Explanation about Tax article 26 (PPH 26) in Indonesia

1. Translate from
https://www.online-pajak.com/pph-pajak-penghasilan-pasal-26
Definition of Income Tax Article 26 (Income Tax Article
26)
According to Law Number 36 of 2008, Article 26 Income Tax is income tax that is
imposed on income received by foreign taxpayers from Indonesia in addition to
permanent establishment (BUT) in Indonesia.
Things that determine an individual or company are categorized as foreign
taxpayers are:
 an individual not residing in Indonesia, an individual living in Indonesia no more
than 183 days in a year / 12 months, and a company that is not established or
located in Indonesia, operating his business through a permanent establishment
in Indonesia.
 an individual not residing in Indonesia, an individual living in Indonesia no more
than 183 days in a year / 12 months, and a company not established or located
in Indonesia, which can receive or obtain income from Indonesia not through
conducting business through a form permanent business in Indonesia.
All business entities that carry out payment transactions (salary, interest,
dividends, royalties and the like) to the Foreign Taxpayer, are required to
withhold Article 26 of Income Tax on the transaction.
Based on PMK RI Number 9 / PMK.03 / 2018 concerning SPT, reporting PPT PPH
article 26 mandatory e-Filing since April 1, 2018.
The general rate for PPh article 26 is 20%. However, if you follow the tax treaty /
Double Tax Avoidance Agreement (P3B), the rate may change.
Tariffs for Income Tax Article 26 (Income Tax Article 26)
20% (final) rate on the gross amount charged for:
1. Dividend
2. Interest, including premiums, discounts, incentives related to loan repayment
guarantees
3. Royalties, rent and other income related to the use of assets
4. Incentives related to services, jobs and activities
5. Prizes and awards

2. 6. Pension and periodic payments
7. Swap premium and other protected transactions
8. Obtaining profits from debt write-offs
Rate of 20% (final) of net profit expected from:
1. Revenue from asset sales in Indonesia.
2. Insurance premiums, reinsurance premiums paid directly or through brokers to
insurance companies abroad.
A tariff of 20% (final) of net income expected during the sale or transfer of
company shares between a media company or a special purpose company
established or located in a country that provides tax protection that has a
special relationship for an entity or permanent establishment (BUT) established in
Indonesia.
The 20% tariff is collected from taxable income after deducting taxes, a
permanent establishment in Indonesia, unless the income is reinvested in
Indonesia.
The rate based on tax treaty known as JGI Double Tax Avoidance (P3B)
between Indonesia and other countries in the agreement, may differ from one
another. Their rates usually reduce the rate from the usual 20% rate, and some
may have a 0% rate.
Conclusion
 Article 26 Income tax is income tax withheld from any business entity in Indonesia
conducting payment transactions (salaries, interest, dividends, royalties and the
like) to foreign taxpayers.
 To make e-Filing PPh article 26 free and easy on the OnlinePajak application,
corporate taxpayers can import SPT Period 26 tax return data from the e-SPT
software into OnlinePajak first.