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6.1. Main Rules Governing the Determination of Taxable Income

Article 6 of the Income Tax Law mentions the amount of taxable income for resident taxpayers, including PEs of non-resident companies, shall be determined based on gross income after the deduction of expenses incurred in order to obtain, collect, and maintain the income. Unlike residents and PE taxpayers, non-resident taxpayers are not entitled to claim any deduction (but are taxable on a net estimate for certain types of income).

Taxable income of resident and non-resident taxpayers with a PE in Indonesia is determined starting from the profit and loss result of the financial statements, which is subject to the adjustment required by article 9 of the Income Tax Law.