Permanent Establishment in Indonesia

Permanent Establishment is a form of business that is used by individuals who do not reside in Indonesia or in Indonesia but no more than 183 (one hundred and eighty three) days within 12 ( twelve) months, or an entity not established and not domiciled in Indonesia, to run a business or conduct activities in Indonesia.

A permanent establishment implies the existence of a place of business, namely a facility that can be in the form of land and buildings including machinery and equipment.

In accordance with Indonesian Taxation Laws, business forms used by Foreign Tax Subjects to conduct business or conduct activities in Indonesia, can be said to be a PE, which can be in the form of:

  • a place of management;
  • branch of the company;
  • a representative office;
  • an office building;
  • a factory;
  • a workshop;
  • a warehouse;
  • a room for promotion and selling;
  • a mining and extraction of natural resources;
  • a mining working area for oil and natural gas;
  • a fishery, animal husbandry, agriculture, plantation, or forestry location;
  • a project of construction, installation, or assembly;
  • the furnishing of services in whatever form by employees or other person, insofar conducted not more than 60 days within a 12-month period;
  • a person or corporation acting as a dependent agent;
  • an agent or employee of an insurance company that is not established and domiciled in Indonesia that receives insurance premiums or insures risk in Indonesia; and
  • the computers, electronic agent, or automated equipment owned, leased, or used by an electronic transactions provider to conduct business via the internet.

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