A withholding tax is a common form of tax that most countries impose on cross-border transactions and other payments involving non-residents. It is called a withholding tax because it is levied on the payer rather than the recipient, meaning the taxable amount is withheld from the recipient.

Withholding taxes differ based on location and income type.

Withholding tax rates in Indonesia

Withholding tax applies to both residents and non-resident companies in Indonesia. The tax rate on dividends is 15 percent for residents and 20 percent for non-residents (unless they have an applicable tax treaty). The withholding tax rate on interest and royalties are also set at 15 percent for residents and 20 percent for non-residents.

Withholding Tax Rates for Resident and Non-Resident Companies in Indonesia
Nature of income Tax rate (%)
  Residents  Non-Residents 
Dividends  15 20
Interest 15 20
Royalties 15 20




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