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4.3. PE Force of Attraction Principle

Indonesia applies a limited force of attraction approach whereby non-resident taxpayers having a PE in Indonesia are liable for income/corporate tax in Indonesia in relation to the following:

  • Income from the business or activities and from property owned or controlled by the PE;
  • Head office income from business or activities, sales of goods, or furnishing services in Indonesia which are similar to those undertaken by the PE in Indonesia;
  • Any other income received or obtained by the head office, provided that there are effective relations between the PE and the assets or activities which give the income mentioned