Indonesia Withholding Tax — PPh 23, PPh 26, PPh 4(2) Final — Skill v1.0

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Section 1 — Quick reference

Field	Value
Country	Indonesia (Republik Indonesia)
Taxes covered	PPh 23 (services/passive income — residents); PPh 26 (non-residents); PPh 4(2) Final (specified items)
Currency	IDR (Indonesian Rupiah / Rp) only. Payments in foreign currency are converted at the Menteri Keuangan (KMK) reference rate on the date the tax becomes payable.
Tax year	Calendar year (1 Jan – 31 Dec)
Current tax year	2025
Tax authority	Direktorat Jenderal Pajak (DJP) — Directorate General of Taxes
Filing portal	Coretax DJP (https://coretaxdjp.pajak.go.id) — replaced the legacy DJP Online / e-Bupot 23/26 desktop from 1 January 2025
Withholding slip	Bukti Pemotongan PPh (Bupot) — must be issued to the payee for every withholding
Monthly payment deadline	10th of the month following the tax point (kode billing via SSP)
Monthly return deadline	20th of the month following the tax point (SPT Masa PPh Unifikasi via Coretax)
Governing law	UU PPh No. 36/2008 as last amended by UU HPP No. 7/2021; PP 9/2021 (bond interest); PP 51/2008 jo. PP 9/2022 (construction services); PMK 141/PMK.03/2015 (services subject to PPh 23); PMK 34/PMK.010/2017 (land/building rental); PER-2/PJ/2024 (e-Bupot Unifikasi); P3B treaty network with ~70 countries
Validated by	Pending — requires sign-off by a qualified Indonesian tax consultant (Konsultan Pajak bersertifikat)
Skill version	1.0

Quick-look: payment type → article → rate

Payment type	Article	Rate (resident, with NPWP)	Rate (no NPWP)	Final?
Services (jasa) listed in PMK 141/2015	PPh 23	2% gross	4% gross	No (creditable)
Sewa — rental of equipment / movable property	PPh 23	2% gross	4% gross	No
Dividend to resident corporate (non-exempt)	PPh 23	15%	30%	No
Interest (non-bank) to resident	PPh 23	15%	30%	No
Royalty to resident	PPh 23	15%	30%	No
Hadiah / prize (non-lottery) to resident	PPh 23	15%	30%	No
Rental of land and/or building	PPh 4(2)	10%	10%	Yes — Final
Construction services — small qualified contractor	PPh 4(2)	1.75%	1.75%	Yes — Final
Construction services — medium / large qualified	PPh 4(2)	2.65%	2.65%	Yes — Final
Construction services — non-qualified contractor	PPh 4(2)	4%	4%	Yes — Final
Construction consulting — qualified	PPh 4(2)	3.5%	3.5%	Yes — Final
Construction consulting — non-qualified	PPh 4(2)	6%	6%	Yes — Final
Bank deposit interest, SBI, savings	PPh 4(2)	20%	20%	Yes — Final
Government bond (SUN/SBN) interest — resident	PPh 4(2)	10%	10%	Yes — Final
Lottery prize (hadiah undian)	PPh 4(2)	25%	25%	Yes — Final
Share sale on IDX — regular	PPh 4(2)	0.1% gross	0.1% gross	Yes — Final
Founders' shares additional levy at IPO	PPh 4(2)	+0.5% on founder shares	+0.5%	Yes — Final
Transfer of land/building (sale by seller)	PPh 4(2)	2.5% gross	2.5%	Yes — Final — DEFERRED (mention only)
Any payment to a non-resident (subject to treaty)	PPh 26	20% gross (treaty rate if DGT Form valid)	20%	Yes — Final

Critical rule (Pasal 23 ayat (1a) UU PPh). When the recipient does not provide a valid NPWP (Nomor Pokok Wajib Pajak), the PPh 23 rate is doubled — i.e. 2% becomes 4%, 15% becomes 30%. This does not apply to PPh 4(2) Final or PPh 26.

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Section 2 — Required inputs and refusal catalogue

2.1 Mandatory inputs before any withholding computation

Refuse to compute withholding tax without ALL of the following:

Input	Why it matters
Payer identity and NPWP	The withholding agent must be a registered Indonesian taxpayer; obligation depends on payer category (corporate, government, individuals appointed per KEP-50/PJ/1994)
Recipient legal name and tax residence	Determines PPh 23 (resident) vs PPh 26 (non-resident); also whether DGT Form is required
Recipient NPWP (if resident)	Determines whether PPh 23 doubles to 4% / 30%
Nature of payment (jasa, sewa, royalti, bunga, dividen, etc.)	Determines article and whether final or creditable
Gross contract value, VAT-exclusive	Base excludes PPN; if invoice is gross-of-VAT, strip the 12% PPN first
Date of payment OR accrual, whichever is earlier	Tax point under Pasal 23 ayat (4)
For PPh 26 treaty: original Form DGT-1/DGT-2 signed by foreign tax authority, dated before payment	Treaty relief denied if DGT Form not held at tax point
For construction services: SBU qualification class	Determines 1.75% / 2.65% / 4% rate under PP 9/2022
For rental: land/building vs movable	Land/building → PPh 4(2) 10%. Movable (vehicle, machinery, equipment) → PPh 23 2%/4%.

2.2 Refusal catalogue

Refuse the engagement (explicit refusal, do not guess) in any of the following cases:

#	Situation	Reason
R-ID-WHT-1	Payment to an employee/director under employment	PPh 21 — out of scope. Route to id-payroll-pph21.
R-ID-WHT-2	Import or luxury goods subject to PPh 22	Import-stage regime collected by DGCE; out of scope.
R-ID-WHT-3	Shipping, airline, or oil & gas contractor (PPh 15)	Special sectoral final regime; out of scope.
R-ID-WHT-4	Sale of land/building (PPh 4(2) transfer at 2.5%)	Mention only; refer to PPAT/notaris.
R-ID-WHT-5	Withholding by individual payer not appointed under KEP-50/PJ/1994	Most individuals are NOT withholding agents; do not impose obligation unless appointed.
R-ID-WHT-6	Treaty rate without valid DGT-1/DGT-2 before tax point	Per PER-25/PJ/2018 — no DGT, no treaty; default 20%.
R-ID-WHT-7	Crypto / e-commerce platform commission (PMK 68/2022, PMK 71/2022)	Bespoke final regimes — out of scope.
R-ID-WHT-8	UMKM final tax 0.5% under PP 55/2022	Self-imposed seller turnover tax, NOT buyer withholding. Do not confuse with PPh 23.
R-ID-WHT-9	Partial-year withholding-agent appointments / branch nuances / split contracts	Refer to a Konsultan Pajak.
R-ID-WHT-10	Payments to a BUT (Indonesian PE of foreign company)	BUT is taxed as domestic (PPh 23 not PPh 26), but Pasal 26 ayat (4) Branch Profits Tax on after-tax profits is delicate — refer to a Konsultan Pajak.

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Section 3 — PPh 23 (Pajak Penghasilan Pasal 23)

3.1 Statutory basis

Pasal 23 UU PPh No. 36/2008 as last amended by UU HPP No. 7/2021. Implementing rules in PMK 141/PMK.03/2015 (list of 62 services subject to 2% withholding). The withholding agent is any Indonesian-resident body (badan), government entity, permanent establishment, or appointed individual making a payment of the listed type to another Indonesian resident.

3.2 The 2% / 4% rate (services and rental of movable property)

Under Pasal 23 ayat (1) huruf c UU PPh, the rate is 2% of the gross amount for:

• Sewa dan penghasilan lain sehubungan dengan penggunaan harta — rental and other income from the use of property, except rental of land and building (which falls under PPh 4(2)).
• Imbalan sehubungan dengan jasa — fees for services performed, covering the 62 categories listed in PMK 141/PMK.03/2015 including: jasa teknik, jasa manajemen, jasa konsultan (kecuali konsultan konstruksi), jasa akuntansi/pembukuan/atestasi, jasa hukum, jasa perancang/desain, jasa kebersihan, katering, maintenance and repair of non-vehicles, and jasa pengurusan transportasi (freight forwarding other than air freight).

Pasal 23 ayat (1a): if the recipient has no NPWP, the rate is 100% higher — i.e. 4%.

3.3 The 15% / 30% rate (passive income)

Under Pasal 23 ayat (1) huruf a UU PPh, the rate is 15% of the gross amount for:

• Dividen — dividends paid to resident corporate shareholders, except dividends covered by the participation exemption under Pasal 4 ayat (3) huruf f (i.e. dividends from Indonesian companies to corporate shareholders holding ≥25% are exempt) and dividends reinvested under Pasal 4 ayat (3) huruf f UU HPP for individuals.
• Bunga — interest, premium, discount, and similar, except bank deposit interest (which falls under PPh 4(2) Final at 20%).
• Royalti — royalties for the right to use intellectual property, patents, trademarks, copyrights, know-how, and franchise/licence fees.
• Hadiah, penghargaan, bonus, dan sejenisnya — prizes and awards other than lottery prizes (which fall under PPh 4(2) Final at 25%) and other than those already taxed under PPh 21 (which would be employment-related awards).

No-NPWP surcharge doubles these to 30%.

3.4 Tax base

The withholding base is the gross amount excluding PPN. If the invoice shows IDR 110,000,000 inclusive of 12% PPN, the PPh 23 base is IDR 110,000,000 / 1.12 = IDR 98,214,286, not IDR 110,000,000.

For reimbursements (reimbursable expenses), if the reimbursement is supported by third-party invoices in the name of the payer, it is excluded from the withholding base per SE-53/PJ/2009. If it is in the name of the service provider, it is included.

3.5 Exemptions

PPh 23 does NOT apply to (Pasal 23 ayat (4) UU PPh): income paid to a bank; finance lease payments (sewa guna usaha dengan hak opsi); dividends qualifying for participation exemption under Pasal 4 ayat (3) huruf f; distributions of profit to firm/CV/persekutuan partners; SHU (sisa hasil usaha) of a koperasi paid to members; income already subject to PPh Final under Pasal 4 ayat (2).

3.6 Worked mini-example — PPh 23 on technical services

PT ABC engages PT XYZ (resident, NPWP valid) for technical engineering. Invoice IDR 220,000,000 incl. 12% PPN. PPN component IDR 23,571,429 (220M × 12/112); tax base IDR 196,428,571; PPh 23 at 2% = IDR 3,928,571; net to PT XYZ IDR 216,071,429. PT ABC deposits IDR 3,928,571 by the 10th of the next month and issues Bupot PPh 23. Without NPWP: 4% = IDR 7,857,143.

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Section 4 — PPh 26 (Pajak Penghasilan Pasal 26)

4.1 Statutory basis

Pasal 26 UU PPh No. 36/2008 as last amended by UU HPP No. 7/2021. PPh 26 is the withholding regime for payments from Indonesia to non-residents (Subjek Pajak Luar Negeri / SPLN). It is a final tax in the hands of the non-resident, unless the non-resident has a permanent establishment (BUT) in Indonesia, in which case the income flows to the BUT and is taxed as resident income (with PPh 23 applying instead, and Branch Profits Tax under Pasal 26 ayat (4) on after-tax profits).

4.2 Standard rate — 20% gross

Under Pasal 26 ayat (1), the default rate is 20% of the gross amount for: dividen; bunga (incl. premium, discount, guarantee fees); royalti, sewa, dan penghasilan lain sehubungan dengan penggunaan harta; imbalan sehubungan dengan jasa, pekerjaan, dan kegiatan (incl. services performed abroad for an Indonesian payer per SE-04/PJ/2017); hadiah dan penghargaan; pensiun dan pembayaran berkala lainnya; premi swap dan transaksi lindung nilai; keuntungan karena pembebasan utang (gain from debt forgiveness).

4.3 Branch Profits Tax — Pasal 26 ayat (4)

After-tax profits of an Indonesian permanent establishment (BUT) repatriated abroad are subject to an additional 20% Branch Profits Tax on the after-tax profit, unless reduced by an applicable P3B (most treaties cap BPT at 10%–15%, some at 5%). BPT is waived if profits are reinvested in Indonesia subject to PMK 14/PMK.03/2011 conditions.

4.4 Treaty relief (P3B)

Indonesia has tax treaties (Persetujuan Penghindaran Pajak Berganda / P3B) with approximately 70 countries. To claim the treaty-reduced rate, the non-resident recipient MUST provide the payer, before the tax point:

• Form DGT-1 (general) or Form DGT-2 (banks, pension funds, and other listed entities), per PER-25/PJ/2018 as amended by PER-08/PJ/2019.
• The form must be signed by the competent authority of the residence country (Part II) — not merely by the recipient.
• The form is valid for up to 12 months from the date of the foreign competent authority's signature.
• The form must be submitted electronically by the payer via Coretax (previously DJP Online) before filing the SPT Masa.

Without a valid, attested DGT Form held by the payer at the tax point, the default 20% rate applies — even if a treaty exists. The non-resident can in theory claim a refund, but this is rarely practical.

Common treaty rates (illustrative — verify against the specific P3B before applying). Singapore: dividends 10/15%, interest 10%, royalty 8/10%. Netherlands: dividends 5/10%, interest 0/5/10%, royalty 5/10%. United States: dividends 10/15%, interest 10%, royalty 10%. United Kingdom: dividends 10/15%, interest 10%, royalty 10/15%. Japan: dividends 10/15%, interest 10%, royalty 10%. Hong Kong: dividends 5/10%, interest 10%, royalty 5%. Australia: dividends 15%, interest 10%, royalty 10/15%.

Always verify the exact P3B text. Treaty rates differ between portfolio and substantial dividends, between specified and unspecified interest, and between cultural vs industrial royalties.

4.5 Worked mini-example — PPh 26 to non-resident software vendor

Indonesian PT ABC pays USD 50,000 to a Singapore-resident software company for a license fee. KMK exchange rate on payment date: IDR 16,000 / USD.

Scenario A — no DGT Form on file.

• Gross IDR equivalent: USD 50,000 × IDR 16,000 = IDR 800,000,000
• PPh 26 at 20%: IDR 160,000,000
• Net remitted abroad: IDR 640,000,000 (USD 40,000)
• PT ABC issues Bupot PPh 26 to the Singapore vendor and remits IDR 160,000,000 to DJP.

Scenario B — valid DGT-1 from IRAS Singapore on file.

• Indonesia–Singapore treaty royalty rate (Article 12): 8% for use of equipment, 10% for general royalties. Software licence fees are commonly treated as royalties → 10%.
• PPh 26 at 10%: IDR 80,000,000
• Net remitted abroad: IDR 720,000,000

Software classification caveat. Whether a payment for software is a "royalty" (per Article 12 of the treaty) or "business profits" (Article 7) is a persistent area of dispute. Default to royalty treatment for shrink-wrap, SaaS subscription, and licensed-use software; treat as business profits only with a robust legal opinion. Indonesia's interpretation under SE-03/PJ.03/2024 generally treats software payments as royalty.

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Section 5 — PPh 4(2) Final — major categories

PPh Pasal 4 ayat (2) UU PPh is the "final" withholding regime. Income subject to PPh 4(2) is taxed at a fixed rate and is not aggregated with other income in the annual return — the withholding is the final tax burden on that income.

5.1 Rental of land and/or building — PMK 34/PMK.010/2017

Rate: 10% of gross rental, applied to all forms of rental of tanah dan/atau bangunan (land, building, apartment, office, retail, warehouse, factory). Withholding agent: the tenant if a corporate/government body or appointed individual; otherwise the landlord self-deposits. Base: gross rental including service charges (biaya servis) but excluding PPN. Final — the landlord does not aggregate this in the SPT Tahunan.

If the building owner provides significant operational services (hotel, serviced office), the entire stream may be re-characterised as business income (not rental) and fall outside PPh 4(2). Check substance.

5.2 Construction services — PP 51/2008 jo. PP 9/2022, PMK 141/2015

Construction services are split between construction execution (pelaksanaan konstruksi) and construction consultancy (perencanaan / pengawasan konstruksi). Rates depend on the contractor's qualification certificate (Sertifikat Badan Usaha / SBU) issued by LPJK.

Service	Contractor qualification	Rate
Pelaksanaan konstruksi	Small (Kecil) qualified	1.75%
Pelaksanaan konstruksi	Medium (Menengah) or Large (Besar) qualified	2.65%
Pelaksanaan konstruksi	Without SBU qualification	4%
Pelaksanaan konstruksi	Individual (orang pribadi) qualified	2.65%
Perencanaan / pengawasan	Qualified (any class)	3.5%
Perencanaan / pengawasan	Without SBU qualification	6%
Integrated construction work (pekerjaan terintegrasi)	Qualified	2.65%
Integrated construction work	Without SBU	4%

All rates are applied to gross contract value excluding PPN. Final — the contractor does not aggregate this with other income. The PPh 4(2) withheld is the contractor's final liability on that contract.

5.3 Interest on bank deposits, savings, and SBI — PP 131/2000 jo. PP 123/2015

20% of gross interest, final, withheld by the bank. Same 20% applies to non-resident depositors (treaty may reduce). Includes time deposits (deposito), savings (tabungan), and SBI; Bank Indonesia syariah instruments (SBIS) are treated equivalently.

5.4 Interest on government bonds (SBN) — PP 9/2021

10% final to both resident and non-resident holders (down from pre-2021 15%/20%). Withholding agent: the paying agent/custodian.

5.5 Lottery prizes (hadiah undian) — PP 132/2000

25% of gross prize value, final, withheld by the lottery organiser. Includes cash and in-kind prizes (in-kind at market value). Distinct from PPh 23's 15% on non-lottery prizes (competition awards, loyalty prizes).

5.6 Share sales on the Indonesia Stock Exchange (IDX) — PP 14/1997 jo. PP 41/1994

Regular sales: 0.1% of gross transaction value, final, withheld by the broker. Founders' shares: additional +0.5% on saham pendiri at IPO, in addition to the 0.1% on the actual sale. Applies only to IDX-listed transactions. Off-exchange share transfers are NOT subject to PPh 4(2) (general progressive rates, or PMK 256/PMK.03/2008 narrow scope — defer to consultant).

5.7 Transfer of land/building by the seller — PP 34/2016 (mention only)

2.5% of gross transfer value, paid by the seller before the deed is signed by the PPAT/notaris. Reduced to 1% for transfers to Government for public-interest purposes and simple housing programs. DEFERRED — this is a real-estate transfer regime separate from supplier-payment withholding. Refer to a Konsultan Pajak / PPAT.

5.8 Other PPh 4(2) Final categories (brief mention, not computed)

• Hadiah penjualan to consumers (25%, PP 132/2000); pengalihan saham mitra modal ventura (0.1%); dividends to resident individuals post UU HPP (Pasal 4 ayat (3) huruf f — exempt if reinvested in Indonesia, otherwise progressive — not 10% final as pre-HPP); turnkey/EPC contracts (use construction execution rate, not separate PPh 23).

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Section 6 — Bukti Pemotongan (Bupot) and e-Bupot Unifikasi via Coretax

6.1 What is e-Bupot Unifikasi?

Per PER-2/PJ/2024, DJP unified the previously separate e-Bupot PPh 23/26 and e-Bupot PPh 21/26 systems into a single e-Bupot Unifikasi application, accessed since 1 January 2025 through Coretax DJP (https://coretaxdjp.pajak.go.id). The unified slip and unified SPT Masa cover PPh 21, 22, 23, 26, 4(2), and 15 in a single monthly filing. The earlier desktop e-SPT Masa PPh 23/26 and the web e-Bupot 23/26 were retired with the Coretax rollout.

6.2 Issuance flow

1. Identify the transaction — enter supplier NPWP/NIK (or passport for non-resident), gross amount, article (23/26/4(2)/15), and object code (kode objek pajak — e.g. 24-104-01 technical services, 27-100-99 foreign royalty).
2. System computes the tax — Coretax pre-populates the rate based on object code and NPWP status.
3. Generate the Bupot — system assigns a unique Nomor Bupot. The PDF is shareable with the recipient and serves as tax credit (non-final PPh 23) or tax receipt (PPh 26 / 4(2) Final).
4. Pay the tax — generate kode billing (ID Billing) and pay via bank/ATM/e-wallet by the 10th of the following month using SSP.
5. File SPT Masa Unifikasi — submit by the 20th of the following month, reconciling Bupot issued with SSP paid.

6.3 Bupot content

Identity of payer (NPWP, name, address); identity of recipient (NPWP/NIK for residents; passport/TIN for non-residents); article; object code; tax base (DPP); rate; tax amount; underlying invoice reference; DGT Form number and date (PPh 26 treaty); tax point date.

6.4 Corrections

Pembetulan via Coretax triggers a revised SPT Masa Unifikasi. Under-deposited tax attracts ~1% per month interest under UU KUP Pasal 9 ayat (2a) (capped per UU HPP). Late-deposit interest is set by PMK 81/PMK.03/2024 at the benchmark-rate-linked monthly tariff.

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Section 7 — Monthly mechanics

7.1 Tax point

The withholding obligation arises at the earlier of (Pasal 8 PMK 242/PMK.03/2014):

• Date of cash payment, or
• Date the cost/expense is accrued (booked as biaya) in the payer's accounting records, or
• Date of the invoice from the supplier.

In practice for accrual-basis companies, the tax point is often the invoice date.

7.2 Payment deadline — 10th of the following month

The tax must be paid via SSP (Surat Setoran Pajak) using a kode billing generated in Coretax, by the 10th of the month following the tax point. Late payment triggers interest under UU KUP Pasal 9 ayat (2a) at the monthly tariff set by PMK (typically ~1% per month, capped at 24 months).

7.3 Filing deadline — 20th of the following month

The unified return SPT Masa PPh Unifikasi is filed via Coretax by the 20th of the following month. The return must be filed even if zero (SPT nihil), unless the agent has been formally deregistered as a withholding agent.

Late filing triggers a fixed administrative penalty of IDR 100,000 per month per type under UU KUP Pasal 7 (unchanged through 2025).

7.4 Year-end reconciliation

There is no separate annual PPh 23/26/4(2) return. The annual SPT Tahunan PPh Badan (corporate income tax return) of the withholding agent will list the total PPh 23/26/4(2) withheld and remitted in the year, cross-checked with the 12 monthly Unifikasi returns.

The recipient of PPh 23 withholding (non-final) credits the amount against its own annual PPh Badan / PPh OP — the Bupot is the credit evidence (kredit pajak).

The recipient of PPh 26 / PPh 4(2) Final does NOT credit it — the tax is final.

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Section 8 — Worked examples

8.1 Consultant invoice (PPh 23, with NPWP)

PT Klien Indonesia receives an invoice from CV Konsultan Hukum dated 15 March 2025 for legal advisory services — fee IDR 50,000,000 plus PPN 12% IDR 6,000,000, invoice total IDR 56,000,000. CV Konsultan Hukum is a registered resident PKP with a valid NPWP.

• Article: PPh 23, object code 24-104-08 (jasa konsultan hukum)
• Tax base: IDR 50,000,000 (excluding PPN); Rate: 2%
• PPh 23 to withhold: IDR 1,000,000
• Net payment to CV Konsultan Hukum: IDR 55,000,000; PPN of IDR 6,000,000 paid to CV Konsultan Hukum (who remits via its own PPN return — the buyer claims input VAT).
• Timeline: tax point 15 March; deposit PPh 23 by 10 April via kode billing in Coretax; issue Bupot PPh 23; file SPT Masa Unifikasi for March 2025 by 20 April.

8.2 Rental of office space (PPh 4(2) Final)

PT Klien Indonesia rents an office floor from PT Properti Sentosa at IDR 90,000,000 per quarter, plus PPN 12% IDR 10,800,000 — invoice total IDR 100,800,000.

• Article: PPh 4(2), object code 28-403-01 (sewa tanah dan/atau bangunan)
• Tax base: IDR 90,000,000 (excluding PPN); Rate: 10% final per PMK 34/PMK.010/2017
• PPh 4(2) to withhold: IDR 9,000,000; Net payment: IDR 91,800,000
• Final — PT Properti does not aggregate this rental income in its annual SPT Tahunan (subject to the substance test in 5.1).
• If the tenant were an individual not appointed under KEP-50/PJ/1994, the landlord self-deposits the 10% (see R-ID-WHT-5).

8.3 Payment to non-resident software vendor (PPh 26 with and without treaty)

PT Klien Indonesia subscribes to a SaaS platform from Acme Inc., a US-resident company with no Indonesian PE — annual licence USD 24,000, invoiced 1 February 2025, KMK rate IDR 16,200/USD (use the actual KMK rate). Gross: IDR 388,800,000.

Scenario A — no DGT Form on file. Article PPh 26 (object 27-100-09 royalti luar negeri — software), rate 20% per Pasal 26 ayat (1) huruf c → PPh 26 IDR 77,760,000; net remitted IDR 311,040,000 (USD 19,200). PPN PMSE (12% on IDR 388,800,000 = IDR 46,656,000) collected separately under PMK 60/PMK.03/2022.

Scenario B — valid Form DGT-1 from IRS on file dated before 1 February 2025. US–Indonesia P3B (1988) Article 13 royalty rate is 10% (incl. software) → PPh 26 IDR 38,880,000; net remitted IDR 349,920,000 (USD 21,600). DGT-1 number and date recorded on the Bupot PPh 26.

Verify the actual P3B Article and the SaaS-as-royalty position with the underlying treaty text and Indonesian practice. Indonesia's general position post SE-03/PJ.03/2024 is that SaaS / software access is royalty.

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Section 9 — Conservative defaults

When any input is ambiguous, missing, or contested, default to the conservative position that minimises the risk of under-withholding (since under-withholding makes the payer secondarily liable for the unpaid tax plus interest plus penalties under UU KUP Pasal 13 — and the recipient has no incentive to remediate):

Ambiguity	Conservative default
Recipient NPWP status unknown	Treat as no-NPWP → PPh 23 doubled to 4% / 30%
Resident vs non-resident unclear	Treat as non-resident → PPh 26 at 20% (UNLESS recipient is clearly Indonesian)
Service vs goods classification ambiguous	Treat as service → PPh 23 applies
Construction contractor SBU unverified	Treat as non-qualified → 4% / 6%
Software licence vs business profits	Treat as royalty → withhold per Pasal 26 / Pasal 23
Reimbursement of expenses unclear	Include in withholding base unless third-party invoices are in the payer's name
Treaty rate claim without original DGT Form	Apply default 20% PPh 26 — no treaty relief
Rental — land/building vs equipment unclear	If immovable property attached, PPh 4(2) 10% (final, broader)
KMK exchange rate not yet published	Defer payment to next day; do NOT use Bank Indonesia mid-rate
Mixed contract (goods + services)	Split if separately invoiced; if bundled, withhold on the full amount as services
Multiple object codes possible	Pick the higher-rate code

The general principle: withhold the higher rate when in doubt and let the recipient claim a refund or credit. A refund claim from DJP is administratively heavy but available; making good an under-withholding from the payer's own pocket months after the supplier has been paid is much worse.

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Section 10 — Sources

Primary legislation. UU No. 36/2008 (Income Tax Law), as last amended by UU No. 7/2021 (UU HPP); UU No. 6/1983 (UU KUP), as last amended by UU HPP and PERPPU 2/2022.

Government Regulations (Peraturan Pemerintah). PP 131/2000 jo. PP 123/2015 (bank deposit interest 20% Final); PP 132/2000 (lottery 25% Final); PP 14/1997 jo. PP 41/1994 (IDX shares 0.1% + 0.5% founder); PP 51/2008 jo. PP 9/2022 (construction services); PP 34/2016 (land/building transfer 2.5%, mention only); PP 9/2021 (bond interest 10% Final); PP 55/2022 (UMKM final 0.5%, out of scope — R-ID-WHT-8).

Ministerial Regulations (PMK). PMK 141/PMK.03/2015 (62 services for PPh 23); PMK 34/PMK.010/2017 (rental of land/building 10%); PMK 242/PMK.03/2014 (PPh payment and tax point); PMK 14/PMK.03/2011 (BUT reinvestment to avoid BPT); PMK 60/PMK.03/2022 (PPN PMSE); PMK 81/PMK.03/2024 (late-payment interest tariff 2024–2025).

DJP Regulations (PER) and circulars. PER-25/PJ/2018 as amended by PER-08/PJ/2019 (DGT-1/DGT-2); PER-2/PJ/2024 (e-Bupot Unifikasi via Coretax); PER-04/PJ/2017 and successors (kode objek pajak); SE-04/PJ/2017 (services performed abroad for an Indonesian payer); SE-53/PJ/2009 (reimbursements in PPh 23 base); SE-03/PJ.03/2024 (software / SaaS as royalty).

Decree. KEP-50/PJ/1994 — appointment of certain individuals as withholding agents for rental of land/building.

Treaty network. P3B (Persetujuan Penghindaran Pajak Berganda) — Indonesia's ~70 bilateral treaties. Always verify the specific treaty article text.

Portal. Coretax DJP — https://coretaxdjp.pajak.go.id — operational from 1 January 2025; replaced DJP Online for withholding filings.

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Section 11 — Cross-references

• For PPh 21 (employee/personnel withholding) → see id-payroll-pph21.md.
• For PPN (VAT, including how withholding base excludes PPN) → see indonesia-vat.md.
• For Indonesian client intake and identity verification → see intake.md.
• For Indonesia foundation (currency, calendar, authority, general principles) → see foundation.md.

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Skill version 1.0. Tax year 2025. Pending sign-off by a qualified Indonesian Konsultan Pajak. Do not file a withholding tax return based solely on this skill without credentialed local review.

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