Tax and compliance for businesses in Indonesia, an overview

Snapshot

A business in Indonesia is identified by its NPWP, the taxpayer number, and by its NIB, the business identification number issued through the Online Single Submission system. It pays corporate income tax on profit, and once turnover passes 4.8 billion Indonesian rupiah it registers for the PPN value added tax as a taxable entrepreneur, a PKP. Your company bank account sits underneath all of this as the record of money in and out, so keeping company and personal money separate makes filing easier.

Taxpayer identifier: NPWP, the 16 digit company taxpayer number, generated with the NIB through the OSS system. As of 31 May 2026.
Corporate income tax: PPh Badan at a standard 22 percent of taxable profit, with a 0.5 percent turnover option for smaller companies. As of 31 May 2026.
Value added tax: PPN at a statutory 12 percent, an effective 11 percent on most goods and services, with PKP registration above 4.8 billion rupiah turnover. As of 31 May 2026.
Filing: Electronic, through the Coretax administration system, usually with an accountant

Rates and thresholds as of 31 May 2026Last reviewed 31 May 2026

General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.

An Indonesian business is identified by its NPWP, the taxpayer number, and by its NIB, the business identification number issued through the Online Single Submission system, known as OSS, which also generates the company NPWP. The company pays corporate income tax, the PPh Badan, at a standard rate of 22 percent of profit, while smaller companies with turnover up to 4.8 billion Indonesian rupiah may use a simplified final tax of 0.5 percent of turnover for a limited period. A business that passes 4.8 billion rupiah in annual turnover registers for the PPN value added tax as a taxable entrepreneur, a PKP. Filing now runs through the Coretax administration system. None of this is tax advice, and the rules vary by activity and size, so confirm your own position with an accountant. Figures here are as of 31 May 2026.

How business tax and compliance fit together in Indonesia

When a company is registered in Indonesia it obtains a business identification number, the NIB, through the Online Single Submission system. That same process generates the company NPWP, the taxpayer number that identifies the business for filing and on invoices. Depending on its activity the company may need further licences through OSS, and once it crosses the VAT threshold it confirms taxable entrepreneur status, the PKP. Compliance then runs through periodic filings and tax administered in the Coretax system. As of 31 May 2026.

Corporate income tax

The standard corporate income tax, the PPh Badan, is 22 percent of taxable profit. Listed companies that meet a public ownership condition can qualify for a reduced rate, while smaller companies with annual gross turnover up to 4.8 billion Indonesian rupiah may instead use a simplified final income tax of 0.5 percent of turnover, available for a limited number of years under the small business regime. The right method depends on size, activity and ownership, so confirm your position with an accountant. As of 31 May 2026.

Value added tax, the PPN

The PPN, the Indonesian value added tax, carries a statutory rate of 12 percent that took effect on 1 January 2025. For most goods and services other than luxury items the tax is applied to an adjusted base of eleven twelfths of the price, which produces an effective rate of 11 percent, while luxury goods are taxed at the full 12 percent. A business must register as a taxable entrepreneur, a PKP, once its annual turnover passes 4.8 billion Indonesian rupiah, after which it charges PPN, issues tax invoices and files VAT returns. Confirm the rate and threshold that apply to your activity with an accountant. As of 31 May 2026.

Filing and the Coretax system

Indonesia moved tax administration to the Coretax system, which went live in January 2025 and handles registration, filing and payment for income tax and VAT in one place. Companies file monthly and annual returns electronically, often with an accountant, and use the system to issue and report tax invoices. Confirm the filing calendar and the obligations for your activity with an accountant. As of 31 May 2026.

What to keep in order

These items keep Indonesian business compliance manageable, as of 31 May 2026. Verify with the authority or your accountant

Your NIB and company NPWP from the OSS system, on invoices and records, plus PKP registration once turnover passes 4.8 billion Indonesian rupiah.
A bank account in the company name that keeps company money separate from personal money for clean bookkeeping.
A filing calendar for corporate income tax and, where you are a PKP, for monthly VAT, handled through the Coretax system with an accountant.

How to approach compliance

Confirm your NIB and company NPWP from the OSS system, and whether your activity needs further licences.
Choose your income tax method with an accountant, the standard 22 percent on profit or, if eligible, the 0.5 percent turnover regime, and register as a PKP once you pass the VAT threshold.
Set up a company bank account and bookkeeping that separate company money, capture every transaction, and meet the Coretax filing calendar.

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Questions about tax and compliance in Indonesia

What is an NPWP in Indonesia?

The NPWP, Nomor Pokok Wajib Pajak, is the taxpayer identification number that identifies a registered taxpayer in Indonesia. A company holds a 16 digit NPWP, which in practice is generated together with the business identification number when a company registers through the Online Single Submission system. It is used for filing and for invoicing. As of 31 May 2026. Verify with the authority or your accountant.

What is the NIB and the OSS system?

The NIB, Nomor Induk Berusaha, is the business identification number that registers a company and serves as its primary business licence. It is issued through the Online Single Submission system, known as OSS, which also generates the company NPWP. The NIB is required for most business activities and for opening a company bank account. Confirm the steps that apply to your activity with a local adviser. As of 31 May 2026.

What is the corporate income tax rate in Indonesia?

The standard corporate income tax rate, the PPh Badan, is 22 percent of taxable profit. Listed companies that meet a public float condition can qualify for a lower rate, and smaller companies with annual turnover up to 4.8 billion Indonesian rupiah may use a simplified final income tax of 0.5 percent of turnover for a limited period. Confirm the rate and method that apply to your business with an accountant. As of 31 May 2026.

What is the PPN value added tax rate in Indonesia?

The PPN, the Indonesian value added tax, has a statutory rate of 12 percent. For most goods and services other than luxury items the tax is applied to an adjusted base of eleven twelfths of the price, which produces an effective rate of 11 percent. A business must register for VAT as a taxable entrepreneur, a PKP, once its annual turnover passes 4.8 billion Indonesian rupiah. Confirm the rate and registration threshold for your activity with an accountant. As of 31 May 2026.

Fees, features, and eligibility change and vary by region. This page was last reviewed on 31 May 2026. Confirm current terms with the provider before applying.

Tax and compliance in Indonesia