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Tax Regulations for A Foundation in Indonesia

Non-profit organizations in Indonesia are subject to Income Tax. However, there are exceptions. Income is tax-exempt in case:

  • Foundation uses income to provide scholarship funds

  • Income of a foundation working in the area of education or research and development that is re-invested in its work (according to the timing requirements of the Income Tax law)

Though taxes do not apply to donations, keeping in mind there is no business or ownership between parties involved. As foundation is a legal entity, you must withhold some of it from third parties, which include:

  • Employees

  • Vendors

Withholding Tax

2 % withholding tax for all services expenses

For example:

  • Consultant services

  • Engineering services

  • Internet services

  • Leasing asset

Final Tax depending on chosen service

  • 10 % withholding tax is applicable to the transaction when renting a building, land or room.

  • 5 % tax when purchasing the building or the land

Additional Tax

  • Tax will be applicable to transactions like payroll or giving earnings to an individual

  • Tax Rate ranges from 5 % – 30 % depending on the amount of salary or earnings

For further discussions leading to solutions, reach out to VIVO ASIA. Set up a meeting and let’s talk about your ideas of building a foundation.


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