Bali Rental Income Tax for Foreign Owners
How is a Bali rental taxed for a foreign owner? Non-residents face 20 percent PPh 26 on gross rent. A PT PMA pays 22 percent corporate tax on net profit.
What tax do foreign property owners pay on a Bali rental? Two main lines apply. If you hold the villa in your own name as a non-resident, Indonesia withholds 20 percent of the gross rent under Article 26 of the income tax law, known as PPh 26. If you hold the property through a PT PMA company instead, the company pays 22 percent corporate income tax on net profit and you take the cash out as a dividend.
If you become an Indonesian tax resident, by spending 183 days or more in any 12 month period, the rule shifts to PPh Pasal 4 ayat 2, a 10 percent final tax on the gross rent from land and buildings. The legal basis is Government Regulation 34/2017.
Short-term holiday rental also pulls in a local tax, PHR, charged by the regency at up to 10 percent of accommodation revenue. The annual property tax, PBB (Pajak Bumi dan Bangunan), is set as a small percent of the government-assessed value, known as the NJOP. Rates vary by regency and generally sit in a 0.1 to 0.5 percent band on the taxable base. The Directorate General of Taxes covers the framework on its PBB page.
Repatriating rental income from Indonesia is routine when the paperwork is clean. PT PMA dividends paid to a foreign shareholder carry a 20 percent withholding tax under PPh 26, often reduced under a treaty if you provide a Certificate of Domicile. The company must also file quarterly LKPM reports to BKPM as a condition of operating and remitting profit. For a US owner the cleared funds land in your home account in USD. For a Dubai-based owner the UAE does not tax personal income, so once the Indonesian side is settled the receipt is clean.
One practical comparison. A Dubai freehold throws off rent in your own name with no local income tax. A Bali villa pays Indonesian tax first, then the after-tax cash comes home. None of this is tax advice, so confirm your position with a qualified Indonesian tax adviser and the OMA Townhouse team before you commit. The same routes are covered in our guide for foreign buyers.
Frequently asked questions
How is rental income taxed for foreigners in Indonesia?
Non-residents face a 20 percent withholding tax on gross rent under Article 26 (PPh 26). Indonesian tax residents pay a 10 percent final tax on gross rent from land and buildings under PPh Pasal 4 ayat 2. A PT PMA holds the asset as a company and pays 22 percent corporate income tax on net profit instead.
Can a US or UAE owner repatriate Bali rental income?
Yes. PT PMA profits and dividends can be transferred abroad once Indonesian tax is settled and quarterly LKPM reports are filed with BKPM. Dividends to a foreign shareholder carry a 20 percent withholding tax, sometimes reduced under a tax treaty if a Certificate of Domicile is provided.
Is there annual property tax (PBB) in Bali?
Yes. PBB (Pajak Bumi dan Bangunan) is the annual land and building tax. Rates depend on the regency and the government-assessed value (NJOP), generally falling in a 0.1 to 0.5 percent band on the taxable base.
Sources
This article is general information, not financial, legal or tax advice. Any yield, price or appreciation figures are ranges and not guarantees. Confirm current pricing, ownership structures and regulations with the OMA Townhouse team and a qualified adviser before you commit.