Sri Mulyani: Foreign Citizens Who Have Worked For 6 Months, Must Pay Income Tax

Minister of Finance, Sri Mulyani. (Photo: Setkab)

JAKARTA - The government will collect income tax (PPh) on income earned by foreign nationals (WNA) in the country. This provision applies if the foreigner lives for more than 183 days or about 6 months in Indonesia. This rule is contained in the Omnibus Law on Job Creation.

Even so, later the implementation rules regarding income tax for foreigners will be further regulated in the Minister of Finance Regulation (PMK).

Minister of Finance (Menkeu) Sri Mulyani Indrawati said the policy was taken because the government had changed the provisions of individual tax subjects (SPOP) from a worldwide system regime to a territorial system .

"Determination of individual tax subjects, if Indonesian citizens or foreigners who live for more than 183 days in Indonesia, they are subject to domestic tax. The imposition of PPh for foreigners is based on their income from Indonesia," he said, in a video conference , in Jakarta, Wednesday, October 7.

Through the territorial system, Sri said, for Indonesian citizens (WNI) who have been abroad for less than 183 days, they will be subject to foreign taxes (SPLN), with certain conditions.

The regulation will take effect in the first four years. So far, diasporas are still subject to domestic tax, so they are subject to double taxation, namely from two countries for the same income. This provision applies to taxpayers who have business or income abroad.

Furthermore, Sri Mulyani emphasized that the territorial system makes the taxation system fairer.

"This is called the territorial principle, where they are there they are taxed," he said.