**As of 2026, a Bali PT PMA with annual gross turnover below IDR 4.8 billion can pay a flat 0.5% final tax on revenue instead of the standard 22% corporate income tax — but only for three tax years under Government Regulation 23 of 2018. After that window, or once turnover crosses the threshold, normal bookkeeping applies.**
This is an outlook, not a prediction. The rates and thresholds below are current as of 2026 and can change. Treat the numbers as a planning frame, and confirm your own position with a licensed Indonesian tax consultant before you file.
What exactly is the 0.5% final turnover tax?
The 0.5% final income tax — PPh final — comes from Government Regulation No. 23 of 2018 (PP 23/2018). Instead of calculating tax on net profit, an eligible taxpayer pays 0.5% of monthly gross turnover. According to the Directorate General of Taxes (DJP), it is a simplification scheme for micro, small and medium taxpayers whose annual gross turnover stays under IDR 4.8 billion.
Two details trip up foreign founders:
- It is charged on gross revenue, not profit. You pay in a loss year too.
- For a PT — which includes every PT PMA — there is no IDR 500 million exemption. That exemption, added by Law 7 of 2021 (the UU HPP), applies to individual taxpayers only. A company pays 0.5% from the first rupiah of turnover.
In practice, most PT PMAs treat the 0.5% rate as breathing room while revenue climbs toward the IDR 10 billion investment plan they committed to at registration with BKPM, the Ministry of Investment.
How long can a PT PMA actually use the 0.5% rate?
Not indefinitely. Article 5 of PP 23/2018 caps the runway, and the cap depends on the type of taxpayer.
| Taxpayer type | Maximum years on the 0.5% final regime |
|---|---|
| Individual (orang pribadi) | 7 tax years |
| CV, firma, cooperative, BUMDes | 4 tax years |
| PT — including a PT PMA | 3 tax years |
For a PT PMA, that means three tax years, counted from the year the company is registered. A PT PMA registered in 2024 rides the 0.5% rate through tax year 2026; from tax year 2027 it must file under normal bookkeeping. A company registered in 2025 hits the same edge in 2028. The 0.5% rate is a start-up runway, not a permanent regime.
When does graduating to normal corporate tax cost less?
Sometimes leaving the 0.5% scheme early is the cheaper move. Because the rate lands on gross revenue, a thin-margin or loss-making PT PMA can owe more under 0.5% than it would pay on its actual profit under normal corporate income tax.
Here is the pivot. Half a percent of revenue equals 22% of profit when the net margin is about 2.3%. But a small PT PMA under IDR 4.8 billion also qualifies for the Article 31E facility — a 50% cut to the 22% rate on the turnover band up to IDR 4.8 billion, an effective 11%. Measured against that 11%, the break-even margin is closer to 4.5%.
As a rough compass — and you can model both routes against your own figures in our Bali setup cost calculator before deciding — if your net margin sits below roughly 4.5%, or you are running at a loss, normal bookkeeping usually wins. Comfortably above it, the flat 0.5% wins.
There is one more asymmetry. Under normal bookkeeping, tax losses can be carried forward up to five years (Article 6 of the Income Tax Law). Under the 0.5% regime you get none of that relief — the tax is due whether you profit or bleed.
What do the two paths look like in numbers?
The table below models a PT PMA sitting right at the IDR 4.8 billion turnover ceiling, comparing the flat 0.5% against normal corporate tax at the 11% effective rate on that band. Figures are illustrative, as of 2026, and subject to change.
| Net profit margin | Taxable profit | Path A — 0.5% of turnover | Path B — normal tax (11% effective) | Cheaper path |
|---|---|---|---|---|
| Loss year | IDR 0 | IDR 24,000,000 | IDR 0 (loss carried forward up to 5 yrs) | Normal bookkeeping |
| 2% | IDR 96,000,000 | IDR 24,000,000 | IDR 10,560,000 | Normal bookkeeping |
| 4.5% | IDR 216,000,000 | IDR 24,000,000 | IDR 23,760,000 | Roughly break-even |
| 10% | IDR 480,000,000 | IDR 24,000,000 | IDR 52,800,000 | 0.5% turnover tax |
| 20% | IDR 960,000,000 | IDR 24,000,000 | IDR 105,600,000 | 0.5% turnover tax |
Read the pattern, not the exact rupiah: the flat 0.5% is a fixed IDR 24 million no matter what, while the profit-based path rises with your margin. Healthy operators overpay by clinging to turnover tax; struggling ones overpay by leaving it.
What 2026 signals point to 2027?
A handful of dated developments matter for founders whose window is closing:
- The Core Tax Administration System (Coretax) went live on 1 January 2025. Through 2026 it has been bedding in, tightening the automated match between reported turnover, e-invoices and bank flows. A PT PMA parked just under IDR 4.8 billion while carrying a IDR 10 billion investment commitment is simply more visible than it used to be.
- The three-year cliff is real for the 2024-2025 cohort of new PT PMAs. Many companies formed during Bali’s post-pandemic investment wave will file their first full normal-bookkeeping year in 2027 or 2028, at the 22% rate.
- Crossing IDR 4.8 billion is a double trigger. It ends the 0.5% option and, separately, forces PKP registration for VAT — currently 11% on most goods and services as of 2026. Graduation is not only an income-tax event; it changes how you invoice.
None of this is a forecast of new law. It is the current framework plus the enforcement direction you can already see in how DJP now cross-checks filings. Watch the signals; do not bet on them.
What should a founder do before the window closes?
- Know your registration year and count the three tax years precisely — the clock is not calendar-flexible, and it does not pause for a slow first year.
- Model margin, not just revenue. The right regime turns on profitability, not headline sales.
- Reconcile your turnover story with your IDR 10 billion investment plan, so the two narratives do not contradict each other on file.
- Take the decision to a registered Indonesian tax consultant or licensed counsel before you elect a method — some elections, once notified to DJP, cannot be reversed.
This article is information, not tax or legal advice, and carries no guarantee of any outcome. Indonesian tax rules change; verify every figure against current DJP regulations with a qualified professional before acting.