Do You Need an NPWP (Tax ID)? Tax Rules for Residents and Tourists

Do You Need a Tax ID in Indonesia (NPWP)? Obligations for Residents, Expats, and Tourists

Indonesia continues to modernize its taxation system. As of July 2024, a new 16-digit Tax Identification Number (NPWP) format is in effect, and it is mandatory for tax residents of the country. In this article, we’ll cover:

who is required to register for an NPWP;
what the consequences are of not having one;
how foreign nationals living and working in Indonesia are taxed;
whether tourists—especially on Bali—have any tax obligations.

What Is the Indonesian NPWP and Why Do You Need It?

NPWP (Nomor Pokok Wajib Pajak) is an individual Tax Identification Number issued by the Directorate General of Taxes (Direktorat Jenderal Pajak). It is required for:

filing annual tax returns (SPT Tahunan);
applying for tax allowances and deductions;
running a legal business operation;
opening certain types of bank accounts;
official employment in Indonesia.

New Format from July 2024

Since July 1, 2024, the updated NPWP format now consists of 16 digits. Without the new version, taxpayers may face technical limitations such as difficulties in filing tax returns, registering a company, or accessing e-tax services.

Source: MAM Corporate Solutions

Who Needs to Get an NPWP?

Not all foreigners are required to obtain a Tax Identification Number. The obligation depends on your tax residency status and the duration of your stay in Indonesia.

Tax Residents of Indonesia

According to Indonesian tax law, a resident is defined as:

an Indonesian citizen;
a foreign national who resides in Indonesia for more than 183 days within a 12-month period;
a foreigner who lives in Indonesia for a shorter period but has economic, business, or family ties that indicate a center of vital interests in the country.

If you are considered a tax resident and earn taxable income, you are obligated to obtain an NPWP.

Note: The non-taxable income threshold (PTKP) is revised annually. In 2025, it stands at approximately IDR 54 million (~USD 3,450) per year for individuals. If your income exceeds this threshold, you must register with the tax system.

What Income Is Taxable?

Residents are subject to worldwide income taxation. This includes:

income from local employment;
profits from running a business in Indonesia;
rental income and proceeds from asset sales;
dividends, interest, and investment income earned overseas.

Foreign nationals living in Indonesia on long-term visas (KITAS, KITAP, Second Home Visa) and working remotely may also fall under tax residency. In such cases, the obligation to register and pay taxes may arise even if they are paid by a company outside Indonesia. However, this depends on a range of factors, including the origin of the income and the existence of Double Taxation Agreements.

Source: LMI Consultancy

Expats with Work or Long-Term Visas

If you work or run a business in Indonesia while holding a KITAS, KITAP, or Second Home Visa, you are required to register with the tax office and obtain an NPWP. This applies to:

employees of Indonesian or international companies based in the country;
business owners and joint-venture partners;
independent consultants residing full-time in Indonesia.

Source: Celerity

How to Obtain an NPWP

The registration process involves these steps:

Sign up online via the e-Registration portal of the tax authority;
Complete the form with passport details, visa status, and local address;
Upload copies of your passport, visa, and documentation proving your tax status (e.g., KITAS or employment contract);
Wait for your NPWP to be issued and activated in the system.

The process typically takes 1–3 business days, including verification.

What Happens If You Don’t Have an NPWP?

While not every foreigner is legally required to have an NPWP, the absence of one can lead to administrative and financial drawbacks:

If you receive income—such as rent or a salary—without a registered NPWP, the tax is withheld at a 20% higher rate than the standard;
You cannot file tax returns electronically;
You are ineligible for tax deductions or benefits;
You cannot register a company (e.g., PT PMA) or operate a legal business.

Taxes for Tourists in Bali and Indonesia

Do Tourists Need an NPWP?

If you’re visiting Indonesia on a short-term visa (e.g., Visa on Arrival, e-tourist visa), you’re not considered a tax resident. Therefore, you are not required to register with the tax office or obtain an NPWP.

Bali Tourist Levy — Tax for Foreign Visitors

Since February 2024, Bali has implemented a mandatory tourist tax for foreign visitors:

Amount: IDR 150,000 (~USD 10);
One-time payment, either online before arrival or upon entry;
Applies for the entire stay, regardless of duration.

The levy supports cultural preservation and infrastructure development on the island.

Exemptions: Holders of diplomatic and certain other visa categories are exempt.

Sources:
IniVie,
InCorp Indonesia

Conclusion: Who Needs to Get a Tax Number?

Here’s a summary:

Tourists visiting Indonesia short-term (up to 60 days) do not need an NPWP but must pay the Bali tourist levy.
Foreigners residing in Indonesia for more than 183 days or earning income from Indonesian sources must register with the tax office.
Entrepreneurs, company owners, and investors—including those setting up a PT PMA—are also required to obtain an NPWP.

Starting 2025, Indonesia’s tax system is becoming more transparent and digitized. If you meet the criteria for residency or receive ongoing income, don’t delay: securing your NPWP is essential for legal living and doing business in the country.


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