Announcement

Collapse
No announcement yet.

Tax on worldwide income

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Tax on worldwide income

    So I spoke to a tax consultant and he told me that all my foreign income (shares, savings accounts, rental income) will be seen as personal income and taxed in the progressive scale (up to 30%).
    Double Tax treaties apply, but only mean that you get a deduction. E.g. right now I already pay about 10% tax on rental income in Europe, that means I still have to pay Indonesia 20% extra to end up at 30%. 
    Now I already feel this is unfair considering that the rental tax in Indonesia isn't this high, but ok now comes the next part. I still have a mortgage on the properties (about 50%), for the sake of argument let's use the following numbers:
    Monthly rental income 10.000.000
    Monthly interest 5.000.000
    Various monthly costs 1.500.000

    So before tax I make about 3.500.000/month. However according to my tax consultant, Indonesia wants 30% of 10.000.000.

    This seems excessive to me and I'd probably be better off just keeping it empty then. Anyone has experience with this?

  • #2
    Originally posted by steven86 View Post
    (1) So I spoke to a tax consultant and he told me that all my foreign income (shares, savings accounts, rental income) will be seen as personal income and taxed in the progressive scale (up to 30%).

    (2) Double Tax treaties apply, but only mean that you get a deduction.

    (3) E.g. right now I already pay about 10% tax on rental income in Europe, that means I still have to pay Indonesia 20% extra to end up at 30%.
    Now I already feel this is unfair considering that the rental tax in Indonesia isn't this high, ...

    (4) let's use the following numbers:
    Monthly rental income 10.000.000
    Monthly interest 5.000.000
    Various monthly costs 1.500.000
    So before tax I make about 3.500.000/month. However according to my tax consultant, Indonesia wants 30% of 10.000.000.

    (5) This seems excessive to me and I'd probably be better off just keeping it empty then. Anyone has experience with this?

    (1) I think this tax consultant is mistaken . I would check this with some officers of the Indonesian Tax Office/Kantor Pajak . Interst from saving accounts in Indonesia , for example , are not added to the other incomes to apply the 5% , 15% , 25% , 30% taxation .

    (2) I did read part of few Tax Treaties and found them stating a lot more subjects than that . Regardless of Tax Treaties , Indonesian Income Tax Law does not apply double taxation .

    (3) I guess you know that part of your income is taxed : 5% , 15% , 25% and 30% .

    (4) I would certainly check that in Kantor Pajak . I never paid rental income in Indonesia but in my country (South America) we pay over the net rental income (deducting all costs) .

    (5) The question I asked many Indonesian Tax officers : "do I have to declare all my worldwide incomes ?" . All 3 different officers (from 3 different Kantor Pajak) gave me the same answer : "you must declare all worldwide incomes IF you work in Indonesia" . You better confirm this again , because I did ask that almost 10 years ago . Few other members of this Forum got the same answer . Few other members also said that they could not even get the Indonesian Tax number (NPWP) after telling they don't work in Indonesia .

    Comment

    Working...
    X