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Article 24 of Income Tax Law stipulates that tax paid or payable in foreign countries upon income from abroad received or obtained by a resident taxpayer may be credited against income in the same fiscal year. It is mentioned that the amount of tax credit is in the same amount with income tax paid or payable in foreign jurisdictions but shall not exceed tax payable in Indonesia.

Effective 21 February 2022, taxpayers engaged in construction related activities cannot claim foreign tax credit on taxes paid or payable outside Indonesia on foreign income.

The Income Tax Law prohibits any foreign losses to be credited in Indonesia.