Government Ensures No Double Taxation on Indonesian Citizens Abroad 

“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)