Guide to Obtaining a Tax Identification Number in Indonesia

Obtaining a tax identification number or NPWP in Indonesia is important for individuals and businesses operating within the country’s tax system. The NPWP ensures that both residents and non-residents fulfill their tax obligations and can benefit from tax-related services. 

A tax identification number is mandatory for legal business activities and financial transactions, whether you’re a local entrepreneur, foreign investor, or expatriate. 

What is Tax Identification Number Indonesia

A tax identification number is essential for any business in Indonesia. Locally known as NPWP (Nomor Pokok Wajib Pajak), this tax registration number is required for business licensing to register you with the tax authorities and is critical in tax compliance.

For online businesses, having a TIN helps establish their legal status and ensures efficient tax management, especially as they grow and handle bigger volumes of sales and transactions.

When Do You Need Tax Identification Number Indonesia (TIN)

You need a TIN if you fall into one of four main categories: individual or corporate taxpayers. For individual taxpayers, this includes workers with a fixed income, business owners, and freelancers. 

Additionally, married women who wish to separate their assets from their husbands and heirs of undivided estates also need a TIN. Corporate taxpayers, on the other hand, include companies and government institutions. Each of these groups is required to have an NPWP to ensure proper tax registration.

Indonesian Tax Identification Number Registration Requirements

Individuals and companies must obtain an NPWP (Tax Identification Number) to conduct business legally in Indonesia. This unique number is crucial for fulfilling tax obligations, from filing returns to claiming deductions.

Below, we outline the key requirements for securing a Tax Identification Number for an individual or company in Indonesia.

Requirements for Obtaining an Individual TIN

According to current tax regulations, every Indonesian citizen meeting specific criteria must have a Tax Identification Number (TIN).

These criteria include being over 21 years old, earning income above the non-taxable income threshold set by the government, or planning to engage in certain financial transactions, such as opening a bank account.

If you meet any of these conditions, the following are the requirements for obtaining an individual TIN, as outlined on the official Directorate General of Taxes website. Ensure you meet all the requirements so your TIN/NPWP application can be processed promptly.

Requirements for Obtaining a Company TIN

The process for obtaining a company TIN differs from that for individuals. According to the Directorate General of Taxes’ official website, the following are the complete requirements:

Registered Business Entity

Your company must be a recognized legal entity to obtain a TIN.

Business Registration Number (NIB)

Companies must be officially registered and operational before applying for a TIN. The registration process must be completed, and the company must hold a Business Registration Number (NIB) issued by the Investment Coordinating Board (BKPM) or the relevant authority.

Clear Business Activities

Companies must clearly describe their primary business activities. This helps tax authorities determine the appropriate taxes to report.

In addition, companies must ensure that all board members have individual TINs. If they still need to, they must register for individual TINs before applying for the company’s TINs.

Do You Need a Tax Identification Number to Open a Business in Indonesia?

A Tax Identification Number (TIN) is mandatory for all businesses in Indonesia. Whether you run a traditional business or a modern online store, you must meet your tax obligations. While the overall responsibilities are similar, the details have minor differences. Therefore, it is essential to review the complete guide care.

Per-20/PJ/2013 states that individuals or entities are required to obtain a TIN if they fulfill both subjective and objective criteria according to current tax regulations. The subjective criteria include:

• An individual who lives or stays in Indonesia for more than 183 days within 12 months or is present in Indonesia during a tax year and plans to reside there.
• An entity that is legally established or headquartered in Indonesia.
• An undivided inheritance representing the rightful heirs as a single entity.

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Support Your Taxation Matters with InCorp

Taxation is a crucial responsibility for businesses, but managing it can be complex and time-consuming. InCorp Indonesia can assist you with various taxation matters, including helping you obtain your Tax Identification Number (TIN).

We offer tax reporting and accounting services to simplify your tax obligations and ensure compliance. Here’s how we can support your business:

• Tax reporting – We handle all aspects of tax reporting, ensuring accuracy and compliance with Indonesian regulations.
• Accounting services – Our team provides professional accounting services tailored to your business needs.
• Tax consultation – Get expert advice on tax strategies to optimize your business operations.

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