balivillacareTaking profit out of a villa PT PMA: the dividend tax
Key takeaways
- A dividend paid to a shareholder who is not tax resident in Indonesia is withheld at 20% of the gross dividend, by the company, and final.
- That comes after the company's own income tax: 22% of profit, or 0.5% of turnover while PP 55/2022 applies.
- A tax treaty with the shareholder's country can lower the 20% for the beneficial owner. Treaties are not read here.
- For a resident individual, domestic dividends are exempt if reinvested in Indonesia for a set period.
- On closing the company, a payout above paid-up capital is a dividend for tax.
Owning a villa through a PT PMA puts two taxes between the villa's profit and the owner's bank account: the company's, and then the one on paying it out. Most villa guides stop at the first.
Seven words on a dividend
The terms of the income tax law on profit paid to shareholders.
| Term | What it is | What it means for the owner |
|---|---|---|
| Dividen | Dividend. | Profit paid out to shareholders, in any name or form. |
| PPh 26 | Withholding on payments to non-residents. | 20% of the gross dividend, withheld by the PT. |
| Wajib Pajak luar negeri | Non-resident taxpayer. | A foreign shareholder living outside Indonesia. |
| Beneficial owner | Who actually benefits from the income. | Decides which country's treaty applies. |
| P3B / tax treaty | Double taxation agreement. | Can set a lower rate than 20%; not read here. |
| Wajib Pajak dalam negeri | Resident taxpayer. | A shareholder who is tax resident in Indonesia. |
| Sisa hasil likuidasi | What is left on liquidation. | Above paid-up capital, it is a dividend. |
The 20% on a non-resident shareholder
The rule
UU PPh Pasal 26(1): dividends paid by a resident company to a non-resident taxpayer without a permanent establishment in Indonesia are withheld at 20% of the gross by the company. The withholding is final (Pasal 26(5)). The country of the non-resident is the country of the beneficial owner — whoever actually benefits from the income (Pasal 26(1a)).
The treaty
Indonesia's tax treaties can set a lower rate on dividends for residents of the other country. Which treaty, which rate and what the company needs on file to apply it were not read for this site; the domestic rate is the one that applies without them.
A resident shareholder
An owner who is tax resident in Indonesia is treated differently: domestic dividends received by a resident individual are not a tax object if invested in Indonesia for a certain period, and those received by a resident company are not taxed at all (Pasal 4(3)(f), as amended by UU 7/2021).
Planning how to take profit out?
Tell us which part of Bali the villa is in. Five questions, and your details are the last step.
Both layers, on one year's profit
An illustration of the arithmetic, not any company's figures: a PT PMA outside PP 55/2022, turnover under IDR 4.8 billion, with IDR 600,000,000 of taxable profit, paying out everything left to a non-resident shareholder with no treaty relief.
| Amount | Rule | |
|---|---|---|
| Taxable profit | IDR 600,000,000 | Revenue less deductible costs |
| Corporate income tax, 11% (22% halved, Pasal 31E) | IDR 66,000,000 | UU PPh Pasal 17, 31E |
| Available to distribute | IDR 534,000,000 | — |
| Dividend withholding, 20% | IDR 106,800,000 | UU PPh Pasal 26(1)(a) |
| Reaches the shareholder | IDR 427,200,000 | Before any tax at home |
Together the two layers take 28.8% of the profit in this example. A treaty rate below 20% changes only the fourth line. Tax in the shareholder's home country comes after, and this site cannot say how much.
Where the 10% and the 0.5% fit
If the company is within PP 55's three years it pays 0.5% of turnover instead of the 11% line, and the dividend withholding is unchanged. If it leases the villa to an operator instead of running it, the rent carries 10% final tax. Which company tax applies.
Money that is not a dividend: paid-up capital
A PT PMA's paid-up capital may not be moved out of the company's account for at least 12 months from deposit, except to buy assets, build or fund operations (Permeninves/BKPM 5/2025 Pasal 27). It is not a pool the owner can draw on as income.
Money that is a dividend: liquidation
When the company is wound up, what is repaid to shareholders above their paid-up capital is a dividend for income tax (elucidation of Pasal 4(1)(g)). Closing a villa PT PMA.
Comparing the routes
The owner of a villa held personally pays one layer of income tax on the villa's income. The owner of a villa held through a PT PMA pays two: the company's, and the 20% on the way out. That second layer is part of the cost of the structure, alongside its capital, its quarterly LKPM and its accounts, and it should be in any comparison of holding a villa through a company against the alternatives. How a foreigner can hold a villa, and what a PT PMA must file.
Timing matters as well. A dividend is withheld when it is paid, so profit left in the company is not yet taxed a second time — but it is also not the owner's. Retained profit is still inside the company when the company is closed, and comes out then as part of the liquidation payout, taxed the same way.
What this page does not cover
- Any tax treaty rate. Not read.
- Management fees or loans paid to a foreign shareholder. Also Pasal 26, at different bases; not worked here.
- Tax in the shareholder's country. Outside Indonesian law.
Common questions
What is the dividend tax for a foreign shareholder of a PT PMA?
20% of the gross dividend, withheld by the company when it pays (UU PPh Pasal 26(1)(a)), and final. A tax treaty between Indonesia and the shareholder's country can set a lower rate for the beneficial owner; no treaty was read for this page.
Is the dividend taxed on top of the company's income tax?
Yes. The company first pays its own income tax — 22% of profit, or 0.5% of turnover under PP 55/2022 — and the dividend paid out of what is left is then withheld at 20% for a non-resident shareholder.
Are dividends tax-free if reinvested?
For a resident individual shareholder, domestic dividends invested in Indonesia for a certain period are not a tax object (UU PPh Pasal 4(3)(f), as amended by UU 7/2021). That exemption is for residents; the 20% withholding on non-residents is in Pasal 26.
Is money paid out on closing the company a dividend?
The part of a liquidation payout above the paid-up capital is a dividend for income tax (elucidation of Pasal 4(1)(g)).
Can the PT just repay me instead?
The paid-up capital of a PT PMA may not leave the company's account for 12 months from deposit except to buy assets, build or operate (Permeninves/BKPM 5/2025 Pasal 27). How repayments of capital or loans are treated is a question for an adviser.
Sources cited on this page
- UU No. 36 Tahun 2008 — income tax law, Pasal 26
- UU No. 7 Tahun 2021 (HPP) — Pasal 4 and the KUP amendments
- UU No. 40 Tahun 2007 — limited companies, Pasal 142-152
- Permeninves/BKPM No. 5 Tahun 2025 — Pasal 26-27, 373-376
Every figure above links to the source it was read from. This page was last changed on 3 October 2026. How we check this.