Tax on villa rental income

Two Indonesian charges land on a let villa. One of them is charged on revenue rather than profit, and that is the one that breaks people's models.

How to read the numbers on this page. A figure with no marker is quoted from a primary source and linked at the foot of the page. ^reported means the company that charges it publishes no public rate card, so the range comes from trade reporting rather than from the charging party. ^modelled means it came out of the model set out on the methodology page, which you can disagree with line by line.

Charge 1: regional accommodation tax

Indonesia's regional tax on certain goods and services, Pajak Barang dan Jasa Tertentu, covers accommodation services. Pasal 58 ayat (1) of UU No. 1 Tahun 2022 sets the rate at not more than 10%, and leaves each regency or city to fix the rate in force by local regulation. In Badung, Gianyar and Denpasar — between them, effectively all of the villa market — it sits at the ceiling.

What the law covers is broad and deliberately so: hotels, hostels, villas, guest houses, glamping, and private residences functioning as hotels. The classification your villa holds is not what triggers it. What triggers it is supplying the accommodation service.

The line almost nobody writes down

The explanatory memorandum to Pasal 54 ayat (1) says that where a private residence is let as accommodation for more than one month, it is not an object of this tax.

Nothing about the building changes. Nothing about who owns it changes. The length of the booking changes, and the charge stops applying. On USD 10,000 of gross that is USD 1,000 of difference before anything else moves, and several other things do move with it — which is why it has a page of its own: long-term letting against nightly.

Charge 2: final income tax on the rent

PP No. 34 Tahun 2017 charges income tax under Article 4(2) on income from letting land and buildings, at 10%, on the gross rental amount. The charge is final: not reduced by expenses, not offset against losses, not recomputed when the year is totalled.

Owners who have modelled a rental property at home tend to assume tax follows profit, and the two arrangements behave completely differently when a year goes badly. On profit-based tax, a thin year costs less tax. On a final charge against gross, a thin year costs the same tax as a good one relative to revenue — so a season that only just covered costs ends up below water after tax rather than level with it.

Who withholds it depends on who is paying the rent. Where the payer is a business entity or another party required to withhold, they deduct and remit it. Where the payer is an ordinary individual, the property owner pays it themselves. In a managed-villa arrangement, who does this in practice is a contract question, and a contract that does not answer it has not removed the liability from anyone.

What this does to the walk

Here is the model on USD 10,000 of gross booking revenue, with the two Indonesian charges as their own lines:

Between them, the accommodation tax and the final income tax take USD 1,900 of USD 10,000, which is more than the management commission of USD 1,800. Owners argue about the second and budget for the first two by accident.

Charge 3, which is not yours: the tourist levy

Perda Provinsi Bali No. 6 Tahun 2023 introduced a levy on foreign visitors of IDR 150,000 per foreign visitor, collected since February 2024 through the provincial payment system. It is charged per person per visit — not per booking, not per night — and children pay it.

It does not touch your statement and it is not deducted from your rate. It is worth knowing about for one reason only: it comes out of the same trip budget that your nightly rate is competing for, alongside the visa, the transfers and everything else a guest pays before they have paid you anything. Treat it as context rather than as a cost.

What this page deliberately does not tell you

Whether VAT reaches your arrangement, what your PT PMA owes on its profit, how a non-resident withholding interacts with your treaty, what your obligations are at home, and how any of it changes if your villa is held through a structure rather than directly. Those answers depend on documents this page has not seen, and the pattern in this market is sites that answer them anyway with a confident number and no source.

What this page does tell you is which regulations set the two charges that definitely apply to a let villa, what base each is charged on, and where to read them. That is enough to check whether the figures on your statement are the right shape, and enough to ask a licensed adviser a specific question instead of an open one.

Common questions