As per the new Regulation No. 123/2015 issued in late December 2015, final withholding income tax rates have been reduced on interest received or earned from deposits, savings or Bank Indonesia (BI) Certificate discounts, provided that the source of funds is from exports and the funds are placed in banks established or domiciled in Indonesia, including overseas banks’ branch offices.
The final withholding income tax rates are now (if qualifying deposits are in IDR) 7.5%, for one-month deposits; 5% for three-month deposits; and 0% for more than six-month deposits. For all other deposits, the 20% final withholding income tax rate continues to apply.