |
| Special Economic Zone (KEK) facilities | Additional CIT and customs relief | Businesses operating inside a designated KEK |
These are administered through the OSS-RBA platform and require the right KBLI business codes plus documented investment. A hospitality or trading PMA in Bali will rarely meet the “pioneer industry” bar for a tax holiday — a point where honest advisory matters more than optimistic sales copy.
How are profits repatriated, and what is withheld?
A PT PMA can repatriate profit as dividends after paying its 22% corporate tax. Dividends paid to a foreign (non-resident) shareholder are generally subject to 20% withholding tax, which a relevant double-tax treaty can reduce — treaties covering Singapore, Australia and several EU states often lower the rate, subject to beneficial-ownership and documentation tests. Dividends paid to Indonesian-resident recipients can be exempt where the profit is reinvested domestically under conditions set by the Harmonized Tax Law.
What tax obligations follow a foreign director?
Tax exposure is not only corporate. A foreign director residing in Indonesia — required to hold a KITAS — is drawn into personal NPWP obligations and taxed as an Indonesian resident, as Indonesia-Investments notes for PMA governance. Indonesia also participates in the OECD Common Reporting Standard (CRS), automatically exchanging financial-account information with jurisdictions including Australia, Singapore, the United States and the EU. Structuring a Bali company to hide income from a home-country tax authority is, in practical terms, not viable.
What should you verify before relying on any rate?
Every figure here is dated “as of 2026” and subject to legislative and regulatory change. This is information, not tax advice. Rates, thresholds and incentive rules shift with each finance law, and eligibility for the 0.5% regime, Article 31E relief, or a tax holiday turns on facts specific to your turnover, sector and KBLI codes. Before you model a number into a business plan, confirm it with the Directorate General of Taxes directly, or engage a licensed Indonesian tax consultant and registered counsel. The right structure is the one that survives an audit, not the one with the lowest headline rate.