New Tax Subject Regulations Released: What Expats and the Indonesian Diaspora Need to Know

The Directorate General of Taxes (DGT) has released new regulations regarding the determination of domestic and foreign tax subjects. Understanding these provisions is crucial, particularly for the Indonesian diaspora living abroad and expatriates (foreign citizens) residing in Indonesia.

The regulation is the Directorate General of Taxes Regulation Number PER-23/PJ/2025. Effective as of December 9, 2025, this rule revokes two previous regulations: PER-02/PJ/2009 and PER-43/PJ/2011.

Compared to its predecessors, PER-23/PJ/2025 provides more comprehensive and detailed guidelines, including specific examples for determining taxpayer status based on their presence in Indonesia. Furthermore, this latest DGT regulation clarifies the taxpayer status of domestic tax subjects upon receiving income in Indonesia.

The DGT issued PER-23/PJ/2025 to align with the Job Creation Law and its derivative regulation, Ministry of Finance Regulation (PMK) Number 18/PMK.03/2021.

Domestic Tax Subjects

Under this policy, domestic tax subjects refer to individuals or entities that meet specific criteria.

Individual Domestic Tax Subjects

Individual domestic tax subjects include both Indonesian citizens and foreign citizens who meet three criteria. 

These three criteria are: residing in Indonesia, being present in Indonesia for more than 183 days, or being present in Indonesia within a tax year, and intending to reside in Indonesia.

1. Residing in Indonesia

This refers to individuals settled in a location in Indonesia. This place can be controlled (used daily), owned, rented, or available for use, excluding temporary stopovers.

Residing in Indonesia can also mean that the individual’s primary activities, whether personal, social, economic, or financial, take place in Indonesia. It can even apply to someone who habitually carries out hobbies or interests in the country.

2. Presence in Indonesia for more than 183 days 

This requires physical presence in Indonesia. The 183-day period is calculated based on the total duration spent in Indonesia within a 12-month or one-year period.

This duration is calculated cumulatively, meaning the days do not have to be consecutive. Even if an individual leaves the country during the year, they are considered a domestic tax subject if their total presence exceeds 183 days.

3. Presence in Indonesia during a tax year with the intent to reside 

The intent to reside in Indonesia can be demonstrated by the following documents:

1. Permanent Stay Permit Card (KITAP)
2. Limited Stay Visa (VITAS) with a validity of more than 183 days
3. Limited Stay Permit (ITAS) with a validity of more than 183 days
4. Contracts or agreements to work, conduct business, or perform activities in Indonesia for more than 183 days
5. Other documents showing intent to stay, such as residential lease agreements for more than 183 days or documents showing the relocation of family members.

Corporate Domestic Tax Subjects

Entities classified as domestic tax subjects are those established, registered, or located within Indonesian territory based on applicable Indonesian laws.

Additionally, an entity is considered a domestic tax subject if its center of management and control is located in Indonesia for making strategic policies or decisions regarding investments and operations. Examples of strategic policies include:

1. Deciding on the transfer of shares, assets in exchange for shares, or capital participation.
2. Deciding on the transfer or utilization of strategic assets.
3. Appointing or dismissing management, employees, or agents with the power to conduct operations.
4. Supervision and control over dividend distributions.

Entities that become domestic tax subjects are considered taxpayers from the moment they are established in Indonesia. Permanent Establishments (BUT) are not included in the category of domestic tax subjects.

Foreign Tax Subjects

The definition of foreign tax subjects includes individuals and entities that meet a number of criteria.

Individual Foreign Tax Subjects

The criteria for individuals as individual foreign tax subjects are:

1. Not residing in Indonesia.
2. Foreign citizens present in Indonesia for no more than 183 days.
3. Indonesian citizens (WNI) present outside of Indonesia for more than 183 days. Having a place to conduct daily activities outside Indonesia.
4. Becoming a domestic tax subject outside Indonesia.
5. Meeting other requirements.

Provisions for Indonesian Citizens Living Abroad

Regarding Indonesian citizens who live for more than 183 days outside Indonesia, this can be fulfilled if they meet several requirements. First, residing permanently abroad.

Second, having primary activities, whether related to personal, economic, or social activities, conducted outside Indonesia.

Such activities are evidenced by a husband, wife, children, or immediate family living outside Indonesia, having a source of income outside Indonesia, or being a member of a religious, educational, social, or community organization recognized by the local government.

Provisions for Becoming a Tax Subject Abroad

Proof of a person becoming a tax subject in another country can be evidenced by a certificate of domicile or other documents showing the status of a tax subject in a country.

The document must at least meet the following requirements:

• Written in English.
• Include the name of the Indonesian citizen, date of issuance, and validity period.
• Include the name and signature of the authorized official in that country.

Other Specific Requirements for Foreign Tax Subjects

Within this regulation, the DGT sets two other specific requirements for a foreign tax subject. First, having settled Income Tax obligations owed while serving as a domestic tax subject.

Second, having obtained a Certificate of Indonesian Citizen meeting the requirements as a foreign tax subject from the DGT. (ASP/KEN)