Government Ensures No Double Taxation on Indonesian Citizens Abroad 

JAKARTA, DDTCNews – Pemerintah memastikan warga negara Indonesia (WNI) yang tinggal di luar negeri tidak akan terkena pemajakan berganda.

Assistant Minister for Tax Supervisory at the Ministry of Finance Nufransa Wira Sakti claimed that with Article 111 of the Job Creation Law which revises the Income Tax Law, the tax treatment of residents (SPDN) and non-residents (SPLN) is becoming clearer.

“The requirements for Indonesian citizens who are outside Indonesia for more than 183 days in 12 months to constitute non-residents are fulfiled by adopting the tie breaker rule scheme commonly used in tax treaties (P3B),” he said in a webinar entitled the Diaspora of Tax Rights and Obligations, Friday (19/3/2021).

Indonesian citizens who are outside Indonesia for more than 183 days in 1 year must fulfil the requirements to constitute non-residents, namely residing outside Indonesia, having centre of vital interests outside Indonesia and/or conducting the ordinary course of life outside Indonesia.

Frans said that Indonesian citizens must first become tax subjects from other countries before applying to become a non-resident. This is necessary to avoid stateless individual taxpayers.

Indonesian citizens wishing to become non-residents must also complete their tax obligations on all income when the Indonesian citizens constitute residents and have a certificate of fulfilment of the requirements to become a non-resident.

“If an Indonesian citizen has fulfiled the requirements as a non-resident, his/her tax rights and obligations comply with his/her country of residence,” said Nufransa.

If the non-resident Indonesian citizen still has income sourced from Indonesia, the income of the non-resident Indonesian citizen is subject to tax pursuant to Article 26 of the Income Tax Law. However, for non-resident Indonesian citizens who have income in the form of bond interest sourced from Indonesia, the Article 26 Income Tax rate is 10%, decreasing from the former rate of 20%.

On another note, this event was organised by the Association of Indonesian Students in the UK (PPI UK) in collaboration with the Indonesian Tax Centre in the United Kingdom (Intact-UK) and the Indonesian Embassy (KBRI) in London. (kaw)