Indonesia Tax Residency Guide

the Indonesia tax residency for 2026. The guide covers: the 183+ day rule and the intention to reside as the residency criteria; the permanent home test for the dual residency situations; no citizenship-based taxation — Indonesia taxes the residents based on the physical presence and the economic connection, not the citizenship; the ordinary resident concept for the long-term expatriates; the tax residence certificate (SKD — Surat Keterangan Domisili); and the withholding rates for the non-residents at 20% on most income types.

183+ Day Rule and Intention to Reside

Primary test — 183+ days: The individual is the tax resident (the "subjek pajak dalam negeri" — the "domestic tax subject") if present in Indonesia for 183 days or more within any 12-month period. The presence is counted based on the physical days in Indonesia.
Supplementary test — intention to reside: The individual may also be considered the tax resident if present in Indonesia for less than 183 days but the intention (the "niat" — the "intention") to reside in Indonesia exists. The intention is determined by the facts and circumstances — the permanent home, the family presence, the economic activities, and the employment contract duration.
Beginning and end of residency: The tax residency begins on the date of arrival in Indonesia and ends on the date of departure from Indonesia when the individual ceases to be the resident.

Permanent Home Test

Permanent home — the "tempat tinggal tetap": The individual who has the permanent home (the "tempat tinggal tetap" — the "permanent residence") in Indonesia is considered the tax resident regardless of the number of days spent in Indonesia. The permanent home includes the owned property or the long-term lease.
Tiebreaker: In the dual residency situations, the DTA tiebreaker rules apply: (a) the permanent home available, (b) the centre of vital interests, (c) the habitual abode, (d) the nationality, (e) the mutual agreement procedure (MAP).

No Citizenship-Based Taxation

Residence-based, not citizenship-based: Indonesia does NOT impose the citizenship-based taxation (unlike the United States). The Indonesian citizens living abroad are taxed as the non-residents if they do not meet the 183-day test and do not maintain the permanent home in Indonesia.
Indonesian citizens abroad: The Indonesian citizens working abroad are generally the non-residents for the Indonesia tax purposes and are taxed only on the Indonesia-source income. However, the special rules may apply to the Indonesian citizens working for the Indonesia government abroad.

Ordinary Resident Concept

Long-term expatriates: The foreign nationals who reside in Indonesia for the extended period (typically 2+ years) are considered the "ordinary residents" (the "penduduk biasa" — the "ordinary residents") and are subject to the same tax rules as the Indonesian citizens — the worldwide income taxation at the progressive rates.
Tax planning: The expatriates on the short-term assignments (less than 183 days) may qualify as the non-residents and be taxed only on the Indonesia-source income. The individuals on the long-term assignments (183+ days or with the permanent home) are the residents and are taxed on the worldwide income.

Tax Residence Certificate — SKD (Surat Keterangan Domisili)

SKD — Certificate of Domicile: The tax residence certificate is called the "Surat Keterangan Domisili" (SKD) or the "Surat Keterangan Wajib Pajak Dalam Negeri" (the "Certificate of Domestic Taxpayer Status"). The SKD is issued by the DJP (the Direktorat Jenderal Pajak — the Directorate General of Taxes) to the Indonesia tax residents for the treaty relief purposes.
Application: The taxpayer must apply for the SKD through the online system (the "DJP Online" portal). The application requires: (a) the NPWP (the taxpayer identification number), (b) the confirmation of the tax residency status, (c) the supporting documents (the passport, the residence permit, the employment contract).
Validity: The SKD is typically valid for the calendar year in which it is issued. The renewal is required annually.

Withholding Rates for Non-Residents — PPh 26 (20%)

Standard rate — 20%: The non-residents (the "subjek pajak luar negeri") are subject to the withholding tax under the PPh Pasal 26 at the rate of 20% on the gross amount of the Indonesia-source income. The 20% rate applies unless the lower rate is available under the applicable DTA.
Income types subject to PPh 26: (a) the dividends at 20% (reduced to 10-15% under the DTAs), (b) the interest at 20% (reduced under the DTAs), (c) the royalties at 20% (reduced under the DTAs), (d) the rent and services fees at 20%, (e) the capital gains on the sale of the Indonesian shares at 20% (or the deemed 25% of the sale proceeds at 20%), (f) the branch profits tax at 20% (for the permanent establishments remitting the profits).
DTA relief: The non-residents may claim the reduced DTA rates by submitting the form DGT-1 (or DGT-2 for the individuals) and providing the Certificate of Residence from the home country.