Living in Indonesia, especially Bali, is a dream. However, if there’s one thing that might deter you, it’s the tax paperwork, as that’s where the headache usually starts. On top of that, Indonesia has introduced new tax residency rules in Bali 2026, which leaves no room for any doubt when it comes to your residency status.
With this new regulation, Indonesia intends to sync everything (Tax, Business Licenses, and Immigration), to ensure that everyone is playing by the same administrative rules and following laws to a T. Here’s the breakdown of how the game has changed when it comes to taxes in Indonesia.
Do Foreign Nationals Pay Tax in Indonesia?
The short answer is yes. You need to pay taxes if you meet certain criteria to be classified as taxpayers. Basically, the Indonesian taxation system differentiates between non-resident and resident taxpayers in the following manner:
- Resident Taxpayers: Individuals who are staying in the country for over 183 days in a 12-month time period, or individuals who intend to continue residing in Indonesia.
- Non-Resident Taxpayers: Individuals who don’t meet the above criteria, but rather earn income from Indonesia. If you’re a non-resident, you will be taxed at a flat rate of 20% on your gross income that comes specifically from Indonesian sources. This includes income from business conducted within the country, services, employment, as well as interest, dividends, and royalties that an Indonesian entity pays for.
The new PER-23/PJ/2025 regulation adds another layer to these definitions. The Indonesian tax authority now looks at how an individual or company actually lives and works. It’s a more fact-based assessment of where a taxpaying individual’s economic and personal life is centered, rather than simply relying only on the 183-day count. The new rules use two important concepts, while also keeping the tax residency Bali 183 day rule in place:
- Subjek Pajak Dalam Negeri (SPDN) — Indonesian tax-paying resident, which means that you need to pay tax on any income you receive from across the world, including income from abroad.
- Subjek Pajak Luar Negeri (SPLN) — Tax-paying non-resident in Indonesia, where you pay tax only on income you receive from sources within Indonesia.
Prior to this, many people relied on formal indicators, including type of visa, citizenship, lack of registration, or simply the statement “I’m just living in Bali.” However, according to the new PER-23/PJ/2025 regulations, these aren’t sufficient anymore. You need to understand the status you hold in line with the new rules and whether you might be automatically deemed a tax resident.
Your SPLN or SPDN status decides:
- The amount you need to pay as taxes
- The risk of audits and reassessments
- Whether or not double tax avoidance agreements (P3B) apply
- The need to declare worldwide income
Indonesia Tax Residency Test for Expats
So, when do foreigners become tax resident in Indonesia?
When you’re deemed a tax-paying resident (SPDN)
According to the country’s tax authority, you are a tax-paying resident of Indonesia if you meet one of these following criteria at the minimum.
a. Staying for more than 183 days: If you’re staying in Indonesia for longer than 183 days consecutively or in breaks in the period of any 12 months (it doesn’t need to be a calendar year necessarily).
b. Permanent residence in Indonesia: If you actually live in Bali, or rather anywhere in Indonesia, and are not just visiting as a tourist.
c. Intent to stay for long in Indonesia: Despite not reaching the limit of 183 days of stay, you could possibly get SPDN status if the tax authority deems that you intend to stay in Indonesia permanently – as mentioned earlier, intent is important. In such cases, the Indonesian tax authority evaluates the actual situation and take the following aspects into account:
- The duration and type of your visa, including KITAP and KITAS
- Whether you have family present in Indonesia
- Your place of business or main work
- Whether you’re leasing or own any property
- Your long-term residency (no indications of tourism)
The basic fact of the matter is that the registration data independently isn’t enough. The Indonesian tax authority assesses the actual situation and your intent.
When you’re deemed a non-resident (SPLN)
The good news is that Indonesian tax authority doesn’t automatically recognize everyone as an Indonesian tax-paying resident. You’ll be applicable for an SPLN status (non-resident taxpayer) if you have a strong link with another country. You will usually be considered as having an SPLN status if:
- a. Your tax residency is confirmed in another state
- b. The center of your life and/or economic and financial interests lie abroad
- c. You conduct actual work activity outside Indonesia
Simply put, if your main income, business, work, and tax life don’t lie within Indonesia, then you might be able to argue maintaining an SPLN status.
Bali Tax Residency Rules 2026: The Importance of the Residency Status
Tax Residency Bali “183 Day” Rule
An important thing you need to know is that the ground rule hasn’t changed. However, its enforcement has. So, if you spend longer than 183 days, consecutively or in breaks, in the country within any 12-month period (and not necessarily a calendar year), then you officially become a Tax-Paying Resident or a Domestic Taxpayer (SPDN). With the Indonesian tax office now syncing all data directly with Immigration, they not only know exactly when you landed but also when you left (or didn’t). The day you hit day no. 184 on your residency status, the system will automatically flag you as a tax-paying resident.
Read more in Can You Live in Bali Tax-Free: The Bali 183 Day Tax Rule Explained.
The KITAS Factor
Under the new Indonesia tax rules, if you enter the country with a KITAS (Stay/Work Permit) or a long-term contract, then the Indonesian tax office will consider you a tax-paying resident right from the day you land in the country.
- When the old rule was in place, people would argue their intent was not to stay
- With the new rule in place, your visa and/or your work/business contract becomes your intent automatically. There’s no room for any doubts or arguments
Remote Workers and Digital Nomads
If you think you don’t have to pay tax because your boss is sitting in New York, then think again. The Bali digital nomad tax residency rule is clear: no matter where your boss, team, or office is based, if you physically stay in Indonesia for more than 183 days, then you are technically considered a tax-paying resident. The new law makes it very clear that that physical presence is what matters. So, if you’re using Indonesian beaches, cafes, electricity, internet, and general infrastructure for half of the year, then the Indonesian tax office expects you to pay tax.
Read more about this on All About Bali Digital Nomad Tax Residency Rules 2026.
What Should You Do?
- Keep track of your days, your entry date, and your date of exit.
- If you’re a resident, then getting an Indonesian Tax ID (or also known as NPWP) makes your life a whole lot easier (and also avoids higher tax rates)
- Keep the “Double Tax” Treaty in mind, as Indonesia has agreements in place with more than 70 countries. So, make sure that if your country is on that list, you don’t end up paying taxes twice
The goal of the Indonesian tax authority is to remove gray areas and ensure complete transparency for all travelers and long-term residents of Bali, or rather Indonesia. To sum up, ensure that your records are on the up and up, keep your documents organized, and follow the rules.
