Understanding Tax Identification Numbers (NPWP)

The Nomor Pendaftaran Wajib Pajak (NPWP) is a mandatory 15-digit identification tax number in Indonesia, enabling organisations to pay their employees’ taxes under a single NPWP. Consequently, every individual living in Indonesia, including expatriates, is required by the tax office to possess their own NPWP. The NPWP ensures that individuals pay income tax monthly, file annual taxes, and pay tax for income acquired outside the country.

Individuals eligible for NPWP registration include those earning above the non-taxable income rate, earning income outside their gross salary, and receiving income from self-employment, business activities, and capital. Expatriates staying in Indonesia for over 183 days within 12 months or planning to live there must also register. Dependents are included under the spouse’s tax number and are not given independent numbers.

Registration is conducted at the Tax Service Office in the resident’s city. Required documents include a completed registration form, passport photocopy, work permit, employer’s domicile certificate, employer’s NPWP copy, and an authorisation letter for tax representatives.

Payments are due within the first 15 days of the month after registration, and reports should be submitted by the 20th of the same month. According to the Indonesian tax office, non-compliance may result in up to six years of imprisonment and a fine quadruple the total tax due.