Limited Liability Companies (PT) are one of the most common business entities in Indonesia due to their crucial role in national economic growth. To maintain business continuity and ensure regulatory compliance, every PT must clearly understand various tax obligations, including the latest rule changes in 2025.
Legal Basis for PT Taxation
Tax provisions for limited liability companies are regulated by several primary regulations, including:
- Law Number 6 of 1983 on General Tax Provisions and Procedures (as amended by Law Number 6 of 2023)
- Law Number 7 of 1983 on Income Tax (last amended by Law Number 6 of 2023)
- Law Number 8 of 1983 on Value-Added Tax on Goods and Services and Luxury Sales Tax
- Law Number 40 of 2007 on Limited Liability Companies
Types of Taxes for PTs
There are three main types of taxes that are obligations for companies:
1. Income Tax (PPh)
Income Tax is the primary component of tax obligations for PTs. Several relevant types of Income Tax include:
- Article 25 Income Tax: Installments for corporate income tax shortfall from the previous tax year
- Article 23 Income Tax: Withholding on dividend, interest, royalty, prize, award, bonus, rental, and service payments
- Article 22 Income Tax: Collection on imports or specific business activities, and collection on luxury goods purchases
- Article 4 Paragraph (2) Income Tax: Final tax objects
- Article 26 Income Tax: Income paid to foreign taxpayers
- Article 21 Income Tax: Salary, wages, honorarium, allowances, and other payments to employees or non-employees
2. Value Added Tax (PPN)
PTs registered as Taxable Entrepreneurs (PKP) must collect VAT on every sale of taxable goods or services. As VAT collectors, PTs must create collection evidence through Tax Invoices, deposit VAT collections to the state treasury, and report their Monthly Tax Returns.
3. Land and Building Tax (PBB)
PTs that own, control, or benefit from land and/or buildings must pay Land and Building Tax. PBB inspection provisions are now integrated into a unified regulation through Minister of Finance Regulation Number 15 of 2025.
Corporate Income Tax Rates
Standard Corporate Income Tax Rate
The standard corporate income tax rate for PTs is 22% of net profit. This rate has been in effect since the 2022 tax year based on Article 17 Paragraph (1) part b of Law Number 7 of 2021 on Tax Regulation Harmonization (HPP).
Tax Rate Reduction Facilities
Several tax rate reduction facilities can be utilized by PTs:
- PTs with Specific Gross Turnover:
- PTs with annual gross turnover not exceeding IDR 4.8 billion can be subject to final Income Tax according to Article 57 of Government Regulation Number 55 of 2022.
- For PTs with gross turnover between IDR 4.8 billion and IDR 50 billion, a 50% tax rate reduction applies from the 22% rate for taxable income from gross turnover up to IDR 4.8 billion (Article 31E Paragraph (1) of Income Tax Law).
- Public Companies:
- PTs that go public with at least 40% of shares traded on the Indonesia Stock Exchange (BEI) can obtain a 3% lower tax rate (becoming 19%).
- Requirements to obtain this rate include:
- Total paid-up shares traded on the stock exchange at least 40%
- Shares owned by at least 300 parties
- Each party may only own less than 5% of total shares
- Shareholding requirements must be met for at least 183 calendar days in 1 Tax Year
- The PT submits a report to the Directorate General of Taxes
- PTs with Turnover Below IDR 50 Billion:
- For PTs with annual turnover below IDR 50 billion, the tax rate is 22% of 75% of net profit.
Individual Companies
Individual Companies are an extension of the Limited Liability Company definition under the Job Creation Law. Even though owned by one person, this entity is still considered a corporate tax subject. The Income Tax rate for Individual Companies is the standard corporate income tax rate of 22%.
VAT Changes in 2025
VAT Rate Increase
According to Law Number 7 of 2021 on Tax Regulation Harmonization (UU HPP), the VAT rate increases to 12%, effective from January 1, 2025. However, there are special mechanisms in applying this rate:
VAT Calculation Based on Goods/Services Type
- Luxury Goods:
- Import: VAT calculated at 12% of import value
- Delivery by Taxable Entrepreneurs: Until January 31, 2025, VAT calculated as 12% of 11/12 of selling price; from February 1, 2025, calculated as 12% of full selling price
- Export: 0% VAT rate
- Non-Luxury Goods, Services, and Intangible Goods:
- VAT calculated at 12% of 11/12 of import value, selling price, or compensation
- This ensures the public experiences a burden equivalent to the previous 11% VAT rate
VAT Calculation Example
For motor vehicle delivery (luxury goods) with a selling price of IDR 600,000,000 in January 2025:
- Until January 31, 2025: 12% × (11/12 × IDR 600,000,000) = IDR 66,000,000
- From February 1, 2025: 12% × IDR 600,000,000 = IDR 72,000,000
2025 Tax Inspection Provisions
Minister of Finance Regulation 15/2025 changes the tax inspection classification system to three types:
- Comprehensive Inspection: Conducted thoroughly on all posts in Tax Return/Tax Object Submission with a 5-month timeframe
- Focused Inspection: Targeting one or several specific posts and completed within 3 months
- Specific Inspection: Simple inspection covering one or several posts with a 1-month duration
The main change in these rules is the acceleration of tax inspection time. Taxpayers now have only 5 working days to respond to the Tax Inspection Results Letter (SPHP), shorter than previous regulations.
Tax Planning for PTs
By understanding various tax provisions, PTs can implement effective tax planning:
- Utilize Tax Rate Reduction Facilities: PTs with specific gross turnover can leverage corporate income tax rate reduction facilities.
- Appropriate Business Separation: Business structure planning by separating certain business units can legally optimize tax burden.
- Proper Transfer Pricing Policy: For PTs with special relationships with other companies, implementing transfer pricing policies in accordance with regulations is crucial.
- Tax Reduction for Public Companies: For PTs planning to go public, meeting requirements for a 3% rate reduction can be a beneficial strategy.
Conclusion
Limited Liability Companies in Indonesia face complex and constantly changing tax obligations. As of 2025, there are significant changes, particularly in the VAT rate increasing to 12% and new tax inspection provisions. Understanding and complying with tax obligations not only avoids penalties but can also optimize the company’s financial aspects through effective and regulation-compliant tax planning.
It is crucial for PT management to continuously update their tax knowledge and consider consulting with professional tax consultants to ensure compliance and tax optimization in line with the latest regulatory developments.
Need Tax Support for Your PT?
Understanding continuously evolving tax regulations is not easy. Ensure your business remains compliant while being financially optimal. Contact our expert team at info@lexara.id to get professional tax consultation tailored to your business needs and scale.
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