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Overstay Tourists in Indonesia and Its Tax Implication

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Tourism in Indonesia and Overstay/Residence Permits Violation Cases

Indonesia is the biggest archipelago country in the world. This country has the beauty of exotic islands and cultures, attracting foreign tourists to visit Indonesia (Cholik, 2017). According to the Mundi Index, In 2017, Indonesia was ranked 26Th out of 188 in International tourism rankings. The distribution of the foreign tourist who came to Indonesia can be seen in figure 1

Figure 1 The distribution of Foreign Tourists in Indonesia at The Year of 2016 – 2019


The increase in tourism in 2016 – 2019 is not without reason. The Indonesian Government continues to improve both in terms of infrastructure and regulations. Mariyono (2017) mentioned that since 2016, the Indonesian Government has continued to develop tourist attractions other than Bali, which had become the prima donna of tourism in Indonesia. These places are, Lake Toba in North Sumatra, Mandalika in West Nusa Tenggara, Morotai in North Maluku, Tanjung Lesung in Banten, Labuan Bajo in West Nusa Tenggara, Kepulauan Seribu in DKI Jakarta, Wakatobi in Southeast Sulawesi, Belitung Islands, Bromo-East Java and Jogjakarta.

In terms of regulations, The Government has made some policies, including visa application, especially in visit visas. Those policies were good and very attractive for tourists. But unfortunately, some tourists overstayed or violated the residence permit. Here are some overstay and residence permit violations in Indonesia.

  1. GM, an Italian foreigner, using travel and family union to do business in Mataram for 26 years, had used a visit visa.

  2. Two Chinese foreigners were suspected of working at PT Grentech, South Jakarta. Both of them didn’t have a permit to work in Indonesia. They also had used a visit visa.

  3. KAG, an American, was known to have a visit visa and stayed in Bali. KAG and her partner had online consultation practice for foreigners who wish to live in Bali. They set a price of 50 USD for one consultation. Meanwhile, KAG stated that she never paid taxes to the Indonesian Government through to her Twitter account.

Resident Taxpayers and Non-Resident Taxpayers

As stipulated in the Income Tax Law article 2 verse 3 point a, the term “resident Taxpayer” for individual means

“individual who resides in Indonesia, an individual who has been present in Indonesia for more than 183 (one hundred and eighty-three) days within any 12 (twelve) months period, or an individual who has been residing in Indonesia within a particular taxable year and intends to reside in Indonesia”

Further, PER-34/PJ/2011 explains the terms resides, which means to have a place of residence which can be a permanent dwelling place, a place to do an ordinary course of life, or a place of habitual abode. Foreigners are non-resident taxpayers. However, when the foreigners have met time test criteria, the foreigners will become resident taxpayers.

Taxation Implication

a. Non-Resident Taxpayers

If non-resident taxpayers received or earned income from Indonesia, they would pay taxes referring to Article 26 of the Income Tax Law or Tax Treaty with the relevant partner country.

b. Resident Taxpayers

Foreigners who become resident taxpayers will become Domestic Taxpayers if they have received or earned income from Indonesia as well as outside and the amount of income exceeded the Non-Taxable Income (objective requirements). Every Taxpayer who had fulfilled the subjective and objective according to Indonesian tax law is obliged to register at the office of the Directorate General of Taxes whose work area includes the residence or domicile of the Taxpayer. Those taxpayers are obliged to follow Indonesian tax law.


“Tourists,” who committed violations such as overstayed or violated residence permits in Indonesia, must be subjected to a time test checking to determine whether the tourists are non-resident or resident taxpayers. If the tourists who become non-resident taxpayers received or earned income from Indonesia, they would pay taxes referring to Article 26 of the Income Tax Law or Tax Treaty with the relevant partner country. If the tourists fulfilled the time test and became resident taxpayers, received and earned income from Indonesia as well as outside, and the amount of income exceeded the Non-Taxable Income, they would become domestic taxpayers and obliged to follow Indonesian Tax Law.


BPS. 2019. Statistik Kunjungan Wisatawan Mancanegara Tahun 2019. Jakarta. BPS RI.

Cholik, M. Agus. 2017. The Development of Tourism Industry in Indonesia: Current Problembs and Challanges. European Journal of Research and Reflection in Management Sciences Vol. 5 No.1

Mariyono, Joko. 2017. Determinants of Demand for Foreign Tourism in Indonesia. Jurnal Ekonomi Pembangunan Kajian Masalah Ekonomi dan Pembangunan · July 2017.






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