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Yikes! I have to pay to leave the country!

June 28, 2009

As a brand-new expat, I’m just working out the new (2009) FISCAL rules in Bali.  Anyone who is a resident here – and that includes expats on KITAS (which allows you to work) or Retirement KITAS (which doesn’t) must pay a whopping 2.5 million Rupiah FISCAL exit tax. And this is on top of the 100,000 Rupiah airport departure tax … unless you register for tax and get an NPWP card, in which case you pay no FISCAL tax on departure.

Oh, I understand (and agree with) the intent – if you live in Bali for more than six months, you really should do the right thing and register for tax – just as you need to do in Australia by having a Tax File Number. And I even agree with (and rather admire) the big stick approach of charging a huge fee for those who choose not to register for tax and the juicy carrot of zero FISCAL for those who do …

The new legislation is obviously designed to ‘encourage’ those who legally work in Bali – i.e. those with a KITAS working permit – to do their civic duty.

But what about us Retirement KITAS holders? Legally, we can’t, and don’t work in Bali, so we don’t have an income. But if we register for tax and get our NPWP, surely we would be wasting our time, and the government’s, by having to submit ‘nil tax’ returns each month and at year’s end. It may even be that we would attract unwelcome attention from the authorities, because they may find it difficult to understand why we registered for tax if we actually have ‘no income’. But if we don’t register, each time we need to leave the country to travel, or visit loved ones, we have to pay close to $300 AUD – a punitive sum intended to ensure compliance.

Obviously, penalising Retirement KITAS holders was not what the government intended. Perhaps the regulations will one day be amended to make retirement KITAS holders without an NWPW exempt from FISCAL.

In the meantime, there is a possible solution. An expat here informs me that the simplest way out is to register for tax, get that magic NWPW card, and provide the authorities with a Statutory Declaration that on a Retirement KITAS, the law forbids you to work. Therefore you are requesting an exemption from submitting tax returns because you have no income. Presto – no FISCAL. One word of caution: the law here is that you must have held your NWPW for one month before the zero FISCAL benefit kicks in. I’d better hurry if I want to make this happen before my trip to Singapore in one month and 2 days …

I’m going to test this out in the next day or so, and I’ll keep you posted as to the outcome.

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20 comments

  1. Hi,

    Enjoying the blog, it makes a change have someone write because they’re interested rather than writing to make money (so far at least).

    I looked into the NPWP situation last year when I got my spouse KITAS, which similarly meant I couldn’t work. Trouble is, the consultant I was speaking to said that there was no way out of doing a tax return each year with an NPWP, as they want to see your global income, not just local, and will tax you on anything that isn’t covered by a dual tax treaty. I’d therefore be surprised if your friend’s plan works, but here’s hoping….


  2. Thanks J – I may be naive, but I suspect that monetising blogs is counterproductive anyway. As soon as a reader suspects that there is ‘cash for comment’ or a marketing agenda involved, they take what you write with a truckload of garam 😉
    I am hoping that because there is a dual tax treaty between Australia and Indonesia, the exemption approach will work. But who knows …?


  3. Looking forward to a follow up post to this one. The idea of registering for the NPWP on any kind of non-working kitas is confusing, and the thought of putting a tax return in that includes overseas income from investments etc gives me the heeby jeebies.


  4. UPDATE: So far, so good. I ended up getting my NPWP through the system just before leaving Bali for a short trip. There was no problem, and no FISKAL payable on departure. It seems essential however, that one’s KITAS be of the ‘multiple entry/exit’ type – this should be done at the time of application for KITAS. Regarding the tax situation, if your home country has a dual tax treaty with Indonesia, there should be no problem. You can’t be taxed twice on the same income, so if you are liable to pay tax on, say, Australian income, you pay it to the ATO, not to the Indonesian Tax Office. For your Indo annual tax return (due in March, I think), just submit a ‘nil income return’. You may be required to attach your tax assessment form from Australia to prove that tax has been paid.

    As far as I can see, the NPWP requirement for FISKAL exemption was never designed to include retirees. This is an anomaly which can be circumvented by the simple device of registering for an (unnecessary) NPWP to put you in the ‘FISKAL-exempt’ category, then claiming ‘tax-exempt’ staus because of the dual tax treaty. Labyrinthine? Probably – but before we shake our heads about the local system, think about some of the complexities in our tax law back home … 😉


  5. Hi and thanks a bunch for this info. its helpful to a degree because what if I dont pay tax in Oz which I dont .I have “nil tax ” on my return because the pension is below taxable rate? do you think it could be “nil tax” in Indo too ? also can you tell me what NPWP stands for ? at this stage “New Pensioner Watchout Paranoia” seems appropiate for me,again thankyou in advance.

    PS I meant to also ask should the stat.dec. come from someone in Oz?


    • NPWP: Nomor Pokok Wajib Pajak – Literally, “the number of the subject of the tax obligation”, in other words, the Tax File Number. But I like your acronym better … 😉

      To the best of my knowledge, the ‘Nil return’ you will need to submit here is quite simple. To reduce follow-up queries, it may be a good idea to enclose a photocopy of your tax assessment showing that your income is below the threshold that attracts tax.

      You don’t even need an official Stat Dec when applying for the NPWP. If you do it through an agent or Notaris (lawyer) – which I would highly recommend – just get them to draft a formal letter explaining your non-income status and send it off to the appropriate poobahs together with the application. Good luck!


      • Thank you borborigmus,PHEW! yes I will follow through on this issue and hope there are no probs.I enjoyed reading your blogs and hopefully will be in Bali in Oct.


  6. Hello,

    First of all thanks for all this info. I haven’t done a lot of research yet on livin in Indonesia (Bali in particular) but can you tell me if there is an amount of cash I must have access to before I apply for a visa to live there. I am over the 55 yrs which I believe makes me eligible. Thanks


    • As part of your application, you need to demonstrate that you have savings of at least $1500 USD for each month that you are going to stay here. i.e. for a 12-month Retirement KITAS you need to show a photocopy of a bank statement showing a minimum of $18,000 USD current balance at the time of application. I’d blank out any details – such as transactions etc – because it’s none of anyone’s business. I’d also make sure that there is not a signficantly higher balance than needed shown. These doduments could end up anywhere – no point in making yourself a target 😉

      This requirement is merely to show that you will be able to support yourself while here.


  7. Hi, I currently live here in Bali and have a student visa I think as I attend one of the international schools. I also have KITAS, but soon I may need to leave the country urgently to fly back to Australia and I was wondering what I would have to do in order to do so. Would I book the flights and then just come to the airport the next day and check in, or considering I have KITAS and am technically a resident do I have to get an exit visa??

    Basically, what do I have to do to leave the country?

    Thanks!!


    • Without knowing the details of your KITAS (dependent visa? multiple entry/exit?) and whether you are on a family card, this is way too complex to answer. You need accurate, professional advice – with some types of KITAS, once you leave, you may find that your KITAS expires. You may even need to pay FISKAL. If you didn’t use an immigration agent originally, I suggest you talk to one immediately. If you feel confident about dealing with Imigrasi yourself, go see them before booking a flight. Good luck!


  8. Could you please tell me how much a Balinese Resident has to pay at the airport to leave the country.


    • The good news is that since 1 January 2011, FISKAL exit tax for residents has been abolished. Instead of 2.5 million, now Indonesian residents (and foreigners with a KITAS) pay nothing.


      • Thank you I am bringing my Balinese friend back to Australia in February and by the time I paid for airfare, travel insurance, passport and visa I think the 2.5 million would have drained me. One more question do they have to still pay the 150,000 like tourist to leave the country?


      • Yep – the 150,000 is an airport departure tax for each international passenger, and is completely separate from the now-defunct FISKAL tax.


  9. Thank you so much for your reply.I was talking to my friend today and he told me that because he is not registered for tax NPWP he still has to pay the 2.5 Million. He was told this today by someone at the Immigration department. I tried to tell him the FICKAL tax was no longer but he is very worried that he may still have to pay.


    • Sounds like someone at Immigration is trying to make a quick (and illegal) 2,500,000. Or else the people at the Immigration office have not yet been informed of the change in the regulations – which for Bali, would be perfectly normal.


  10. Thanks.
    Thats what I thought! But just to be on the safe side do you know where I can get my hands on any document that actually states this tax been abolished.

    When he applied for his Passport they told him to come back to collect it when it was ready but when he went they said it would not be ready till the next day and they would bring it to him on the beach. He tried to argue but it was that way or nothing. So this guy met him on Kuta Beach to hand over the Passport and my friend had to pay about 1.5 million for it. So wrong!!


    • Absolutely illegal and corrupt. The officer responsible should be reported.


  11. P.S. Malaysia, which is a far more Westernised and efficiently-run country with a far greater certainty in their law-making, has a retirement scheme specifically aimed at foreigners called “Make Malaysia Your Seond Home” (GOOGLE for it!) which expressly EXCLUDES foreign income from Malaysian tax. To the best of my knowledge, such a provision does not exist in the Indonesian tax law. (Malaysia also offers 10-year retirement visas which are GUARANTEED to be renewed provided one does not fall foul of the law, and which allow retirees to own and operate businesses and also enter into employment. They just haven’t got a place called Bali but, hey, give me Pulau Penang any day :-).



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