Dividend tax in Indonesia is generally subject to a final income tax (PPh) of 10% for resident individual taxpayers, unless the dividends are reinvested in accordance with the provisions of the Directorate General of Taxes under the Income Tax Law and its amendments through the Harmonization of Tax Regulations Law.
Dividends are broadly defined. They include profit distributions in cash, bonus shares, liquidation proceeds exceeding paid-up capital, and disguised payments treated as dividends.
The technical rules for tax exemption are further regulated under Minister of Finance Regulation Number 18/PMK.03/2021, which has subsequently been updated through the latest MoF Regulation. Since 1 January 2026, the reporting of investment realization must be conducted through the Coretax DJP system.
Read Also: Income Tax in Indonesia: A Comprehensive Guide
Dividend Tax for Resident Individuals
If you are a resident individual taxpayer receiving dividends, the following provisions apply:
- General rate: Final income tax of 10% of the gross amount.
- Withheld by the dividend payer at the time of payment.
- Remitted no later than the 10th of the following month.
- Reported in the Monthly Income Tax Return under Article 4 paragraph (2).
However, a tax exemption facility is available. Dividends are not subject to income tax if:
- They are reinvested in Indonesia.
- The reinvestment is made no later than the end of the third month after the end of the fiscal year, i.e., 31 March.
- The investment is maintained for a minimum of 3 fiscal years.
- The investment realization is reported through Coretax.
If these requirements are not fulfilled, the 10% tax remains applicable and cannot be revoked.
Calculation Example
You receive dividends of IDR 100 million.
Final income tax = 10% × IDR 100 million = IDR 10 million.
Net dividends received = IDR 90 million.
If you reinvest the full IDR 100 million in accordance with the rules and report it on time, the income tax becomes 0%.
Dividend Tax for Resident Corporate Taxpayers
For resident corporate taxpayers, the provisions are considerably simpler.
Dividends received from domestic corporations, whether publicly listed or privately held, are excluded from income tax without any reinvestment requirement. The effective tax rate is 0%.
This represents a significant change following the Harmonization of Tax Regulations Law, aimed at improving the investment climate and preventing double taxation.
Read Also: Corporate Tax in Indonesia: Types and Obligations
Foreign Dividend Tax
Dividends from overseas are treated differently.
If you receive dividends from a foreign company listed on a stock exchange, the tax exemption facility applies provided the dividends are reinvested in Indonesia for at least 3 years.
For dividends from non-listed foreign entities, at least 30% of the after-tax profits must be reinvested in Indonesia before a Tax Assessment Letter is issued.
If the reinvestment requirements are not met, the dividends are subject to a final income tax of 10%.
Dividend Tax for Non-Resident Taxpayers
If the dividend recipient is a non-resident taxpayer, Article 26 income tax applies at a rate of 20% of the gross amount.
However, if the recipient’s country of domicile has a tax treaty (P3B) with Indonesia and the recipient provides a Certificate of Domicile, the rate may be reduced to 10–15% in accordance with the applicable treaty.
Dividend Reinvestment Rules for Tax Exemption
Dividends received by resident individuals may be exempt from income tax if 100% of the gross dividend is reinvested in Indonesia and reported through Coretax.
The main reinvestment requirements are as follows:
Investment deadline
No later than 31 March of the following year after the dividend is received.
Minimum investment period
Must be maintained for at least 3 fiscal years.
Eligible investment instruments
Time deposits, government bonds (SBN), corporate bonds, mutual funds, equity participation, or other investments permitted under the MoF Regulation.
Mandatory Coretax reporting
The realization of the investment must be reported on time. Without reporting, the dividend remains subject to the 10% final income tax.
If any of these conditions are not satisfied, the tax exemption facility is cancelled and the dividend becomes subject to the 10% final income tax along with administrative sanctions.
Reporting Procedure Through Coretax
Reporting is the key to obtaining the tax exemption. You must:
- Access the e-Reporting Investment menu in Coretax.
- Input dividend and investment value data.
- Upload proof of investment.
- Submit the report no later than 31 March of the following year.
Late reporting automatically results in the dividend being subject to the 10% final income tax plus administrative sanctions.
Common Taxpayer Challenges
Many taxpayers misunderstand:
- The difference between domestic and foreign dividends.
- Reinvestment deadlines.
- The 3-year minimum requirement.
- The Coretax reporting mechanism.
Even minor errors may invalidate the tax exemption facility and trigger penalties.
Therefore, managing dividend tax requires precise regulatory understanding and proper documentation.
How vOffice Can Help You
As a tax service provider, we at vOffice understand the complexity of dividend taxation and the latest regulatory changes.
Through vOffice tax consulting services, we help ensure your calculations, withholding, and reinvestment strategy comply with regulations.
With vOffice accounting and tax reporting services, we also assist you with Coretax reporting to ensure the tax exemption facility is not revoked due to administrative errors.
If you want to ensure your dividends are tax-efficient and fully compliant, our team is ready to assist you professionally and strategically.
Contact us for a FREE consultation!
FAQ on Dividend Tax in Indonesia
Are all dividends subject to a 10% tax?
No. Dividends received by domestic corporate taxpayers are tax-exempt. Resident individuals may also qualify for exemption if they reinvest the dividends and report them through Coretax.
How long must dividends be invested to qualify for tax exemption?
At least 3 fiscal years from the time the dividend is received.
What is the deadline for reporting dividend reinvestment?
No later than 31 March of the year following the fiscal year in which the dividend is received.
What happens if the investment is withdrawn before 3 years?
The tax exemption facility is cancelled, and the dividend becomes subject to the 10% final income tax plus penalties.
Can foreign dividends be tax-exempt?
Yes, provided they meet the reinvestment requirements in Indonesia in accordance with the minimum criteria set under the applicable MoF Regulation.
