Tax procedures required for expatriates in Indonesia when returning home | Deletion of final tax return, PPh 25, and NPWP

When you return to your post after being stationed in Indonesia, you will need to go through various procedures such as visas, housing, moving, and handing over to your successor.

On the other hand, if tax procedures are postponed, there is a possibility that the tax return obligation will remain even after the person leaves Indonesia, and the monthly income tax advance payment of PPh 25 may continue.

Once you have decided to return to your post, you need to sort out the following three main points.

• Personal income tax return for the year of return
• PPh 25 (monthly income tax payable)
• Deactivation or deletion of NPWP (Taxpayer identification number)

In this article, we will explain the tax procedures necessary for expatriates returning from Indonesia and the personnel, finance, and accounting staff who support them.

Five points to pay particular attention to when returning home

The following five points are particularly important when expatriates in Indonesia return home.

1．． Tax residency determination may begin from the first day of assignment.

Indonesian tax residency determination is not simply determined by whether the period of time has exceeded 183 days.

If you hold KITAS and intend to reside in Indonesia, you may become a tax resident from the first day of your assignment, rather than after 183 days have passed.

2．． Not all foreign income is subject to declaration.

For certain foreigners, there is a system that allows them to limit their taxable income to Indonesian source income for a period of four years.

However, salaries paid by the overseas head office for work performed in Indonesia are Indonesian-sourced income. Therefore, just because the payment is made at the head office does not mean that the item is not subject to tax reporting.

3．． PPh 25 does not always occur

If the expatriate's income is only from Indonesian wages that are fully withheld under PPh 21, the amount of tax paid on the tax return will generally be zero and no PPh 25 will be incurred.

On the other hand, PPh 25 may be incurred if taxes are not withheld from overseas payments due to split payroll, etc., or if you have other income.

4．． Coretax becomes a practical bottleneck

If you do not keep Coretax available even after returning to your home country, you may not be able to file tax returns or complete NPWP procedures from abroad.

Before returning to work, you will need to confirm your registered email address, mobile phone number, electronic certificate, passphrase, etc.

5．． Prepare a power of attorney before returning home

If you wish to request a representative to carry out the procedures after returning home, a special power of attorney is required.

It is important to complete the signature before returning home, as it will be difficult to sign and arrange documents once the person leaves Indonesia.

1．． Tax residency determination for Indonesian expatriates in the year of their return

Even if you leave Indonesia in the middle of the year, you will still need to declare and pay taxes on the income you earned while you were a tax resident.

Article 2, Paragraph 3 of the Indonesian Income Tax Law and PMK 18/2021 stipulate that an individual becomes a tax resident of Indonesia if one of the following applies:

• Persons domiciled in Indonesia
• Those who stay in Indonesia for more than 183 days in any 12-month period
• Persons who stay in Indonesia during the tax year and have the intention to reside in Indonesia

Intention to reside is determined by KITAS, KITAP, employment contract for more than 183 days, and other similar documents.

Therefore, expatriates who hold KITAS may be treated as tax residents from the first day of their assignment, rather than after 183 days have passed.

Additionally, the 183-day standard is determined not by calendar year, but by any consecutive 12-month period. When determining the period of residence in the year of return, it is necessary to check entry and exit records for the past 12 months, not just from January 1 of the current year.

2．． Income to be declared in the year of return

In principle, worldwide income is subject to tax.

Indonesian tax residents are generally taxed on their worldwide income.

For expatriate employees, not only the salary paid by the Indonesian corporation but also the following remuneration paid by the overseas head office are eligible.

• salary
• bonus
• Various allowances
• benefit in kind

Taxation is not determined solely by the place where the salary is paid.

Salaries paid by a foreign head office for work performed in Indonesia must be declared as Indonesia-sourced income. This is especially easy to overlook with split payroll.

4-year limited domestic source income system for foreigners

For certain foreign nationals, there is a system that allows them to limit their taxable income to Indonesian source income for four tax years starting from the year they first become Indonesian tax residents.

In order to be eligible, you must primarily meet the following requirements:

• Be a foreign worker or foreign researcher in a designated occupation
• Must have professional qualifications, academic background, and 5 or more years of experience in a related field.
• Meeting knowledge transfer obligations
• Apply to the Directorate General of Taxation

This system does not apply automatically.

Additionally, income received in connection with business or activities in Indonesia is Indonesian-sourced income even if it is paid abroad.

Therefore, this system applies to income that is truly foreign-sourced, such as investment income in the home country. In principle, salaries paid by the head office for work transferred to Indonesia are not excluded.

Confirmation of tax treaty

In the year of your return, you may be a resident of Indonesia for a period of time and a resident of your home country for a period of the same year, resulting in dual residence.

In that case, you will need to check the applicable tax treaty.

Generally, the following provisions are relevant:

• Tie-breaker rules for residents
• Regulations determining which countries to allocate employment income to
• Certificate of residence issued by the tax authority of your home country

The residence certificate can be used not only for the application of tax treaties, but also as an explanatory document for procedures related to the NPWP.

3．． Personal income tax return for the year of return

Materials to prepare

The following documents are generally required when filing a tax return for the year of return.

material	content
Form 1721-A1	Indonesian tax withholding slip
Indonesia salary information	Pay slip, salary certificate
Head office salary information	Pay slip and income proof from overseas head office
Compensation related materials	Bonuses, allowances, benefits in kind
Foreign income information	Income information in home country and other countries
Immigration record	Passport immigration history
Tax registration information	NPWP, Coretax account information
Payment materials	PPh 25 payment record for the year
Tax treaty materials	Certificate of residence if required

It will be difficult to collect materials after you leave Japan, so it is recommended that you gather them before you return.

benefit in kind

Expatriate compensation may include benefits in kind, such as:

• Company-paid housing
• car
• Children’s education expenses
• Company tax

According to Law No. 7/2021, PP 55/2022 and PMK 66/2023, benefits in kind are also taxable as employment income, with the exception of certain tax exemption provisions.

Therefore, each item must be identified and evaluated before calculating the final PPh 21.

Form 1721-A1 and final PPh 21 calculation

Under the average effective tax rate regime introduced by PMK 168/2023, the monthly PPh 21 is withheld using the average effective tax rate and annualized in the final period.

For employees who retire or furlough during the year, the final period is the month of termination of employment, not December.

Therefore, a final PPh 21 calculation and Form 1721-A1 must be completed at the time of termination of employment.

Final tax return deadline

The deadline for filing personal income tax returns is the end of March of the following year.

For example, if you return to your post in August 2026, the deadline for filing your personal income tax return for 2026 is, in principle, the end of March 2027.

However, just because there is time until the filing deadline doesn't mean you can put off preparing until later.

In order to remove the NPWP, you must have filed a tax return and paid all outstanding taxes. Additionally, after leaving the country, it may be difficult to access Coretax, contact company representatives, and collect information.

PPh 29 and penalty

If there is a tax deficiency as a result of the final tax return, it must be paid as PPh 29 before filing the tax return.

The following penalties will be incurred for filing or paying after the deadline.

• Submission of personal income tax return after deadline: IDR 100,000
• Payment after deadline: Interest at the rate determined monthly by the Minister of Finance.

4．． Cases where PPh 25 occurs

PPh 25 is a system in which the next year's income tax is paid in advance every month based on the income tax amount stated in the previous year's tax return.

However, not all expatriates will incur PPh 25.

If PPh 21 is fully withheld on your Indonesian salary and you have no other income, the tax amount paid on your tax return will generally be zero and PPh 25 will also be zero.

On the other hand, PPh 25 can occur in the following cases:

• There is a salary paid overseas due to split payroll.
• PPh 21 is not withheld on wages paid abroad
• have income other than salary
• Tax deficiency occurs on final tax return

If you are experiencing PPh 25, consider the following actions:

• Application for reduction of monthly prepayment amount due to decrease in income
• Non-Efektif application for NPWP after completion of EPO

Once the NPWP becomes Non-Efektif, the obligation to pay PPh 25 stops.

If you leave your NPWP valid after returning home, you may continue to be required to pay PPh 25 and be subject to inquiries from the tax office even if you have no taxable income in Indonesia.

5．． NPWP Non-Efektif (NE) and deletion procedure upon return

NPWP for foreign expatriates

After the change in the tax identification number system, expatriates will use the 16-digit NPWP and use this number for Coretax.

Practical procedural order

When returning to work, the procedures generally follow in the following order.

procedure	correspondence	Effect/purpose
1	Process EPO	The return will be confirmed in writing, which will trigger the NE application.
2	NE application	Suspend payment obligation if PPh 25 has been incurred
3	Final tax return	Submit after return year return is available on Coretax
4	NPWP deletion application	Apply after completing your final tax return and paying taxes

Why apply for NE before removing NPWP?

At the time an expatriate returns home, the individual income tax return for the year may not yet be available on Coretax.

NPWP deletion cannot be completed if the tax return cannot be submitted and the tax return remains unfiled.

On the other hand, if you leave NPWP enabled, you may continue to accrue PPh 25 during the waiting period before removal.

NE is an interim procedure to suspend prepayment obligations during this waiting period.

Confirmation with KPP required

In the case of actual permanent furloughing, the KPP's judgment should be confirmed as to which NE criteria should be applied.

Since the standards and materials required by KPP may differ depending on the case, it is recommended that you check the required documents in advance.

NPWP Delete

Expatriates who leave Indonesia permanently are subject to NPWP removal.

When deleting, please pay attention to the following points.

• There is no unpaid tax amount.
• Not under tax audit or investigation
• Deletion of an individual's NPWP will be done through a tax audit
• KPP will make a decision within 6 months of receiving the complete application
• If you are reassigned in the future, new registration will be required.

6The period of months is a statutory maximum and does not imply a standard processing period.

6．． Coretax settings to check before returning home

2025Since 2015, Indonesia's tax administration has been transitioned to Coretax. From 2026 onwards, personal income tax returns will also be submitted through Coretax.

Access to Coretax is particularly likely to be a problem when working after returning home.

Coretax requires the following information:

• Coretax account
• electronic certificate
• passphrase
• Registered email address
• Registered mobile phone number
• multi-factor authentication

If you cancel your Indonesian mobile phone number or email address immediately after returning to work, you may not be able to receive the verification code.

Before you leave, please check at least the following:

• Coretax account is valid
• You can use your registered email address even after returning home.
• Keep your digital certificate and passphrase safe
• Deciding who will operate the account after returning to work

7．． Prepare a power of attorney for procedures after returning home

Individual taxpayers who have permanently left Indonesia can complete their tax formalities through a representative.

If you have a special power of attorney based on Article 32, Paragraph 3 of the KUP Law, it is possible for your representative to carry out procedures including the application for deletion of NPWP.

Once the person leaves the country, it will be difficult to sign and arrange the necessary documents. It is important that you complete and sign a special power of attorney before you return home.

8．． Risks of leaving NPWP in effect

If you leave your NPWP in effect after returning to your post, there are risks such as:

• Tax return obligation continues from next year onward
• The obligation to pay PPh 25 may continue.
• Receive inquiries from the tax office regarding non-filing or non-payment
• Unresolved issues from the past come to light when reassigned
• The company needs to continue to manage the tax situation of the person who has left the company.

If the person in question is outside Indonesia, the response to notifications from the tax office is likely to be delayed.

The company needs to manage the progress of NE applications, final tax returns, and NPWP deletion not only before returning to work, but also after returning.

9．． Checklist before returning home

project	Things to check
Return date	Check Indonesia departure date and arrival date
resident period	183Check the application of the day standard or residence intention standard
Immigration record	Check entry/exit records for the past 12 months
salary data	Check Indonesian salary, head office salary, bonus, and allowances
split payroll	Check whether there are salaries paid overseas and the status of withholding tax
benefit in kind	Check housing, automobiles, children's education expenses, and company taxes
Form 1721-A1	Prepare final PPh 21 calculation and withholding tax slip at the end of employment
4Annual system	Check whether the domestic source income limitation system is applicable
tax treaty	Check the status of dual residence and whether a residence certificate is required
PPh 29	Check the tax deficit and payment funds
PPh 25	Check whether there is an advance payment obligation and apply for NE if necessary
NPWP	16Check the digit number and decide the NE/deletion policy
Coretax	Verify your account, email, mobile number, and digital certificate
letter of appointment	Sign a special power of attorney before returning home
EPO・BPJS	Process EPO and terminate BPJS subscription
Tax office correspondence	Deciding who will be in charge of tax audits related to NPWP deletion

10．． Items to be prepared by the company

Even if the expatriate is self-reporting, the company's cooperation is required.

Companies should organize at least the following materials and information:

• Start date of assignment, date of return, entry/departure record
• Indonesia salary amount
• Salaries, bonuses, and allowances paid by the head office
• Company-paid taxes, housing, automobiles, children's education expenses
• Form 1721-A1
• Monthly PPh 21 Withholding Record
• PPh 25 payment status
• Coretax account information
• electronic certificate
• signed power of attorney
• Progress of NE and NPWP deletion procedures

11．． FAQ

Q1． Do I need to file a tax return in Indonesia in the year I return to work?

If you were a tax resident of Indonesia for even part of the year, you are generally required to file a tax return.

If you have KITAS, you may have been a resident from the first day of your assignment, rather than after 183 days.

Q2． Do I need to declare by the date I leave Indonesia?

The legal filing deadline is the end of March of the following year.

However, in order to delete NPWP, you must first file a tax return and pay all taxes. Therefore, in practice, it is necessary to start preparing before returning home.

Q3． Does NPWP always have to be removed?

If there is no longer a tax relationship with Indonesia, you should consider deleting NE or NPWP.

If the NPWP remains in effect, tax return obligations and PPh 25 payment obligations may continue.

Q4. Why do I need an NE application to finally remove it?

At the time of your return, you may not be able to submit your final tax return for the year using Coretax.

Since NPWP cannot be removed until the tax return is completed, apply for NE after EPO and suspend PPh 25 until removal.

Q5． How long does NPWP removal take?

KPP must make a decision within six months of receiving the complete application.

However, since NPWP deletion involves a tax audit, the actual period will vary depending on the response status of the tax office.

Q6． Are salaries paid in the home country also subject to declaration?

As long as the salary corresponds to work performed in Indonesia, it is subject to declaration even if it is paid outside the country.

4If the annual domestic source income limitation system is applied, income that is truly foreign source may be excluded, but salaries paid at the head office corresponding to work assigned to Indonesia will not be excluded.

Q7. Can I request a representative to carry out the procedure after returning home?

By creating a special power of attorney, a representative can carry out procedures including deletion of NPWP.

It is recommended that you sign the form before you return, as it will be difficult to complete the signature procedure after you return.

summary

When an expatriate in Indonesia returns to work, the following three tax procedures need to be sorted out.

1. Personal income tax return for the year of return
2. PPh 25 confirmation and suspension procedure
3. NE application and deletion of NPWP

The tax residency period may start from the first day of assignment, depending on KITAS or intent to reside, rather than after 183 days.

In addition, even if the salary is paid at the head office, the salary for work performed in Indonesia is, in principle, subject to declaration in Indonesia.

If PPh 25 has been incurred, apply for NE after completing the EPO and stop the prepayment obligation. After that, complete the final tax return and tax payment for the year of your return, and then proceed with the NPWP deletion procedure.

In order to carry out the procedures smoothly after returning to work, it is important to prepare a Coretax account, registered email address, electronic certificate, passphrase, and signed power of attorney before returning to work.

It is not that the procedure itself is particularly complex, but rather that it is initiated after the person in question has already left Indonesia, which poses a practical problem. It is important to decide on a policy as soon as you have decided to return to work.

Main legal basis

decree	Main contents
Law No. 6/1983 (KUP Law, final revision: Law No. 6/2023)	General tax procedures, NPWP deletion deadline, power of attorney
Law No. 7/1983 (Income Tax Law, Final Amendment: Law No. 6/2023)	Domestic source income limitation system for tax residents and foreigners
PMK 18/PMK.03/2021	Resident determination, 4-year system
PP 55/2022、PMK 66/2023	Tax treatment of benefits in kind
PMK 168/2023	PPh 21 withholding tax, average effective tax rate system
PMK 81/2024	unified enforcement rules
PER-7/PJ/2025	NE and NPWP removed
KEP-537/PJ/2000	PPh 25 Monthly Prepayment Reduction

*This article is general information based on laws and regulations valid as of July 2026. This is not tax or legal advice for individual cases. The specific treatment may differ depending on the facts and the tax office's practical operations.

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