Making Indonesian Tax Law Accessible For International Audiences

So, Do I Need to Pay Taxes in Bali? What You Need To Know as an Expat in Indonesia

As Benjamin Franklin famously said, 'in this world nothing can be said to be certain, except death and taxes.' Even if you live in paradise - Franklin's quote still applies.

If you're a foreigner living and working in Bali, either physically or remotely, here's what you need to know about taxes.

Foreign nationals who work, run a business, or earn income in Indonesia are required to have a Taxpayer Identification Number (NPWP) as proof of tax compliance.

When Do You Become a Tax Resident?

It's actually quite straightforward - if you stay in Indonesia for more than 183 days within a 12-month period (around 6 months), you are considered eligible to become a tax resident. At that point, you are expected to obtain a tax identification number (NPWP) in order to comply with Indonesian tax regulations.

Please note that you won't automatically be issued an NPWP - you must register for it manually. While this process is not yet actively enforced by the Indonesian tax authorities, registering is necessary if you wish to stay compliant with tax laws.

However, it should be noted that you can actually only apply for a personal tax ID if you have a KITAS (a Limited Stay Permit). From a tax perspective, staying in Indonesia for more than 183 days on a tourist or visit visa without fulfilling tax obligations technically constitutes a violation of Indonesian tax law.

From an immigration standpoint, however, it is currently possible to stay in the country on non-KITAS visas for more than 183 days a year without having a tax ID, as the immigration and tax systems are not yet integrated. However, this does not mean it is the correct course of action. To properly comply with Indonesian tax regulations, if you plan to stay in Indonesia for more than 6 months, you should obtain a KITAS that aligns with the purpose of your stay, and register for a tax ID (NPWP) once you exceed the 183-day threshold.