Reply With Quotemaybe split your retirement between 182 days in Indo (so you don't pay tax I think) and 183 days in Thailand - 3 months here, 3 months there by air asia.
Retirement Visa
I've bumped this 2nd part of my 'Bali experience" post to this new thread to see if I can get more comments.:-
I would like to raise the question of the retirement visa in RI. and its practical financial situation.
It is stipulated that to apply one must show an income of US$1500/month = IDR 207,000,000/annum.
That equates to IDR 207,000,000 - 5,760,000 (taxpayer and spouse deduction) = 201,240,000 taxable income.
The tax on this amount comes to :
1. 25,000,000 @5% 1,250,000
2. 25,000,000 @10% 2,500,000
3. 50,000,000 @15% 7,500,000
4. 100,000,000 @25% 25,000,000
5. 1,240,000 @35% 434,000
Total Tax = 36,684,000
Both agents I have contacted about getting a retirement visa say the charge is US$3000 (IDR 35,000,000) for my wife and I and includes a multiple entry visa. This will also be the recurring annual charge for extensions.
Another requirement is to spend a minimum of US$500/month = IDR 69,000,000/annum on rent; and employ an Indonesian at say US$150/month = IDR 20,500,000/annum.
Therefore:
US$3000 = 35,000,000
US$6000 = 69,000,000
US$1800 = 20,500,000
Total Mandatory expense = 124,500,000
Total of Tax and Mandatory expense to enable the Visa = 161,184,000
This leaves a net of 207,000,000 - 161,184,000 = 45,816,000/annum or 3,818,000/month or US$ 332/month......for food, travel, entertainment, hydro, electric, savings, health.
Any increase in income above IDR 200,000,000 produced triggers the 35% tax rate, which is greater than taxes (at that level) in most western countries, where some social benefits are provided.
How in the world can that Indonesian Retirement Scheme work? How can a retired expat and wife subsist on US$332/month?..or have I badly miscalculated?.
Math-challenged David
maybe split your retirement between 182 days in Indo (so you don't pay tax I think) and 183 days in Thailand - 3 months here, 3 months there by air asia.
Good point David . I didn't think about the income tax , but yes , for people with income not "final taxation" type , like "deposito" , "treasures" ,.. , Indonesian income tax is a concern [ but I think the tax rate changed to : up to Rp50 Juta (5%) , Rp50 J to Rp250 J (15%) , Rp250 J to Rp500 J (25%) , and above (30%)] . And some years ago I found an agent charging as cheap as Rp6 Juta per person ( not included the insurances and multiple entry ). Even so I preferred to stay with the social cultural visa .
Last edited by marcus; 04-04-09 at 22:03.
Marcus, what advantages do you find in staying on a sosbud as against converting to an ITAS..is it all tax related?, and could you explain it for me.Originally Posted by marcus
IknowthatyoubelieveyouunderstandwhatyouthinkIsaid, butI'mnotsureyourealisethatwhatyouheardisnotwhatI meant.
Omdafyd , supposing ITAS is the retirement visa , i figured out that , by doing the social cultural visa all by myself the cost would be the same without all that restriction on rent (btw , one official told me I should rent a USD1,000 per month house) , maid , income tax ,.. (although now I got the income tax card to avoid the Rp2.5 J "fiskal" , but fortunately I was informed by Kantor Pajak that my income is not taxable here ). Social cultural visa is so simple and with the tickets to Kuala Lumpur included in the comparative cost above , I take the opportunity to buy there my multi-vitamin/minerals , omega 3 ,.. .
Last edited by marcus; 04-04-09 at 22:05.
Marcus...Thank you very much for your feedback and update to the tax rates.
This is the kind of debate I hoped my thread would stimulate and I encourage others to post their IDR50 input.
My wife wants to stay in Indonesia longer than our visa allows (possibly pemanently) and I'm researching the Retirement Visa versus the Company Sponsorship versus the Sosbud Visa extensions.
I took the tax rates from this website but now recognize they are out of date, as Marcus said.
I will edit accordingly, but must first have a cocktail to celebrate that the taxation is NOT as onerous as my original post predicted.
I found this updated version of the tax rates, which are as Marcus correctly amended.
http://www.us.kpmg.com/microsite/tax...s/fa09-051.pdf
I have also been told that Company sponsored Kitas is easily got, particularly in Bali, without the high cost of those name-brand agents; my informant says that those agencies try to control and monopolize the Visa agenda for their own benefit.
Does anyone have better information?
Relieved David
Sorry Marcus, I should have said a KITAS not ITAS..but you have answered part of my query thank you.
I look forward to reading David's research on the pros and cons of each visa type.
Our situation needs serious and detailed consideration as to which is the best position to take.
IknowthatyoubelieveyouunderstandwhatyouthinkIsaid, butI'mnotsureyourealisethatwhatyouheardisnotwhatI meant.
Well said!........ Uncle David (Omdafyd)....Our situation needs serious and detailed consideration as to which is the best position to take.
The laws pertaining to retired expats are open to interpretation, both by recipients and authorities.
We are very lucky to have volunteer Etienne (Atlantis) be so very helpful, but he also has a family and a life, and we should not expect him to be our salvation.
IMO, I agree with you that this area of the forum should be a subject of serious discussion on the merits of how to interpret or obviate the RI's clear intentions.
IOW... do they want foreign retired persons or not?
Recognizing that next week will produce a new government in RI, I wonder if the current rules regarding retirement to Indonesia will change.
Malaysia, on the other hand, has clearly defined their intention by advertising their MM2H program, even though, today, they just inaugerated a new PM.
I am constantly discussing with influential Indonesians, courtesy of my in-laws, on how better to increase the value of RI in the Global Market Economy, particularly in eco-tourism. Sadly, my belief is that, even influential people here are too personally motivated and NOT even inclined to view the Republic's International Future, without a personal agenda.
Last night, I watched the movie on HBO about Harry S. Truman, and then googled his history and concluded......a man, surely, without a personal agenda.
We can hope for change!
Hopeful or hopeless David
ps. I've decided that I am too lazy to edit my original post. Please adjust the figures using the link to the new information, or, as provided by Marcus.
Thank you
I think Indonesian government think too much about immigration law reciprocity . I would , instead , focus more on what is better for the country . Requirements should be minimum to avoid bureaucracy . Although I spend here more than USD1,500 (average) per month , I am not used to luxury houses , maid , neither insurances ( I do not want to die because of waiting for the hospital to check my insurance , or why damage's insurance if I do not have a car/motorcycle , or life insurance if my will alredy leaves enough for my family ?) . And also , why I must have a travel agent as my sponsor ?
Last edited by marcus; 05-04-09 at 12:56.
Could not agree with you more Marcus, there are so many areas the Indonesian Government could change, if it had the will to to do so, not only to improve life for it's own citizens but those of us living here, either permanently or temporarily.
Unfortunately, as David mentioned earlier in his discussions with influential members of this society, their primary focus remains on improving their own situation as against the interests of the country as a whole, in other words greed!
A situation not unknown throughout the World.
Marcus, I'm confused why you say you must have a Travel Agent as your sponsor..
Last edited by ohmdafyd; 05-04-09 at 15:24. Reason: update
IknowthatyoubelieveyouunderstandwhatyouthinkIsaid, butI'mnotsureyourealisethatwhatyouheardisnotwhatI meant.
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