Withholding Income Tax - Article 15

If you run a domestic shipping business leasing ships or transporting goods and/or passengers between ports in Indonesia, from ports in Indonesia to ports outside Indonesia and vice versa, or between ports outside Indonesia, the following are to be considered:

1. The lessee will withhold Article 15 Income Tax at a rate of: 1.2% x Gross Income;
2. Request the withholding final Article 15 Income Tax receipt;
3. File all incomes earned in a Fiscal Year on an Annual Income Tax Return and enclose the list of withholding final Article 15 Income Taxes;
4. If the lessee does not withhold Article 15 Income Tax or is not a Withholding Agent, you must pay the Article 15 Income Tax Payable yourself using the calculation formula above no later than the 15th day of the following month and file the Article 15 Income Tax Return no later than the 20th day of the following month;
5. You do not need to pay Article 25 Income Tax every month.

If you are an individual/entity leasing ships from a domestic shipping company, the following are to be considered:

1. Withhold Article 15 Income Tax at a rate of 1.2% of the gross amount paid to the domestic shipping company;
2. Pay the withholding Article 15 Income Tax to the State Treasury no later than the 10th day of the following month using a billing code with MAP Code 411128 and Payment Type Code 410.

The subject of Article 15 Income Tax on overseas shipping or flight is a Taxpayer domiciled overseas conducting business through a Permanent Establishment in Indonesia.

If you represent a Permanent Establishment Taxpayer in Indonesia owning ships for shipping or airplanes for flight, the following are to be considered:

1. The lessee will withhold Article 15 Income Tax at a rate of: 2.64% of gross income;
2. Request the withholding Article 15 Income Tax receipt;
3. File all incomes earned in a Fiscal Year on an Annual Income Tax Return and enclose the list of withholding final Article 15 Income Taxes;
4. If the lessee does not withhold Article 15 Income Tax or is not a Withholding Agent, you must pay the Article 15 Income Tax Payable yourself using the calculation formula above no later than the 15th day of the following month and file the Article 15 Income Tax Return no later than the 20th day of the following month;
5. You do not need to pay Article 25 Income Tax every month.

If you are an owner of ships/airplanes or their proxy but do not have a Permanent Establishment to carry out business activities in Indonesia, Article 26 of the Income Tax Laws  [Withholding Article 26 Income Tax] will apply to you.

If you charter ships/airplanes for overseas shipping/flight, the following are to be considered:

1. Withhold Article 15 Income Tax at a rate of 2.64% of the gross income paid to the domestic shipping company;
2. The gross income is calculated based on the charter agreement for transportation from Indonesian ports to other ports in Indonesia and from Indonesian ports to ports outside Indonesia. Thus, for transportation from ports outside Indonesia to ports in Indonesia, there will be no Article 15 Income Tax Payable;
3. Pay the withholding Article 15 Income Tax to the State Treasury no later than the 10th day of the following month using a billing code with MAP Code 411128 and Payment Type Code 411.

If you are an owner of airlines domiciled in Indonesia (Resident Corporate Taxpayer) earning income from charter agreements, the following are to be considered:

1. The lessee will withhold Article 15 Income Tax at a rate of: 1.8% of gross income;
2. Request and keep the withholding Article 15 Income Tax receipt;
3. File all incomes earned in a Fiscal Year on an Annual Income Tax Return and credit the withholding Article 15 Income Tax on the Annual Income Tax Return;
4. If the lessee does not withhold Article 15 Income Tax or is not a Withholding Agent, you must pay the Article 15 Income Tax Payable yourself using the calculation formula above no later than the 15th day of the following month and file the Article 15 Income Tax Return no later than the 20th day of the following month.

If you charter a plane owned by an Individual Taxpayer, and you act as a Tax Withholding Agent, the following are to be considered:

1. Withhold Article 15 Income Tax at a rate of 1.8% of the gross income paid to the domestic airline;
2. Provide the withholding Article 15 Income Tax receipt to the domestic airline to be credited against their Annual Income Tax Return because the tax is non-final;
3. The gross income is calculated based on the charter agreement for transportation from Indonesian ports to other ports in Indonesia and from Indonesian ports to ports outside Indonesia. Thus, for transportation from ports outside Indonesia to ports in Indonesia, there will be no Article 15 Income Tax Payable;
4. Pay the withholding Article 15 Income Tax to the State Treasury no later than the 10th day of the following month using a billing code with MAP Code 411129 and Payment Type Code 101.