Indonesia corporate income tax 2026: rates, reliefs and deadlines

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You run, or plan to open, an Indonesian company: a PT PMA as a foreign founder, a local PT, or a small cooperative. This guide covers the 2026 rate, the small-company relief and how profit leaves the company. It also explains the April 2026 overhaul of the 0.5% turnover tax and the calendar.

Indonesia corporate income tax in 2026: the key figures

What changed for 2026

• The 0.5% turnover tax narrowed. PP 20/2026, in force since 22 April 2026, limits the regime to individuals, single-person PTs (perseroan perorangan) and cooperatives. Ordinary PTs, CVs and firms keep it only until their existing period ends.
• Bribes are now explicitly non-deductible. The same regulation adds Article 20A to PP 55/2022. Payments to public officials, foreign ones included, are not business costs.
• Pillar Two's undertaxed profits rule (UTPR) applies from 1 January 2026. The income inclusion rule and domestic top-up tax started in 2025 under PMK 136/2024.
• Treaty claims follow a new procedure. PMK 112/2025 governs how foreign shareholders and lenders obtain treaty rates from 2026.

Is this guide for you?

Read on if you…

• are setting up a PT PMA (foreign-owned company) or a local PT and need the 2026 numbers;
• already run an Indonesian company and want to check reliefs, dividends and deadlines;
• are a freelancer comparing a company with personal tax at up to 35%.

Probably not your case if you…

• only earn personal income in Indonesia (see personal income taxes in Indonesia);
• work in oil and gas or mining under a contract with its own tax terms.

Who pays Indonesian corporate income tax?

A company established or domiciled in Indonesia is a domestic corporate taxpayer (Wajib Pajak badan dalam negeri). That covers every PT, PT PMA, CV, firm and cooperative. It pays tax on worldwide income, with a foreign tax credit.

Setting up a PT PMA? Since Minister of Investment Regulation 5/2025, it needs at least IDR 2.5 billion of paid-up capital (art. 26(10)). The investment plan must still exceed IDR 10 billion per business line and location, excluding land and buildings (art. 26(2)).

A foreign company pays Indonesian corporate tax only through a permanent establishment (bentuk usaha tetap, BUT). That is a taxable presence such as an office, a project or a dependent agent. Under the Hong Kong treaty, for instance, services create a PE after more than 183 days within any twelve months.

Here's the catch for remote founders. Run a foreign company from Bali and sign contracts there, and the DJP (Direktorat Jenderal Pajak, the tax authority) can treat it as having a PE. Its profit then pays 22%, and after-tax profit 20% branch profit tax unless reinvested or cut by treaty. Check the PE article in tax treaties of Indonesia before you move.

How is the corporate tax calculated?

Start from accounting profit, then adjust for tax. The deductibility rules and the list of disallowed costs are in business expenses in Indonesia. The adjustments that move the bill most:

• Depreciation by asset group: 4, 8, 16 or 20 years, straight-line or declining balance; permanent buildings 5% a year.
• Final-taxed income is removed, with its costs. Examples: land and building rent (10%), deposit interest (20%), listed share sales (0.1% of proceeds).
• Dividends from Indonesian companies received by a domestic company are not taxable.
• Non-deductible items include tax penalties and interest, costs tied to final-taxed income, and non-arm's-length payments to related parties.
• Losses offset profits of the next five consecutive years.

The 50% small-company relief

If your turnover is IDR 50 billion or less, Article 31E gives you a 50% cut in the 22% rate. It applies to the share of taxable income that comes from the first IDR 4.8 billion of turnover, pro rata. The DJP sets out the method on its entity tax calculation page.

Relieved profit = taxable income × (4.8 billion ÷ turnover). That slice pays 11%; the rest pays 22%. Above IDR 50 billion of turnover the relief disappears.

The 0.5% turnover tax after PP 20/2026

Until April 2026, a new PT could pay 0.5% of gross turnover for a few years. PP 20/2026 rewrote Article 57 of PP 55/2022. The regime now covers only:

1. resident individuals with turnover up to IDR 4.8 billion, with no time limit, but not on income from independent professional services (art. 56(3)–(4));
2. single-person PTs with turnover up to IDR 4.8 billion, unless set up by a professional selling the same freelance services (those keep 0.5% only until the end of tax year 2026);
3. cooperatives, for four tax years from registration.

Permanent establishments and companies with certain other incentives are excluded. Ordinary PTs, CVs and firms already on the regime keep it until their existing time limit runs out, then move to 22% with the 50% relief.

How does profit get out of the company?

The dividend reinvestment rule sits in articles 9 and 11 of PP 55/2022: the money must stay invested for at least three tax years. The Article 26 page of the DJP lists the four conditions for the branch profit waiver. The PE must invest in a new Indonesian company as founder, in the same or next tax year, and hold it.

For a foreign parent, treaty rates drive the choice: Singapore caps dividends at 10% or 15%, Hong Kong at 5% or 10%. Both need a valid DGT form before payment.

Which incentives exist in 2026?

• Tax holiday for pioneer industries: 100% exemption for 5 to 20 years on plans from IDR 500 billion, then 50% for two years. Plans of IDR 100 billion to under IDR 500 billion get 50% for five years. The application window closed on 31 December 2025; check the Ministry of Finance legal database for any extension before you plan on it.
• Tax allowance: a 30% reduction of net taxable income for investment in fixed assets, spread at 5% a year over six years. It adds accelerated depreciation, 10% dividend withholding to non-residents (or a lower treaty rate) and losses carried up to ten years.
• Super deductions for research and development, internships and vocational training.

Groups caught by Pillar Two can lose part of a holiday through the domestic top-up tax.

What does compliance look like through the year?

1. Article 25 instalments, based on last year's return, paid by the 15th of the following month.
2. Monthly withholding returns for salaries (Art. 21), services (Art. 23), final taxes (Art. 4(2)) and payments abroad (Art. 26). File them by the 20th of the following month.
3. VAT returns, monthly, by the end of the following month once you are a VAT-registered business. Rates and thresholds are in specific taxes in Indonesia.
4. Annual return (Form 1771) within four months of year end: 30 April for a calendar year, per the DJP filing calendar. Pay the balance before filing.
5. Keep records for 10 years in Indonesia, as the DJP's entity guidance requires.

Filing and payment run through Coretax, the DJP's core administration system, since 1 January 2025. A late annual corporate return costs IDR 1,000,000. Late payment carries monthly interest set by Ministry of Finance decree: 1.01% a month for October 2026 under KMK 47/MK/EF.2/2026. It runs from the due date until you pay; the 24-month cap applies only to amended returns and assessments. The DJP can assess underpaid tax for five years. The penalty ladder is in legal framework for tax fraud in Indonesia.

Common mistakes (and what they cost)

• Running a foreign company from Indonesia. The DJP can assess a PE: 22% on the profit, then 20% branch profit tax, with interest for up to 24 months.
• Forgetting the 50% relief. A company with IDR 12 billion turnover and IDR 3 billion profit overpays IDR 132 million at a flat 22%.
• Staying on 0.5% after your period ends. After PP 20/2026, ordinary PTs and CVs cannot roll over. The DJP reassesses at 22% plus late-payment interest.
• Paying foreign providers without the DGT form on file. You owe the 20% Article 26 tax yourself, plus interest, whatever the treaty says.
• Missing the three-year reinvestment test. A founder who withdraws reinvested dividends early loses the exemption, and the 10% final tax falls due.

Frequently asked questions

What is the corporate tax rate in Indonesia in 2026?

The standard rate is 22% of net taxable income. Listed companies with at least 40% of paid-up shares traded on the exchange, meeting other conditions, pay 19%. Companies with turnover up to IDR 50 billion halve the rate on profit linked to the first IDR 4.8 billion of turnover.

Can a PT still pay the 0.5% final tax in 2026?

Only in limited cases. Since 22 April 2026, PP 20/2026 limits it to individuals, single-person PTs and cooperatives with turnover up to IDR 4.8 billion. An ordinary PT, CV or firm already on it keeps it until its time limit ends. Then it moves to 22% with the 50% relief.

How are dividends from an Indonesian company taxed?

Dividends to a domestic company are not taxable. Dividends to a resident individual bear 10% final tax, unless reinvested in Indonesia for at least three tax years. Dividends to non-residents bear 20% under Article 26. A valid DGT form, given in time, cuts this to the treaty rate.

When is the corporate tax return due in Indonesia?

Within four months of the end of the tax year, so 30 April for a calendar-year company. Any balance must be paid before filing. Monthly Article 25 instalments are due by the 15th of the following month. A late annual corporate return carries an administrative penalty of IDR 1,000,000, plus interest on late tax.

Does Indonesia apply the 15% global minimum tax?

Yes. PMK 136/2024, in force from 1 January 2025, introduced the OECD Pillar Two rules. The income inclusion rule and the domestic minimum top-up tax apply from 2025, and the undertaxed profits rule from 1 January 2026. Standalone small companies and most PT PMAs of founders are outside its scope.

How long can a company carry forward tax losses?

Five consecutive years, starting the year after the loss. Indonesia allows no carry-back and no group relief between companies. The tax allowance incentive can extend the period up to ten years for qualifying investments. Plan large early-stage losses carefully, because unused amounts expire.

Related guides

• Business forms and independent professional statuses in Indonesia – PT PMA, PT, single-person PT and freelancer status compared.
• Business expenses in Indonesia – what the DJP lets you deduct, and depreciation.
• Tax treaties of Indonesia – treaty rates on dividends, interest and royalties, and the DGT form.
• Personal income taxes in Indonesia – how your salary and dividends are taxed as a founder.
• Tax landscape overview of Indonesia – every Indonesian tax on one page.
• Corporate income tax in Hong Kong – the two-tier, territorial alternative for a regional holding.
• All country tax guides

Sources

• Income Tax Calculation Mechanism – Entity – Directorate General of Taxes (DJP)
• Due Date for Tax Return Filing – Directorate General of Taxes (DJP)
• Income Tax Article 26 – Directorate General of Taxes (DJP)
• PP 20/2026 amending PP 55/2022 – Ministry of Finance JDIH
• Minister of Investment Regulation 5/2025 on risk-based licensing – Ministry of Investment (BKPM)
• PMK 136/2024 on the global minimum tax – Ministry of Finance JDIH
• Indonesia – Corporate taxes on corporate income – PwC Worldwide Tax Summaries (secondary)
• Indonesia – Corporate tax credits and incentives – PwC Worldwide Tax Summaries (secondary)

This guide is general information, not personalised tax advice. See how we research and review.