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  • Freelance Question. I am Indonesian work for SG

    Hi guys,

    Thanks for reading and thanks your time.
    I recently graduated from one of the University in Singapore and found a job with a Singapore based company. They wanted me to work as Freelance so basically I will be residing in Indonesia while working for them. Software developing jobs.
    I am Indonesian. I am just wondering is there anything that I need to know in terms of Legal matters?
    Like paying taxes, etc.?

    Moreover, if you guys can help me with this question as well I would really appreciate it.
    How about the Singapore company? What should they do to hire me as Freelance in terms of legal matters. The company is a startup so they asked me regarding this stuff as well.

    Thanks a lot.

  • #2
    In Indonesia :
    Income tax : According to UU no.36 , Tahun 2008 , you need to pay tax over worldwide incomes . First you will have to know if you are required to pay Singapore's income tax :
    - If you are required to pay tax in Singapore , then what you pay there is taken as credit for the calculation of the Indonesian income tax (if taxation in Singapore is higher than in Indonesia , you may be exempted to pay the Indonesian tax) ;
    - If you are not required to pay tax in Singapore , then you just pay in Indonesia (income tax is to be paid monthly , ask your local Kantor Pajak about the details) .

    I don't know about the Singaporean rule , but I guess that there are at least 2 ways to do this relationship :
    - you work as an employee of the Singaporean based company , so you pay income tax in Singapore like any other employee there ;
    - you create a small Indonesian business , so I guess you don't need to pay Singaporean income tax

    I am not a business specialist , but I guess that if your relationship with Singapore is Business to Business (you creating a small Indonesian business) , you will pay less income tax .


    http://www.livinginindonesiaforum.or...8-CV-versus-PT (business : CV X PT)

    http://www.livinginindonesiaforum.or...-to-setup-a-CV (CV setup)

    Note : There are a lot more information about setting up a small business in the internet (in bahasa Indonesia)

    Comment


    • #3
      Originally posted by marcus View Post
      In Indonesia :
      Income tax : According to UU no.36 , Tahun 2008 , you need to pay tax over worldwide incomes . First you will have to know if you are required to pay Singapore's income tax :
      - If you are required to pay tax in Singapore , then what you pay there is taken as credit for the calculation of the Indonesian income tax (if taxation in Singapore is higher than in Indonesia , you may be exempted to pay the Indonesian tax) ;
      - If you are not required to pay tax in Singapore , then you just pay in Indonesia (income tax is to be paid monthly , ask your local Kantor Pajak about the details) .

      I don't know about the Singaporean rule , but I guess that there are at least 2 ways to do this relationship :
      - you work as an employee of the Singaporean based company , so you pay income tax in Singapore like any other employee there ;
      - you create a small Indonesian business , so I guess you don't need to pay Singaporean income tax

      I am not a business specialist , but I guess that if your relationship with Singapore is Business to Business (you creating a small Indonesian business) , you will pay less income tax .


      http://www.livinginindonesiaforum.or...8-CV-versus-PT (business : CV X PT)

      http://www.livinginindonesiaforum.or...-to-setup-a-CV (CV setup)

      Note : There are a lot more information about setting up a small business in the internet (in bahasa Indonesia)
      Thanks for the reply. You mentioned that I will pay less income tax if I setup small business in Indonesia, may I know what you mean by that?

      Because isn't that I would pay less more because I will only have to pay for individual residents tax instead of corporate tax?

      Thanks

      Comment


      • #4
        First let me say that I am not a corporate tax specialist (I only know a little about individual tax) .

        So , I guess that :
        - if you are an employee , you pay income tax as an individual ;
        - if you have a small business , maybe only your business pay income tax , not you . And as I heard in the Forum , small Indonesian businesses pay only 1% of the revenue (better check at Kantor Pajak) . If so , this is a lot lower than you would pay as an individual .

        Note : I have been in few Kantor Pajak and had a very good impression of them . Got very good information there (and they even didn't ask my name) . So I would go there to ask about the small business tax(es) and if by having a small business , does its owner have also to pay individual tax ?
        I guess you can find about that in the internet too .
        Last edited by marcus; 10-01-18, 11:46.

        Comment


        • #5
          So if you choose to open a small business , what you receive from your work enters as the revenue of the business and I guess you individually don't need to pay income tax over this money (otherwise it would be double taxation) .

          But I think it would be good if you also get a individual tax number (NPWP) to declare that you got some money from your business . This because otherwise you cannot have any declared wealth . For example , your business cannot own a Hak Milik house , so if you buy such a house in your name , you need to have some declared wealth for this purchase . And you will pay less income tax if you declare , lets say you earned 100 juta per year during 10 years , than you having to declare you earned 1 miliar in a single year to buy that house .

          Comment


          • #6
            Originally posted by marcus View Post
            So if you choose to open a small business , what you receive from your work enters as the revenue of the business and I guess you individually don't need to pay income tax over this money (otherwise it would be double taxation) .

            But I think it would be good if you also get a individual tax number (NPWP) to declare that you got some money from your business . This because otherwise you cannot have any declared wealth . For example , your business cannot own a Hak Milik house , so if you buy such a house in your name , you need to have some declared wealth for this purchase . And you will pay less income tax if you declare , lets say you earned 100 juta per year during 10 years , than you having to declare you earned 1 miliar in a single year to buy that house .
            Thanks a lot Marcus.
            really appreciate it.

            Comment

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