Indonesia's Directorate General of Taxation enacted Regulation PER-23/PJ/2025 on 9 December 2025, defining tax residents as those present for over 183 days within 12 months and requiring Indonesian citizens abroad to prove permanent residency elsewhere and settle tax obligations before qualifying as foreign tax subjects under the new framework aligned with the Job Creation Law.
Indonesia’s Directorate General of Taxation (DJP) issued Regulation PER-23/PJ/2025, which was enacted on 9 December 2025, establishing the specific criteria for identifying domestic and foreign tax subjects. It defines domestic subjects as individuals residing in Indonesia for over 183 days within a year or entities established within the country’s legal jurisdiction.
This regulation replaces older rules (PER-2/PJ/2009 and PER-43/PJ/2011) to provide better legal certainty and align with current laws, including the Job Creation Law.
Foreign tax subjects include non-residents and Indonesian citizens living abroad who meet strict permanent residency and social connectivity requirements. The document outlines a tiered verification process involving domicile certificates and evidence of primary interests to prevent tax evasion and resolve dual-residency issues.
By introducing these updated rules, the government aims to provide legal certainty for taxpayers while aligning with the latest Job Creation Law and international tax agreements. This regulation effectively replaces previous mandates to ensure a more robust framework for managing income tax obligations in a global context.
The following details the criteria for determining tax subjects under these updated regulations:
Domestic tax subjects (SPDN)
A domestic tax subject can be an individual, an entity, or an undistributed estate.
- Individuals: Both Indonesian Citizens (WNI) and Foreign Citizens (WNA) are considered SPDN if they meet any of the following:
- They reside in Indonesia.
- They have been present in Indonesia for more than 183 days within a 12-month period.
- They are in Indonesia during a tax year and have the intent to reside there. This intent can be proven through documents such as a Permanent Stay Permit Card (KITAP), a Limited Stay Visa/Permit (VITAS/ITAS) valid for >183 days, or a work/lease contract for >183 days.
- Entities: An entity is an SPDN if it is established or domiciled in Indonesia.
- Domicile is determined by the actual circumstances, such as the location of the head office, administrative centre, or where strategic management and control (e.g., investment and operational decisions) take place.
- Undistributed estates: These are treated as a single unit, replacing the rightful heirs.
Foreign tax subjects (SPLN)
An SPLN is an individual or entity that receives income from Indonesia but does not meet the SPDN criteria.
- Individuals:
- Individuals who do not reside in Indonesia.
- WNA present in Indonesia for no more than 183 days within a 12-month period.
- WNI residing outside Indonesia for more than 183 days within a 12-month period.
- Entities: Entities that are neither established nor domiciled in Indonesia.
Specific requirements for Indonesian citizens (WNI) to be classified as foreign tax subjects (SPLN)
For Indonesian citizens to be recognised as a foreign tax subject, they must meet a set of hierarchical criteria and administrative requirements:
- Hierarchical criteria: An individual’s tax residence status is determined through three sequential tests: first, having a permanent home outside Indonesia; second, if inconclusive, examining where their primary personal, economic, and social connections lie (family, income, memberships); and third, if still unclear, identifying where they conduct daily activities and hobbies.
- Administrative proof: To qualify as a foreign tax resident (SPLN), individuals must provide an English-language Certificate of Domicile from their new country’s tax authority, settle all Indonesian tax liabilities from their previous resident period, and obtain formal confirmation from Indonesia’s Director General of Taxes verifying they meet SPLN requirements.
Key administrative and legal provisions
Indonesian citizens (WNI) achieving foreign tax resident (SPLN) status are treated as permanent departures effective from their date of exit, with subsequent Indonesian-sourced income taxed under foreign tax subject rules. In cases of dual tax residency between Indonesia and a treaty partner country, the applicable Double Taxation Avoidance Agreement determines the final residency status.
