US Expats in Indonesia (Bali): FEIE, PFIC Traps & E33G Visa Tax Rules (2026)

Indonesia — and Bali in particular — has become one of the most popular destinations for US digital nomads, early retirees, and expat professionals. The combination of low cost of living, tropical climate, English-language hospitality industry, and the government-issued E33G Remote Worker Visa has made Bali the top global hub for location-independent US workers. Yet the US tax picture for Americans in Indonesia is more complex than most arrive expecting. Indonesia has progressive income tax rates reaching 35% — higher than commonly assumed — and a 183-day residency rule that can make US citizens Indonesian tax residents subject to worldwide taxation. The US-Indonesia income tax treaty (1987) has a saving clause that limits its benefit to US citizens on most income. There is no US-Indonesia totalization agreement, exposing self-employed US expats to full US self-employment tax. BPJS social insurance contributions have a §402(b) treatment that creates US taxable income annually. Every Indonesian reksa dana (mutual fund) is a PFIC. And foreigners cannot own freehold land — the property ownership structures available (Hak Pakai, leasehold, PT PMA) each carry distinct US reporting consequences. This guide covers the key issues for 2026.

1. Indonesian Income Tax at a Glance

Indonesia taxes individuals who are tax residents — defined as those who are domiciled in Indonesia or who spend 183 or more days in Indonesia within any 12-month period — on their worldwide income.¹ Non-residents are taxed only on Indonesian-source income, subject to a flat 20% PPh 26 (Article 26 withholding tax) on gross amounts paid.

The 2026 progressive tax brackets for resident individuals (PPh 21) are:

Exchange rate illustrative at USD/IDR 16,000. The PTKP (Penghasilan Tidak Kena Pajak) personal exemption is IDR 54,000,000/year (~$3,375) for single filers, plus IDR 4,500,000 per dependent (max 3). All taxable income figures above are after PTKP. Source: Indonesian Income Tax Law No. 36/2008 as amended by HPP Law No. 7/2021; unchanged for 2026.

Effective rate estimates for US expats at typical income levels (before PTKP, which is small at these income levels):

• $50,000/year (~IDR 800M): Indonesian effective rate approximately 20–22%
• $100,000/year (~IDR 1.6B): Indonesian effective rate approximately 25–26%
• $200,000/year (~IDR 3.2B): Indonesian effective rate approximately 27–28%

Indonesia does not impose a capital gains tax on individual investors selling listed securities on the Indonesia Stock Exchange (IDX). A final tax (PPh Final) of 0.1% applies to each sale transaction via stock brokers — this is a transaction tax on gross proceeds, not a capital gains tax. Indonesia imposes a PPh Final of 2.5% of the transaction value on sales of land and buildings by the seller (collected at the time of sale by the notary). This is a final tax on gross proceeds, not on gain.

2. FEIE vs Foreign Tax Credit: Medium-High Tax Country Analysis

US citizens living abroad choose between the Foreign Earned Income Exclusion (FEIE, Form 2555) — which excludes up to $132,900 of foreign earned income in 2026² — and the Foreign Tax Credit (FTC, Form 1116), which credits Indonesian income taxes paid against your US tax liability dollar for dollar, subject to the §904 limitation.³

Indonesia sits in a medium-high bracket that makes FEIE vs FTC genuinely contested at most income levels:

• Below FEIE limit ($132,900) — FEIE often wins: At $80K–$130K USD of earned income, your Indonesian effective rate is approximately 23–25% and your US marginal rate is 22–24%. FEIE eliminates the US tax on that income entirely. FTC at 24% Indonesian rate vs 22% US marginal provides a surplus in the passive basket with limited use against earned income. FEIE is simpler and usually produces a lower US combined bill for moderate earners.
• Above FEIE limit — FTC covers the excess: Income above $132,900 cannot be excluded. For the excess amount, Indonesian rates (30–35%) typically exceed US marginal rates in those brackets, so FTC fully eliminates residual US tax on the excess. Combined approach: FEIE on the first $132,900, FTC on the remainder.
• High earners ($300K+) — FTC may win overall: At very high income where the FEIE's five-year lock-in becomes costly if you later move to a lower-tax country, a pure FTC approach is worth modeling. Indonesian effective rates at this level (28–30%) provide substantial but not always complete FTC coverage against US top rates of 37%.
• Passive income — FTC only: FEIE applies only to earned income (wages, salary, self-employment net income). Dividends, interest, capital gains, and pension distributions are never excludable under FEIE. Your only relief on passive income is FTC in the passive income basket.

FEIE traps that apply in Indonesia as everywhere:

• Self-employment tax: IRC §1402(a)(8) — the 15.3% SE tax applies to excluded earned income. FEIE provides no relief from SE tax.
• IRA/Roth IRA eligibility: IRC §219(f)(1) — IRA contributions require earned income not excluded under FEIE. Fully FEIE'd income forfeits IRA access. See our IRA contribution calculator for partial-FEIE strategies.
• Five-year revocation lock-in: Once elected, FEIE cannot be re-elected for five years after revocation. Don't elect FEIE if you may later move to a high-tax European country where FTC would be optimal.
• Housing exclusion: Jakarta and Bali do not appear in IRS Notice 2026-25's list of high-cost cities with elevated housing exclusion caps. The standard base housing amount of $21,264 applies (16% × $132,900).⁴ This is meaningfully lower than Singapore ($86,700), Hong Kong ($114,300), or London ($73,700).

Use our FEIE vs FTC calculator to model your specific income level and filing status before choosing a method.

3. The E33G Remote Worker Visa: Tax Status for US Citizens

Indonesia's E33G Remote Worker Visa (also called the Second Home Visa or Conitas Visa for remote workers) was introduced in 2023 specifically for foreign nationals who earn income entirely from foreign sources and work remotely. The E33G is valid for one year and renewable.⁵

E33G requirements (2026):

• Proof of employment or self-employment with a non-Indonesian employer/client
• Minimum monthly income of approximately USD 5,000/month ($60,000/year), evidenced by bank statements
• Health insurance coverage
• No authorization to work for Indonesian companies or clients on the E33G

What the E33G does and does not do for US tax purposes:

• Does: Legally authorize your presence in Indonesia while working for foreign employers. Satisfies Indonesian immigration requirements for digital nomads.
• Does NOT: Create a tax exemption. The visa type does not appear in Indonesian tax law as a basis for exemption from tax residency. If you stay 183+ days, you are an Indonesian tax resident under the Income Tax Law regardless of your visa type.

The 183-day tax residency trigger: Indonesian tax law creates tax residency when a person is present in Indonesia for 183 days or more in any 12-month period. As an Indonesian tax resident, you are in principle taxable on worldwide income — including your US-sourced remote work income. You are required to register for an NPWP (Nomor Pokok Wajib Pajak, Indonesian Tax Identification Number) and file an annual Indonesian tax return (SPT Tahunan).

Enforcement reality for E33G holders: In practice, Indonesian tax authorities have not systematically pursued foreign remote workers on E33G visas whose income comes entirely from abroad. The administrative framework for taxing fully foreign-source income of E33G holders is not well-developed, and many E33G holders do not register for NPWP or file Indonesian returns. However: (1) the legal obligation exists, (2) enforcement may tighten as the program matures, and (3) failure to register carries formal penalties under Indonesian tax law. The prudent approach for stays beyond 183 days is to register for NPWP and obtain guidance from an Indonesian tax advisor on your SPT filing obligations.

For US tax purposes: Your US tax obligations do not change based on your Indonesian tax situation. You owe US tax on worldwide income. If you also pay Indonesian income tax, that Indonesian tax is creditable (FTC) against your US liability. The E33G visa does not affect any US tax analysis.

4. US-Indonesia Tax Treaty: What It Means for US Citizens

The United States and Indonesia have an income tax treaty signed July 11, 1988, entered into force February 1, 1997.⁶ This is more than many countries in Southeast Asia (Singapore and Thailand have no US income tax treaty), but its practical benefit for US citizens is constrained by the saving clause.

Saving clause: Like virtually all US tax treaties, the US-Indonesia treaty contains a saving clause under which the US retains the right to tax its citizens and residents as if the treaty had not come into effect. This is the standard mechanism by which the US preserves citizenship-based taxation. The result: US citizens cannot use the US-Indonesia treaty to eliminate US income tax on their earnings in Indonesia. Double-taxation relief for employed income comes from the FEIE and FTC under domestic US law — not the treaty.

What the treaty does offer:

• Reduced PPh 26 withholding on dividends: Indonesia's domestic PPh 26 rate on dividends paid to non-residents is 20%. The US-Indonesia treaty reduces this to 10% (for corporate holders owning 25%+ of the paying company) or 15% (for other holders). If you receive Indonesian-source dividends, the treaty rate reduces withholding, and any remaining Indonesian tax is FTC-creditable.
• Interest: Treaty limits Indonesian withholding on interest to 10% (vs 20% domestic).
• Royalties: Treaty limits to 10–15% depending on type.
• Article 18 (pensions): Government-employer pension provisions exist, but private pension deferral under the US-Indonesia treaty is not clearly established in the way the UK-US or US-Germany treaty provides. BPJS Ketenagakerjaan is not a treaty-qualified pension. Consult a specialist for any pension treaty analysis.
• Tiebreaker (Article 4): If you are a tax resident of both the US and Indonesia in the same year, the treaty contains a tiebreaker rule based on permanent home, center of vital interests, habitual abode, and nationality. However, the saving clause effectively overrides the tiebreaker for US citizens — the US can still tax you as a citizen regardless of where the tiebreaker points for Indonesian purposes.

Form 8833: If you rely on any treaty position, you must disclose it on Form 8833 attached to your US return. Using a treaty-based position without this disclosure can result in penalties.

5. No US-Indonesia Totalization Agreement: SE Tax Trap

The United States and Indonesia do not have a Totalization Agreement.⁷ Totalization agreements are bilateral Social Security treaties that eliminate dual social insurance taxation. Indonesia is not among the 30 countries with US totalization agreements — the list includes Australia, Germany, UK, Canada, France, Japan, and South Korea, but not Indonesia or any other Southeast Asian country.

Consequences for self-employed US expats in Indonesia:

• Full US self-employment tax applies: 15.3% on the first $184,500 of net SE income in 2026 (12.4% SS + 2.9% Medicare), plus 2.9% Medicare-only on all SE income above that threshold.⁸
• No certificate of coverage to exempt you from Indonesian BPJS contributions. If your Indonesian employer or client also requires BPJS enrollment, you pay both systems simultaneously.
• The FEIE half-SE-tax deduction (§164(f)) reduces your adjusted gross income by half the SE tax paid — this remains available, but provides only partial relief.

Entity structure options for self-employed US expats: See our self-employed expat tax guide for a full analysis of sole proprietor vs S-corp vs CFC structures. For US citizens in Indonesia, a foreign corporation (PT PMA) can be used for business operations — but if owned 50%+ by US persons, it triggers CFC rules (see Section 9 below). An S-corp is not available to non-resident shareholders.

6. BPJS Social Insurance: §402(b) Trap for Employed US Expats

BPJS (Badan Penyelenggara Jaminan Sosial) is Indonesia's mandatory social insurance system, administered through two agencies: BPJS Ketenagakerjaan (employment insurance) and BPJS Kesehatan (health insurance). Foreign workers who hold a KITAS (limited-stay permit) for employment purposes and have been working in Indonesia for 6 months or more are required to participate.⁹ E33G holders are self-sponsored remote workers, not employed by Indonesian entities, and are generally not required to participate in BPJS.

BPJS Ketenagakerjaan contribution rates (employees employed by Indonesian entities):

• JKK (Work Accident Insurance): employer 0.24–1.74%, employee 0%
• JKM (Death Insurance): employer 0.3%, employee 0%
• JHT (Old-Age Savings / Jaminan Hari Tua): employer 3.7%, employee 2%
• JP (Pension / Jaminan Pensiun): employer 2%, employee 1% (for workers under age 57)

BPJS Kesehatan (Health Insurance): employer 4%, employee 1% (capped at IDR 12M/year salary for contribution calculation)

US tax treatment of BPJS — IRC §402(b):

• JHT (old-age savings) and JP (pension) are treated as nonexempt employees' trusts under IRC §402(b) — not US-qualified plans. There is no US tax deferral on contributions or earnings.
• Employer contributions are currently taxable US compensation. Your Indonesian employer's 3.7% JHT contribution, 2% JP contribution, and other employer-side BPJS amounts vest to your account and are taxable US compensation in the year vested, even though you cannot access JHT until termination of employment and JP is not accessible until retirement age.
• Employee contributions are made from post-US-tax dollars — no US deduction available.
• JHT investment earnings inside the fund are taxable to you annually on your US return.

JHT withdrawal on departure: A key benefit for departing foreign workers is the ability to withdraw the full JHT balance immediately upon cessation of Indonesian employment and permanent departure. This withdrawal, to the extent of previously taxed contributions and earnings, should not create additional US taxable income (you've already paid US tax along the way). Consult a specialist to ensure the tax basis is correctly tracked.

FBAR and Form 8938: BPJS accounts (JHT, JP) are foreign financial accounts subject to FBAR reporting if aggregate foreign account balances exceed $10,000. Form 8938 applies above FATCA thresholds. Form 3520 reporting for foreign trusts is generally not required for mandatory employer-plan contributions under Rev. Proc. 2020-17 employer-plan relief — but confirm with a specialist for your specific situation. See our Form 3520 guide.

7. Indonesian Investments: PFIC Traps in Reksa Dana and IDX ETFs

Indonesia's retail investment market offers a wide range of products that are Passive Foreign Investment Companies (PFICs) under IRC §1297 — pooled investment vehicles where 75%+ of gross income is passive or 50%+ of assets produce passive income.¹⁰

Indonesian investment products that are PFICs for US citizens:

• Reksa dana (mutual funds): Equity reksa dana, fixed-income reksa dana, money market reksa dana, and mixed reksa dana — all qualify as PFICs. Offered through fund managers (Manulife, Schroders Indonesia, Bareksa, Bibit, Ajaib, CIMB Niaga, and others).
• ETFs listed on the Indonesia Stock Exchange (IDX): Indonesian-domiciled ETFs are PFICs. This includes equity ETFs and bond ETFs listed on IDX.
• Investment-linked insurance products (unit-linked / DPLK): Life insurance policies with investment components invested in reksa dana sub-funds. The sub-funds are PFICs; the Indonesian insurance wrapper provides no US tax shelter.
• Indonesian government bonds (SBN/ORI/SR): Retail government bonds (ORI, Sukuk Ritel/SR) sold to individuals. These are not PFICs — they are debt instruments, not pooled investment vehicles. However, interest income is ordinary income taxable in the US, with Indonesian withholding tax (typically 10–15% final) FTC-creditable.

What is NOT a PFIC: Individual company stocks listed on IDX (direct equity ownership in individual Indonesian companies — Bank Central Asia, Astra International, Telkom, etc.) are NOT PFICs. However, individual IDX-listed stocks carry full US tax treatment on dividends (ordinary income) and capital gains (short-term or long-term rates), with no IDX capital gains tax generating an FTC offset (Indonesia doesn't tax individual investor capital gains on listed shares).

Without a QEF or mark-to-market election, PFIC gains are taxed under the §1291 excess distribution regime — ordinary rate (37%) plus compounding interest charges on deferred gain. Use our PFIC tax impact calculator to model the penalty cost of holding reksa dana without an election.

Solution: Hold US-domiciled ETFs (VTI, VXUS, BND, BNDW) through a US-custodied brokerage accessible from Indonesia. Interactive Brokers commonly serves US expat clients in Indonesia. Avoid reksa dana, IDX ETFs, and unit-linked insurance products entirely.

8. Property Ownership for US Citizens in Indonesia

Indonesian law (Basic Agrarian Law No. 5 of 1960) reserves freehold land title (Hak Milik) for Indonesian citizens only. This has not changed and is not expected to change. Three ownership structures are available to US citizens:¹¹

Hak Pakai (Right of Use):

• A registered land title available to foreigners holding a KITAS (limited-stay permit) or KITAP (permanent-stay permit)
• Initial term: 30 years; renewable for 20 years, then a further 30 years — 80 years total
• Legally registered with the National Land Agency (BPN); more secure than leasehold
• Requires maintaining Indonesian residency permit status throughout the ownership period
• E33G holders: your E33G status must convert to KITAS or KITAP to hold Hak Pakai; standard E33G holders without residency conversion may not qualify

Hak Sewa (Leasehold):

• A private contractual arrangement with the freehold landowner — typically 25 to 30 years, sometimes with options to extend
• No residency permit required; available to any foreigner
• Not registered with BPN; relies entirely on private contract enforcement
• Legally weaker than Hak Pakai; disputes depend on Indonesian civil courts
• Common in Bali for villas and residential properties

PT PMA (Foreign Investment Company):

• An Indonesian limited liability company (PT) established under BKPM (investment board) rules for foreign ownership
• Can hold Hak Guna Bangunan (Right to Build) title, convertible to Hak Pakai
• Minimum paid-up capital: IDR 2.5 billion (approximately USD 150,000 at IDR 16,000/USD) as of October 2025 regulatory change¹²
• Requires ongoing compliance: annual reports, local director, BKPM filings
• CFC trap for US citizens: If you own 50%+ of a PT PMA, it is a Controlled Foreign Corporation under IRC §957. Annual Form 5471 (penalties $10,000–$60,000 for failure to file), Subpart F FPHCI income inclusions, and NCTI (formerly GILTI, renamed by OBBBA in 2026) active business income inclusions may apply. See Section 9 below and our foreign business owner guide.

US tax treatment of Indonesian real estate:

• §121 primary-residence exclusion: The US $500,000 MFJ / $250,000 single exclusion under §121 applies to foreign primary residences — there is no geographic restriction. If your Indonesian home was your primary residence for at least 2 of the last 5 years before sale, up to $500,000 MFJ of gain is excluded from US taxation.
• Indonesian PPh Final at sale: The seller pays 2.5% of the transaction value as a final Indonesian income tax (PPh Final) — collected by the notary at closing. This is a tax on gross proceeds, not on gain. Its FTC creditability is uncertain (a tax on gross proceeds, rather than a net income tax, may not fully qualify as a creditable foreign income tax under Treas. Reg. §1.901-2). Consult a specialist before planning FTC treatment of this tax.
• Currency gain: If you finance an Indonesian property with an IDR-denominated loan and the IDR appreciates against the USD over the life of the loan, the currency gain realized at payoff is §988 ordinary income for US purposes. The Indonesian Rupiah has historically been volatile; this risk is real for long-term borrowers.

9. PT PMA and CFC Rules for US Business Owners

Many US citizens in Indonesia establish a PT PMA to operate a local business — restaurants, villas, consulting firms, or to hold real property. A US person owning 50%+ of a PT PMA makes it a Controlled Foreign Corporation under IRC §957, with annual reporting and potential income inclusion obligations:

• Form 5471: Required annually for each CFC you own or control. Failure-to-file penalties: $10,000 per year minimum, up to $60,000 for continued failure.
• Subpart F (FPHCI): Passive income earned by the PT PMA — interest, dividends, rents from unrelated parties, royalties — is includable in your US income in the year earned, whether or not distributed.
• NCTI (formerly GILTI, renamed by OBBBA effective January 2026): Active business income of the PT PMA that exceeds a return-on-tangible-assets threshold is included in your US income annually. The §962 election may allow corporate-rate treatment (currently ~21%) instead of the individual 37% rate, but this requires careful modeling.
• Check-the-box election: A PT PMA can be treated as a disregarded entity or partnership for US purposes if you make a check-the-box election on Form 8832. This eliminates the CFC regime but causes all PT PMA income and expenses to flow directly onto your personal US return — simpler for small businesses. Consult a specialist for the right structure.

See our foreign business owner guide for a full CFC vs check-the-box analysis.

10. FBAR and FATCA Reporting

Every Indonesian financial account must be evaluated for US reporting obligations:

• FBAR (FinCEN 114): Required if aggregate foreign financial account balances exceed $10,000 at any point during the calendar year. Covered accounts: Indonesian bank accounts (Bank BCA, Bank Mandiri, Bank BRI, Bank BNI, HSBC Indonesia, OCBC NISP, Jenius/BTPN), brokerage accounts at Indonesian securities firms, BPJS JHT accounts, and IDX-listed investment accounts. Annual deadline: April 15 (automatic extension to October 15, no form required).
• Form 8938 (FATCA): Required if total foreign financial assets exceed $300,000 single / $600,000 MFJ at any point during the year (or $200,000 / $400,000 at year-end) for taxpayers living abroad. Indonesian property held through a PT PMA is not a foreign financial account, but your ownership interest in the PT PMA may be reportable separately.
• Form 8621 (PFIC): Required annually for each PFIC holding — Indonesian reksa dana positions, IDX-listed ETFs, unit-linked insurance sub-funds.
• Form 5471: Required if you own 10%+ of a PT PMA or other Indonesian corporation. See Section 9.
• Indonesia FATCA IGA: Indonesia signed a FATCA Model 1 Intergovernmental Agreement in November 2014. Indonesian financial institutions report US-person account information to the Indonesian Directorate General of Taxes (DJP), which then shares with the IRS. US persons are not systematically denied Indonesian bank accounts, but some private banking services restrict US clients due to FATCA compliance costs.

11. State Taxes: Domicile Trap Applies Before You Leave

Moving to Indonesia does not automatically end your US state tax obligations. If you were domiciled in California, New York, Virginia, or another aggressive state before relocating, you may remain a state tax resident subject to state income tax on worldwide income. California does not recognize the federal FEIE — California-source income and all income of California residents (under California's own residency rules) is taxable at California rates (up to 13.3%) regardless of where you live. New York applies a 184-day rule and "permanent place of abode" test; maintaining a New York apartment while living in Bali can create NY tax residency. See our state tax residency guide for the complete domicile-severance checklist before you depart.

12. Pre-Move Planning Checklist for Indonesia

1. Model FEIE vs FTC for your specific income level and type. Employed professionals under $132,900: FEIE usually simplifies the picture. High earners: close call, model it with a specialist. Passive income / retirees: FTC only (FEIE doesn't apply to passive income). Run the FEIE vs FTC calculator.
2. Check whether your E33G stay will exceed 183 days. If yes, understand your Indonesian tax residency obligations — NPWP registration and SPT filing. Get local Indonesian tax guidance before day 183, not after.
3. Open a US brokerage account accessible from Indonesia before departing. Interactive Brokers commonly serves US expat clients in Indonesia. Confirm your US brokerage will maintain your account while you are an Indonesian resident — some custodians will not. Transfer positions before the move.
4. Eliminate exposure to reksa dana and IDX ETFs. Every Indonesian mutual fund is a PFIC. Sell any Indonesian-fund positions before moving and replace with US-domiciled ETFs (VTI, VXUS, BND). Model the §1291 interest cost vs current-year liquidation using our PFIC calculator.
5. Understand SE tax before structuring your business. No US-Indonesia totalization agreement means full 15.3% SE tax on self-employment income regardless of how long you live in Indonesia. Model entity structures (sole proprietor vs PT PMA) before operating in Indonesia. See our self-employed expat guide.
6. Understand BPJS §402(b) if employed by an Indonesian entity. Employer contributions to JHT and JP are taxable US compensation in the year vested. Factor this into compensation negotiations and US withholding planning.
7. Research property ownership before buying. Understand which title (Hak Pakai vs leasehold vs PT PMA) applies to your situation, the residency-permit requirements, and the CFC implications of PT PMA ownership. Engage an Indonesian notary and a US expat tax attorney before signing any property agreement.
8. Set up FBAR tracking from the day you open your first Indonesian account. Every account in Indonesia — bank, brokerage, BPJS — is a potential FBAR and Form 8938 reporting obligation. Keep a running balance log; the $10,000 FBAR threshold is easily exceeded.
9. Sever your prior US state domicile before departing. Change your driver's license to a no-income-tax state (or confirm a clean break from your current state). Close a New York or California "permanent place of abode" before you establish Indonesian residency. The state residency guide has the full checklist.
10. Review Social Security and Medicare implications. No totalization agreement means your time in Indonesia does not count toward US Social Security quarters. Also review Medicare Part B enrollment — overseas residence does not exempt you from late-enrollment penalties when you eventually return. See our Social Security guide and Medicare guide.

What an Indonesia-Specialist Expat Advisor Handles

A US generalist advisor will often decline non-resident clients or miss the BPJS §402(b) and PT PMA CFC traps. An Indonesian financial advisor will recommend reksa dana and local investment products — creating PFIC complications. A US-licensed, fee-only advisor who works with US citizens in Indonesia handles:

• FEIE vs FTC decision modeling specific to your income level, income sources, and filing status
• E33G tax residency analysis — Indonesian NPWP registration, SPT obligations, and double-taxation coordination
• BPJS §402(b) employer contribution treatment, account tracking, and JHT withdrawal basis planning
• Portfolio PFIC remediation — replacing reksa dana with US-domiciled ETFs, modeling §1291 vs mark-to-market election cost
• PT PMA structure analysis — CFC vs check-the-box, Form 5471, NCTI/Subpart F planning
• Indonesian property ownership — Hak Pakai vs leasehold, §121 exclusion, PPh Final FTC analysis, currency gain on IDR mortgage
• FBAR, Form 8938, Form 8621, and Form 5471 preparation and coordination with your US accountant
• US-Indonesia treaty Article 18 pension analysis and Form 8833 disclosures
• SE tax structure optimization and entity-structure comparison
• Social Security and Medicare enrollment timing
• State domicile severance documentation

1. Indonesian Income Tax Law No. 36 of 2008 (UU PPh), as amended by Law No. 7 of 2021 (HPP Law — Tax Harmonization Law): 183-day tax residency rule, worldwide income taxation for residents, progressive PPh 21 brackets (5/15/25/30/35%), PTKP IDR 54,000,000 for individual filers. Unchanged for 2026. Directorate General of Taxes (DJP): pajak.go.id
2. IRS Rev. Proc. 2025-67: Foreign Earned Income Exclusion limit for 2026 = $132,900. IRS Publication 54, Tax Guide for US Citizens and Resident Aliens Abroad. irs.gov/publications/p54
3. IRC §901–§905; IRS Form 1116 Instructions (2026). Foreign Tax Credit framework, §904 income-basket limitation, 1-year carryback / 10-year carryforward. irs.gov/forms-pubs/about-form-1116
4. IRS Notice 2026-25: Foreign housing cost exclusion and deduction — adjusted limitation amounts for 2026. Base housing amount = $21,264 (16% × $132,900). Jakarta and Bali do not appear among the listed high-cost locations with elevated caps. irs.gov/irb
5. Indonesian Government Regulation No. 45 of 2021 and Immigration Law No. 6 of 2011 (amended): E33G Remote Worker Visa (Conitas Visas) authorization, income and insurance requirements, 1-year renewable validity. Indonesia Directorate General of Immigration: imigrasi.go.id
6. US-Indonesia Income Tax Treaty: signed July 11, 1988; entered into force February 1, 1997. IRS treaty text and technical explanation. Saving clause in Article 1 preserves US taxing rights over US citizens. Dividend withholding reduced to 10%/15% (Article 11); interest to 10% (Article 12); royalties 10–15% (Article 13). irs.gov — US-Indonesia treaty text
7. Social Security Administration (SSA), International Programs: US Totalization Agreements. Indonesia does not appear on the SSA's list of countries with US Totalization Agreements (currently 30 countries). ssa.gov/international/agreements_overview.html
8. IRC §1401; IRS Publication 334, Tax Guide for Small Business (2026). Self-employment tax rate: 12.4% Social Security (capped at $184,500 SS wage base in 2026) + 2.9% Medicare (uncapped). Self-employed persons deduct half the SE tax under §164(f). 2026 SS wage base per IRS Rev. Proc. 2025-67. irs.gov/publications/p334
9. BPJS Ketenagakerjaan (BP Jamsostek): Government Regulation No. 44 of 2015 on Workers Social Security Program and Regulation No. 46 of 2015 on the Old-Age Savings Program (JHT). PP 37/2021 on JHT withdrawal rules. Foreign workers with employment KITAS working 6+ months required to participate in JKK, JKM, JHT, JP, and BPJS Kesehatan. Contribution rates unchanged for 2026. bpjsketenagakerjaan.go.id
10. IRC §1297 (PFIC definition); IRS Form 8621 Instructions. Indonesian reksa dana (mutual funds) and Indonesian-domiciled ETFs listed on IDX generally meet the PFIC income or asset test. Individual IDX-listed company stocks are not PFICs. irs.gov/forms-pubs/about-form-8621
11. Indonesian Basic Agrarian Law No. 5 of 1960 and Government Regulation No. 18 of 2021 (land rights): Hak Milik reserved for Indonesian citizens; Hak Pakai available to foreign nationals with residency permits; Hak Sewa as contractual leasehold. PP 28/2025 updated licensing framework. atrbpn.go.id — National Land Agency
12. BKPM (Indonesia Investment Coordinating Board) / OSS: PT PMA minimum paid-up capital IDR 2.5 billion (approximately USD 150,000 at USD/IDR 16,000) as of the October 2025 regulatory revision to Government Regulation No. 10 of 2021. CFC definition under IRC §957: US person owning 50%+ of foreign corporation. Form 5471 penalties under IRC §6038. NCTI (formerly GILTI) under OBBBA effective January 2026. bkpm.go.id — Indonesia Investment Coordinating Board

US tax values verified as of June 2026 against IRS.gov, SSA.gov, and IRS Revenue Procedures. Indonesian tax rates per DJP (pajak.go.id) for 2026 tax year; brackets unchanged under HPP Law. BPJS contribution rates per BPJS Ketenagakerjaan 2026 schedule. PT PMA capital requirements per BKPM October 2025 regulation. Exchange rates illustrative at approximately USD/IDR 16,000 and will vary. This guide is for informational purposes and does not constitute tax or financial advice.