2026-09-12 · 5 min read
2026-09-12 · 5 min read
Najat Brahim
Founder, Noha Ventures · 2026-09-12 · 5 min read
Key facts
A PT PMA earning under IDR 4.8 billion (~€280,000) per year in rental revenue pays 11% corporate income tax on net profit. Effective bite on gross revenue typically lands at 4 to 7%.
Also owed: annual PBB property tax, monthly VAT filings if VAT-registered, and withholding tax on dividend distributions to the foreign shareholder.
Most European tax authorities tax worldwide rental income; a double-tax treaty usually credits the Indonesian tax paid. Confirm with a home-country tax adviser.
The headline number is 11%. As a foreign investor holding a Lombok villa through a PT PMA, the main ongoing tax you pay on rental income is 11% of net profit. That's it, not a stack of hidden charges, not layered brackets. One rate applied to what's left after operating costs.
What counts as net profit. Net profit is the rental revenue your villa generates minus the legitimate operating costs: management fees, cleaning, maintenance, utilities, insurance, marketing, and depreciation. Only what remains is what the 11% is calculated on. That's why bookkeeping and monthly reports matter, every real expense properly documented reduces the taxable base.
Who files it. Your PT PMA files monthly and annual tax returns with the Indonesian tax authority (DGT). At Noha, our management service handles all of it, the accounting, monthly closes, tax filings, and communication with the tax office. You receive a clean quarterly report showing revenue, costs, taxes paid, and distributable income. No paperwork on your end.
Property tax (PBB). There is also an annual property tax called PBB, Pajak Bumi dan Bangunan, which is a small percentage of the assessed value of the land and building. For a Kuta villa, this typically comes to a few hundred euros per year and is included in the operating costs your management service pays on your behalf.
When you sell. If you sell the villa at a profit in the future, a capital gains tax applies on the sale. The exact treatment depends on how the sale is structured (share transfer of the PT PMA vs. asset sale). We work with local tax advisors to structure the exit efficiently when the time comes.
The bottom line. The Indonesian tax framework for PT PMA-owned rental villas is simple by international standards: 11% of net profit, plus a nominal annual property tax, plus capital gains on eventual sale. Everything is filed through your PT PMA by a local accountant (owner-paid, coordinated by Noha but billed directly to you). This article is a general overview, for your specific situation, we always recommend confirming with a licensed Indonesian tax advisor.
Founder, Noha Ventures
Najat leads Noha Ventures, a boutique villa developer in Kuta, South Lombok. She writes about how foreigners can buy, own and operate property in Indonesia.
Answers to what most readers ask after this article.
Corporate income tax of 22% on net profit (reduced from 25% since 2022, further reduced to 11% for revenue under IDR 4.8 billion). Monthly VAT filings if the PT PMA is VAT-registered. Annual property tax (PBB) on the land. Withholding tax on any dividend distributions to the foreign shareholder.
For a boutique villa PT PMA turning under IDR 4.8 billion (roughly €280,000) in annual rental revenue, the effective rate on net profit is 11%. Net profit is revenue minus operating costs (management fee, cleaning, utilities, depreciation, accountant, PBB). The effective bite on gross revenue typically lands in the 4 to 7% range.
Usually yes. Most European tax authorities tax worldwide rental income for their tax residents, then credit tax already paid in Indonesia (subject to the relevant double-tax treaty). Consult a tax adviser in your home country.
On the Indonesian side, the sale of the villa (or the PT PMA shares) is taxed at the corporate rate on the gain. On the home-country side, capital gains treatment depends on your residency and the applicable treaty. Plan the exit structure with the tax adviser well before the sale.
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