Withholding Tax in Indonesia: Rates, Deadlines and Who Withholds

Withholding tax on services in Indonesia is the payer’s job, not the supplier’s. If your company buys a service here, you deduct the tax from what you pay, remit it, and give the supplier a slip proving you did. If the tax is not withheld, the tax office can assess your company for it.

Indonesia’s Income Tax Law numbers its withholding categories by article — 21, 23, 26 and 4(2) — and which one applies depends on two things: what you bought, and who you paid. This page is the lookup for that, followed by the two dates that matter every month. The counterparty’s 16-digit NPWP matters too: without one, Article 23 is withheld at a rate 100% higher (Income Tax Law, Article 23(1a)).

Which article applies to your payment

What to withhold, by what you bought and who you paid. Individual and company mean Indonesian residents; the individual is not your employee.

	Individual	Company	Non-resident
Consulting and technical services	Article 21 — progressive, on a deemed base	Article 23 — 2%	Article 26 — 20%
Royalties	Article 23 — 15%	Article 23 — 15%	Article 26 — 20%
Land or building rent	Article 4(2) — 10%, final	Article 4(2) — 10%, final	Article 4(2) — 10%, final
Other rent	Article 23 — 2%	Article 23 — 2%	Article 26 — 20%
Construction	Article 4(2) — final, by qualification	Article 4(2) — final, by qualification	Article 4(2) — final, where the work is done through a permanent establishment

Services, royalties, interest, dividends and the other income listed in Article 26(1), paid to a non-resident with no permanent establishment in Indonesia, are withheld at 20% under Article 26, except for land and building rent and construction, which the table shows under Article 4(2). A tax treaty can reduce the 20%, and the section on Article 26 below explains what that takes.

Article 21 — paying an individual who is not your employee

When you pay a consultant, a trainer or any other individual who is not on your payroll, Article 21 applies. The progressive rates run against a deemed taxable base rather than the full fee.

Article 21 — progressive rates

	Rate
Up to IDR 60,000,000	5%
Over IDR 60,000,000 to 250,000,000	15%
Over IDR 250,000,000 to 500,000,000	25%
Over IDR 500,000,000 to 5,000,000,000	30%
Over IDR 5,000,000,000	35%

For a one-off fee of IDR 400,000,000 to a non-employee, the working looks like this.

Description	IDR
Gross fee	400,000,000
Deemed taxable base 50% of gross	200,000,000
First band 60,000,000 × 5%	3,000,000
Second band 140,000,000 × 15%	21,000,000
Tax to withhold	24,000,000

Who actually bears it

The 50% base decides how much tax there is. A separate question decides who pays it, and it is settled by the contract rather than the regulation:

• Gross — the tax comes out of the agreed fee. The consultant invoices IDR 400,000,000, receives IDR 376,000,000, and carries the tax themselves. This is the arrangement the working above assumes.
• Gross-up — you increase the fee so that what lands after withholding is the figure the consultant wanted. The tax becomes your cost, and a larger one than the tax itself.
• Net — you pay the agreed fee in full and settle the tax on top.

Agree which of these applies before the engagement letter is signed. A consultant who quoted IDR 400,000,000 and expected to receive it will treat the deduction as a dispute rather than a tax.

Article 23 — paying a resident company

You buy a service from an Indonesian company, of a kind Article 23 covers (technical, management, consulting and the other services the Ministry of Finance lists), and withhold 2% of the fee. Royalties are the exception at 15%, and renting an asset that is not land or a building is also 2%.

Unlike Article 4(2), an Article 23 deduction is not final. The supplier credits it against their own annual liability (Income Tax Law, Article 28(1)(c)). The Bukti Potong is the slip that evidences the deduction. The worked invoice at the end of this page shows how that lands in practice.

Article 4(2) — construction, and rent of property

In construction the rate depends on the supplier’s certificate as well as the kind of work, which is why the certificate is worth asking for before the first invoice, not after it.

• Construction work — small-scale or individual certificate 1.75%
• Construction work — other certified contractors 2.65%
• Integrated construction work — certified 2.65%
• Construction consulting — certified 3.5%
• Construction work — no certificate 4%
• Integrated construction work — no certificate 4%
• Construction consulting — no certificate 6%
• Rent of land or buildings 10%

0%2.5%5%7.5%10%

PP 51/2008 as amended by PP 9/2022 for construction; PP 34/2017 for land and building rent

These are final taxes. The supplier does not credit them against an annual liability the way an Article 23 deduction is credited — the tax is settled at the point of payment.

Article 26 — paying someone outside Indonesia

Payments to a non-resident with no permanent establishment in Indonesia for services, royalties, dividends or interest are withheld at 20% of the gross amount (Income Tax Law, Article 26(1), as amended by UU 6/2023). A tax treaty between Indonesia and the recipient’s country may reduce that, sometimes to nil, but the reduction is not automatic.

Indonesia’s treaty network and the current rates are published by the Directorate General of Taxes.

How to claim a treaty rate

The paperwork is settled before the tax is withheld (PMK 112/2025, the Minister of Finance’s regulation on applying tax treaties, Articles 8 to 10):

1. The recipient gives you a DGT Form (the Directorate General of Taxes’ form), certified by the tax authority of its home country. A certificate of residence from that authority can take the place of the certification. One form covers up to 12 months.
2. The recipient must be the beneficial owner of the income: the one who actually benefits from it, not an agent, nominee or conduit passing it on (Income Tax Law, Article 26(1a); PMK 112/2025, Article 19).
3. You check the form and upload it through Coretax, the tax office’s online system, and receive a receipt. You then withhold at the treaty rate.

Where the conditions are not met, you withhold the full 20% (PMK 112/2025, Article 10(4)). That is not always final. If the recipient qualified but the form arrived after the tax was withheld, the excess can be reclaimed, and it is the Indonesian payer that applies, not the recipient (PMK 81/2024, Articles 133 and 134). Under our corporate tax service, we apply the treaty rate and prepare that refund application for you.

The two dates, every month

1. 1
   On payment

   Withhold

   Deduct the tax when the payment is made, calculated on the value before VAT.

2. 2
   By the 15th

   Pay it over

   Remit what you withheld last month to the tax office.

3. 3
   By the 20th

   File the return

   Submit the monthly withholding return, which reports the slips you gave.

Where withholding tax on services usually goes wrong

A worked invoice, end to end

A resident consulting company, VAT-registered, invoices you IDR 10,000,000 for services. Article 23 applies at 2%, and VAT is added on top of the service value.

Description	IDR
Service fee before VAT	10,000,000
Withholding tax Article 23, 2% × 10,000,000	(200,000)
Sub-total	9,800,000
VAT effective 11% × 10,000,000	1,100,000
Amount you pay the supplier	10,900,000

The supplier receives IDR 10,900,000 and a Bukti Potong for IDR 200,000. The IDR 200,000 goes to the tax office, not to them, and they credit it against their own liability. Keep the full set of slips with your bookkeeping.

What to do with this

Withholding is not difficult, but it is unforgiving: the obligation sits with the payer, the dates are fixed, and the evidence has to exist before anyone asks for it. If you would rather the calendar were somebody else’s problem, our corporate tax and compliance service carries it monthly.