Capital gains tax in Indonesia

Does Indonesia have a separate capital gains tax?

Indonesia does not have a standalone capital-gains-tax regime. Under Law No. 36 of 2008 on Income Tax (Undang-Undang Pajak Penghasilan, as amended by the Harmonisation of Tax Regulations Law, UU HPP No. 7 of 2021), gains from the sale or transfer of assets are treated as ordinary income and are subject to the general progressive personal income tax (PPh) at rates of 5% up to IDR 60 million, 15% on IDR 60-250 million, 25% on IDR 250-500 million, 30% on IDR 500 million-5 billion, and 35% above IDR 5 billion. However, Article 4(2) of the Income Tax Law empowers the government to designate specific income streams as subject to a final (withholding) tax, which replaces progressive assessment entirely. Three asset classes in practice carry their own final-tax rules: listed shares, land and buildings, and unlisted shares (treated differently from listed ones). Understanding which rule governs a particular transaction is the starting point for any analysis. Consult a qualified tax professional for guidance on your specific circumstances.

How are gains on shares listed on the IDX taxed?

Sales of shares listed on the Indonesia Stock Exchange (Bursa Efek Indonesia, BEI/IDX) are subject to a 0.1% final income tax on gross transaction proceeds, collected at the point of sale by the stock exchange or the securities broker under Government Regulation No. 41 of 1994 as amended by Government Regulation No. 14 of 1997 (PP No. 14/1997). [1] The tax is levied on the full sale value, not the net gain; a seller who sells at a loss still pays 0.1% on the proceeds. Because the tax is final under Article 4(2) of the Income Tax Law, no additional income-tax liability arises on the same transaction, and there is no requirement to track acquisition cost or holding period for these shares. Founder shareholders who registered as owners before the IPO registration statement was filed with OJK (formerly Bapepam) face an additional 0.5% final tax on the fair-market value of their shares at the end of the year the company listed, under the same PP 14/1997 framework. Combined founder-share tax at disposal: 0.6% of sale proceeds plus 0.5% assessed at IPO-year closing value. [2] The 0.1% framework applies equally to resident individuals, resident corporations, and non-resident investors transacting through an Indonesian broker on the IDX.

How are gains on unlisted (private company) shares taxed?

Gains on shares in companies not listed on the IDX are not eligible for the 0.1% final-tax route. For resident individual sellers, the gain forms part of assessable income taxed at progressive PPh rates (5-35%). For resident corporate sellers, the gain is included in corporate taxable income (headline rate 22%). The DJP's guidance on OTC (over-the-counter) stock transactions confirms that Article 17 (progressive rates) governs resident taxpayers on unlisted-share disposals. [3] Non-resident sellers of unlisted Indonesian shares are subject to Article 26 withholding tax at 20% of the sale proceeds absent an applicable tax treaty; under many treaties (following the OECD Model) the source country retains the right to tax gains on shares where more than 50% of company value derives from Indonesian real property. Under PMK No. 90/PMK.03/2020 (business restructuring), qualifying intra-group transfers of assets including unlisted shares may be eligible for a tax-neutral treatment, but this is a narrow carve-out requiring advance DJP approval.

How are property gains taxed - land and buildings?

Transfers of rights over land and/or buildings (Pengalihan Hak Atas Tanah dan/atau Bangunan, PHTB) are subject to a 2.5% PPh Final on the gross transfer value under Government Regulation No. 34 of 2016 (PP No. 34/2016). [4] The rate applies to the full sale or transfer consideration regardless of the seller's cost basis or profit margin; selling at a loss provides no relief. The tax is a seller's obligation, administered through a notary or land-deed official (PPAT) who is required to verify payment before executing the deed. Developers whose primary business activity is property transfer and who sell qualifying simple houses (rumah sederhana) or simple apartments (rumah susun sederhana) meeting the criteria in PMK No. 81/2019 pay a reduced final rate of 1% under PMK No. 261/PMK.010/2016. The buyer separately owes Bea Perolehan Hak atas Tanah dan Bangunan (BPHTB), the land and building acquisition duty, at up to 5% of the taxable acquisition value (Nilai Perolehan Objek Pajak Kena Pajak, NPOPKP), collected by the regional government (kabupaten/kota). A non-taxable BPHTB threshold of IDR 80 million applies (IDR 300 million for inheritance). Certain transfers are exempt from the seller's PPh: transfers by low-income individuals where total value is below IDR 60 million and no instalment splitting has occurred; inheritances; and grants between direct-line family members, per PP No. 34/2016. Verification with a qualified tax professional is important for property transactions given the notary administration and regional BPHTB variation.

How are non-resident capital gains taxed?

Non-residents without a Permanent Establishment in Indonesia are subject to Article 26 of the Income Tax Law, which imposes a 20% withholding tax on Indonesian-source income, including gains from asset disposals. [5] The DJP's Article 26 guidance confirms this covers proceeds from share and asset sales. The effective mechanism for real property and unlisted shares is a withholding obligation on the Indonesian party (e.g., the buyer or the notary). For IDX-listed shares the 0.1% final rate applies to non-residents at the broker level, as noted above, rather than the 20% Article 26 rate. Where Indonesia has a tax treaty with the non-resident's country of domicile, the treaty capital-gains article may reduce or eliminate Indonesian taxation - for example, many treaties permit exclusive residence-country taxation of gains on shares that do not derive their value primarily from Indonesian real property. To access treaty rates, the non-resident must submit a valid Certificate of Domicile on the DGT Form (DGT-1 for beneficial owners, DGT-2 for certain categories) as required under PER-25/PJ/2018 and Ministry of Finance Regulation MoF-112/2025. Without a valid certificate, 20% applies as the default. Indonesia maintains more than 60 active tax treaties; treaty-position analysis requires review of the specific treaty text by a qualified tax professional.

For broader context on Indonesia's tax environment see the Indonesia country overview. For cross-border filing considerations between Indonesia and the United States see Indonesia tax treaty relief.

Capital-gains situations in Indonesia - especially those involving unlisted shares, property transactions, or non-resident status - involve multiple overlapping rules. A qualified tax professional with Indonesian PPh expertise can determine which regime applies, whether any exemption or treaty position is available, and how to document the transaction correctly for DJP compliance purposes.