Thinking about living in Bali long term? Whether you’re a digital nomad, remote worker, retiree, or business professional, understanding taxes in Indonesia is essential. This guide explains who must pay taxes, how residency works, and what expats should know before settling in Bali.

Bali continues to attract international residents seeking lifestyle, business opportunities, and long-term stays. However, one common question remains: do expats need to pay taxes in Bali?

The answer depends mainly on your residency status, income source, and length of stay in Indonesia. Here’s a simple guide to help you understand how the Indonesian tax system works.

1. Tax Residency in Indonesia (183-Day Rule)

Indonesia determines tax obligations based on how long you stay in the country. You are considered a tax resident if:

  • You stay in Indonesia for more than 183 days within a 12-month period, OR

  • You reside in Indonesia during a tax year and show intention to live permanently in Indonesia.

If you become a tax resident:

  •  You must report worldwide income (global taxation).

  •  You must obtain a tax number (NPWP).

  •  You follow Indonesia’s progressive income tax rates.

If you stay less than 183 days, you are typically treated as a non-resident taxpayer, meaning you pay tax only on income sourced from within Indonesia, often via a flat withholding tax.

2. Income That May Be Taxable

Expats in Bali may need to pay taxes depending on where their income is generated. Generally, taxable income includes:

  • Salary from an Indonesian company.

  • Business income earned from operations in Indonesia.

  • Consulting or freelance work performed locally.

  • Rental or property income from Indonesian assets.

  • Indonesian investment dividends or interest.

Note: Some foreign-sourced income may receive special treatment depending on specific regulations (like the "territorial" provision for certain skills) and international tax treaties.

3. Indonesia’s Progressive Tax Rates

Indonesia applies progressive personal income tax rates for residents. While subject to policy changes, the general brackets are:

  • 5% — For the lowest income bracket.

  • 15% — Middle income.

  • 25% – 35% — Higher income levels.

4. Double Taxation Agreements (DTA)

Indonesia has agreements with many countries to prevent expats from being taxed twice on the same income. These agreements may allow for:

  • Tax credits in your home country.

  • Reduced withholding tax rates.

  • Exemptions on certain types of income.

5. Do Digital Nomads Pay Tax in Bali?

This depends on your stay duration and work structure:

  • Short stays with foreign income: Often not taxed locally if under 183 days.

  • Long stays exceeding 183 days: May trigger tax residency, requiring a report of global income.

  • Working for Indonesian clients: Usually taxable regardless of stay length.

6. NPWP (Indonesian Tax Number)

Foreign residents who work or run businesses in Indonesia typically need:

  • NPWP (Nomor Pokok Wajib Pajak): Your unique Indonesian tax ID.

  • Annual tax reporting obligations: Filing a tax return (SPT) once a year.

7. Why Understanding Taxes Matters

Understanding your obligations helps you:

  1. Avoid heavy penalties or legal compliance issues.

  2. Plan your financial budget accurately.

  3. Choose the correct visa or stay structure (KITAS/KITAP).

8. Official Government Tax Offices (KPP)

To apply for your tax ID (NPWP) or file reports yourself, visit the Kantor Pelayanan Pajak (KPP) covering your area:

  • Denpasar/Sanur: * KPP Pratama Denpasar Timur: Jl. Kapten Tantular No. 4, Renon.

    • KPP Pratama Denpasar Barat: Jl. Raya Puputan No. 13, Renon.

  • Badung (Canggu, Seminyak, Kuta, Uluwatu): * KPP Pratama Badung Selatan: Located in Renon, this office handles the major southern expat hubs.

  • Gianyar (Ubud): * KP2KP Ubud: Jl. Raya Teges, Gianyar.

9. Professional Tax Consultants (Recommended)

Most expats use private consultants to "make the taxes" (calculate and file) to avoid language barriers and complex paperwork.

Name

Location

Specialty

Salim & Co

Denpasar/Global

Highly rated for foreign-owned businesses and individual tax planning.

LMI Consultancy

Seminyak & Canggu

A popular "one-stop shop" for KITAS, NPWP, and monthly reporting.

Tax-Indo

Seminyak

Specialists in international accounting and compliance.

InCorp Indonesia

Badung/Denpasar

Large agency for corporate tax and complex financial structures.


10. Online (Self-Service)

If you have an EFIN (Electronic Filing ID), you can file your annual return (SPT) at pajak.go.id.

 Essential Documents to Bring

When visiting a tax office or consultant, ensure you have:

  • Passport (Original and copy).

  • KITAS/KITAP (Your stay permit).

  • Domicile Letter (From your local Banjar or village office).

  • Work Contract (If employed by an Indonesian company).

Conclusion

Yes, expats may need to pay taxes in Bali depending on residency status, income source, and duration of stay. Indonesia’s tax system is structured but manageable when understood early, making preparation essential for anyone planning a longer life in Bali.

Kibarer Property Navigating life in Bali involves more than just choosing where to live understanding regulations, lifestyle considerations, and local requirements is key. The team at Kibarer Property shares insights and practical guides to help international residents better understand living in Bali. Explore more updates and local information to support your Bali journey.