Indonesia beaches and temples
Destination guide

Leaving Australia for Indonesia?
Here's what your move is actually worth.

Defensible exit planning for Australian high earners relocating to Indonesia. No vague promises — just the numbers, the rules, and the evidence that holds up.

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AU-Indonesia DTA (1992) · Progressive tax to 35% · No CGT for individuals · Second Home Visa 5–10yr
The numbers

What leaving for Indonesia actually costs — and saves

Every calculation below uses the same assumptions the ExitProof calculator applies when you select "Indonesia" as your destination. These are not optimistic projections — they reflect current ATO rules (ITAA36 s6(1), TR 2023/1) and Indonesian tax law (UU PPh) as of 2024-25.

Key assumptions
AU personal income tax37% / 45% / 47% marginal (2024-25)
Indonesia income tax5–35% progressive (UU PPh 2007, as amended), no CGT for individuals
Indonesia corporate tax22% standard rate (PP 1/2024), lower for qualified SMEs
AU CGT event at departureITAA97 s855-1 — accrued gains crystallise at cessation of residency
Investment growth rate7% p.a. (illustrative — used to size CGT exit cost only)
AU non-resident CGT on shares0% from date residency ceases (s855-25 ITAA97)
Income Tier 1
Senior manager, married, $450k in ETFs/shares, renting in Sydney
Stay in Australia
5-year cumulative tax paid$387,500
10-year cumulative tax paid$847,500
Leave for Indonesia (year 1)
5-year cumulative tax paid~$72,000*
10-year cumulative tax paid~$148,000*
Leave vs. stay, 10-year +$699,500

* Includes one-time CGT exit event (~$40k). Indonesia has no capital gains tax for individuals — share disposals and investment gains post-residency are not subject to Indonesian CGT. Progressive income tax applies to employment and business income. Non-resident CGT on shares = 0% from departure date. Bali's cost of living significantly below Sydney.

Income Tier 2
Executive, two kids, $800k portfolio (shares + AU property), rental income
Stay in Australia
5-year cumulative tax paid~$830,000
10-year cumulative tax paid~$1,820,000
Leave for Indonesia (year 1)
5-year cumulative tax paid~$128,000*
10-year cumulative tax paid~$246,000*
Leave vs. stay, 10-year +$1,574,000

* Exit CGT on $800k portfolio: ~$75k. Indonesia's lack of individual CGT is a genuine structural advantage. Investment gains and share disposals post-residency are not Indonesian-taxed. Australian rental income remains Australian-sourced; DTA provides double-taxation relief but does not eliminate ATO claims on Australian property income.

Income Tier 3
Founder/exec, significant equity, $2M+ investable assets, AU property portfolio
Stay in Australia
5-year cumulative tax paid~$1,310,000
10-year cumulative tax paid~$2,870,000
Leave for Indonesia (year 1)
5-year cumulative tax paid~$228,000*
10-year cumulative tax paid~$395,000*
Leave vs. stay, 10-year +$2,475,000

* CGT exit event on $2M portfolio: ~$140k. At $2M+ income, Indonesia's top rate of 35% applies to employment and business income. No individual CGT is a key advantage for investment-heavy profiles. DTA with Australia provides double-taxation relief. Bali/Ubud lifestyle cost significantly below Sydney.

All figures are indicative. Indonesia's lack of individual CGT is a significant structural advantage for investment-heavy profiles. Factor in living costs (Bali is substantially cheaper than Sydney), Second Home Visa requirements, and personal circumstances. Run your exact numbers →
Indonesian residency mechanics

How Indonesian tax residency actually works

How Indonesia determines tax residency

You are an Indonesian tax resident if you meet either of two criteria: (1) you have a place of residence in Indonesia (rumah tangga) OR (2) you are present in Indonesia for more than 183 days in a taxable year (January 1–December 31). Indonesian residents are taxed on worldwide income under UU PPh (Undang-Undang Pajak Penghasilan — Income Tax Law).

Concept Threshold Relevance for Australian high earners
183-day rule 183+ days physically present in Indonesia in a taxable year Primary trigger for Indonesian tax residency
Place of residence A permanent place of residence in Indonesia triggers residency even below 183 days Owning or long-term leasing property in Indonesia creates this alternative trigger
Worldwide income Employment, self-employment, dividends, interest, rental, capital gains Indonesian residents taxed on global income; DTA credit available for foreign tax paid
No individual CGT Indonesian individuals do not pay capital gains tax on asset disposals Key structural advantage — investment gains post-residency not Indonesian-taxed

Second Home Visa — Bali/Indonesia residency

Indonesia's Second Home Visa (launched 2023 under Presidential Regulation 31/2023) offers 5–10 year renewable visas for qualified foreign nationals. Replaced the old Second Home Visa (KITAS) programme with new requirements.

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Financial requirements
IDR 2B (~$USD 125k / ~AUD 190k) deposit in an Indonesian bank account (verified at application); proof of accommodation (property ownership or lease in Indonesia); health insurance with Indonesian coverage; valid passport (minimum 6 months). 5 or 10-year options. Renewable. Requires Indonesian tax registration (NPWP — Nomor Pokok Wajib Pajak) once resident.
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Property ownership
Foreign nationals can own property under Hak Pakai (right to use) or through a PT PMA (foreign investment company). Freehold ownership is not available to foreign individuals — Hak Pakai is the standard approach. Property purchase for Second Home Visa applicants must meet minimum value requirements (varies by location — Bali requires higher values than some other regions).
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Bali vs. other Indonesian cities
Most Australian expats in Indonesia settle in Bali (Canggu, Seminyak, Ubud, Sanur). Jakarta is the financial centre but significantly more expensive. Lombok and other islands are emerging options. Bali's Bali 第二 home visa community, international schools, and healthcare access make it the primary destination for Australian high earners. Yogyakarta and other cities offer lower costs but fewer expat support structures.
Indonesia income tax rates 2024

Indonesia's progressive personal income tax rates under UU PPh (as amended): 5% on first IDR 60M (~AUD 5,800), 15% on IDR 60M–250M (~AUD 5,800–24k), 25% on IDR 250M–500M (~AUD 24–48k), 30% on IDR 500M–5B, and 35% on income above IDR 5B (~AUD 480k+). This means high Australian earners (AUD 400k+) will likely face Indonesia's top 35% rate. No CGT for individuals — a key structural advantage over most other destinations. Reference: DJP — Indonesian Directorate General of Taxes

Why it matters for your exit plan: Indonesia's 35% top rate on high incomes means the tax savings versus Australia are meaningful but not dramatic at $400k+. The genuine value proposition is: (1) no individual CGT — investment gains compound tax-free in Indonesia; (2) significantly lower cost of living in Bali; (3) DTA with Australia provides double-taxation relief; (4) quality of life. At $2M+ investable assets, the lack of CGT becomes the dominant financial factor over a 10-year horizon.
ATO residency tests

The 4 ATO statutory tests applied to an Indonesia move

Under s6(1) ITAA36, you are an Australian tax resident if you satisfy any one of four tests. You must fail all four to be a genuine non-resident. The ordinary concepts test is the battleground.

Test What it asks Indonesia-mover risk
1. Ordinary concepts Does your presence in Australia feel "usual and settled" — or temporary and casual? HIGH — Bali's "digital nomad" culture means frequent returns to AU + remote work patterns can sustain ordinary concepts argument
2. Domicile Is your domicile in Australia? (Presumed yes unless you establish a permanent place of abode overseas AND intend to stay) MEDIUM — Second Home Visa + Indonesian property + declared intent counters domicile; property purchase under Hak Pakai is itself strong evidence
3. 183-day test Have you been physically present in Australia for 183+ days in the income year? LOW — if you actually live in Bali (183+ days), you'll fail this
4. Superannuation test Does your employer pay compulsory superannuation contributions in Australia? MEDIUM — remote work for AU employer may still generate AU super contributions if employer remains AU-based
The AU-Indonesia DTA (1992) is a key asset. This treaty (in force 1995) provides a tie-breaker for dual residents and limits double taxation through a credit mechanism. If you're genuinely an Indonesian tax resident (183+ days OR place of residence in Indonesia) and the ATO contends you're still Australian resident, the DTA provides a structured resolution. Reference: TR 2023/1 para 20 on the six-factor ordinary concepts matrix.
Common mistakes

What Sydney-siders get wrong about a Bali move

01
"I'll just work remotely and visit Australia regularly"
Bali's digital nomad culture creates a specific ATO risk: frequent returns to Australia for "work" trips, school holidays, and family visits combined with remote work patterns can sustain the ordinary concepts argument that Australia remains your "usual" place. The ATO is aware of this pattern and weighs it heavily for Australian remote workers in Bali.
Mitigation: Keep AU visit days under 30 per income year. Track days meticulously. Build strong Indonesian centre-of-life evidence: Second Home Visa, property under Hak Pakai, Indonesian bank account as primary account, school enrolment (if applicable), social memberships. Bali's expat community provides real evidence of settled life if documented properly.
02
Not understanding the "place of residence" alternative trigger
Indonesia's tax residency is triggered by EITHER 183+ days of physical presence OR a "place of residence" in Indonesia. Buying a villa or long-term leasing property in Bali triggers Indonesian tax residency even if you spend less than 183 days there. Many Australians buy property in Bali thinking they can manage it as a "holiday home" while working remotely — this creates unexpected Indonesian tax obligations.
Mitigation: Understand that property ownership or long-term lease in Indonesia creates a tax residency trigger regardless of days spent. If you want to spend fewer than 183 days in Indonesia without triggering residency, avoid establishing a permanent place of residence. Consult an Indonesian tax lawyer before purchasing property in Bali.
03
Indonesian income tax on investment income is misunderstood
Indonesian residents are taxed on worldwide income — this includes investment income (dividends, interest) from outside Indonesia. However, Indonesia has specific rules about whether and how foreign investment income is taxed, and tax treaty credits may apply. Many Australians incorrectly assume their Australian share portfolio income will be invisible to Indonesia — it may not be.
Mitigation: Understand Indonesia's worldwide income taxation for residents. Dividend and interest income from Australian investments may be subject to Indonesian income tax at your marginal rate (up to 35%). DTA with Australia provides a credit mechanism to prevent pure double taxation. Work with an Indonesian tax advisor on your specific income structure.
04
AU bank accounts as primary accounts
Australian bank accounts used as primary transaction accounts signal Australian economic integration. An Indonesian Bank BTPN, Bank Central Asia (BCA), or Bank Permata account with regular income credits and local expenditure demonstrates the opposite. The ATO weighs financial integration heavily — maintaining AU accounts as primary is a common mistake that undermines the exit position.
Mitigation: Open an Indonesian bank account and use it as your primary transaction account. Indonesian banks (BTPN, BCA, Bank Permata, Bank Mandiri) can be set up with a KITAS (residence permit). Use Australian accounts for passive investment only. Document the transition in your evidence file.
05
Not getting NPWP (Indonesian tax ID)
Once you're an Indonesian tax resident (triggered by 183+ days or place of residence), you are required to register with the Directorate General of Taxes (DJP) and obtain an NPWP (Nomor Pokot Wajib Pajak — tax file number). Failure to register is a compliance violation. Many Australians on Second Home Visas don't realise this is mandatory — the visa creates the residency, the tax ID follows from that.
Mitigation: Register for NPWP once you trigger Indonesian tax residency. Work with an Indonesian tax agent (konsultan pajak) to handle annual filings. Annual income tax returns (SPT Tahunan) are required for all Indonesian tax residents. The DTA with Australia provides relief on Australian tax paid as a credit against Indonesian tax on the same income.
The DTA layer

Australia-Indonesia DTA — what it actually provides

The Australia-Indonesia Double Tax Agreement was signed in 1992 and came into force in 1995. It provides the key protections relevant to Australian expats in Bali and broader Indonesia.

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DTA provides a tie-breaker
The 1992 DTA includes a residence tie-breaker clause for dual residents. If you're genuinely an Indonesian tax resident (183+ days OR place of residence in Indonesia) and the ATO contends you're still an Australian resident, the DTA provides a structured mechanism to resolve the dual residency question. This is a meaningful advantage over no-DTA destinations like the UAE.
Reference: ATO Tax Treaties list
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DTA limits double taxation
The DTA provides a tax credit mechanism so that income taxed in both Australia and Indonesia can be relieved — you don't pay both full rates on the same income. Indonesia taxes worldwide income for residents; the DTA credit prevents this from creating pure double taxation. However, Indonesian tax on Australian-sourced income still applies up to the DTA credit amount — the credit offsets Australian tax, not Indonesian tax.
The practical implication: Indonesia's DTA with Australia is a meaningful asset — a tie-breaker and double-taxation relief. But like all DTAs, it only applies if you're a genuine Indonesian tax resident first. The evidence file (Second Home Visa, property, Indonesian bank accounts, social ties) must establish genuine Indonesian residency before the DTA can help. Build the evidence first; the DTA supplements it.
Evidence checklist

What a counsel-ready Indonesia evidence file looks like

Each item directly addresses one of the six ordinary concepts factors (TR 2023/1 para 20). Indonesia's DTA with Australia provides a backstop — but only if ordinary concepts evidence establishes genuine Indonesian residency first.

Identity & Residency Status
  • ☐ Second Home Visa (5 or 10-year — approved KITAS)
  • ☐ Indonesian NPWP (Nomor Pokok Wajib Pajak — tax identification number from DJP)
  • ☐ Indonesian passport stamps (entry/exit — full passport history)
  • ☐ KITAS/KITAP (residence permit card — front and back)
  • ☐ Copy of departure travel booking from Australia
Accommodation (strongest ordinary concepts evidence)
  • ☐ Hak Pakai (right to use) certificate or PT PMA share ownership for property in Bali/Indonesia
  • ☐ Property tax receipts (PBB — Pajak Bumi dan Bangunan) in your name
  • ☐ Utility bills in your name (PLN electricity, PDAM water from Indonesian providers)
  • ☐ Long-term tenancy agreement (if leasing rather than owning)
Financial (economic centre of life)
  • ☐ Indonesian bank account statements (3+ years — BTPN, BCA, Bank Permata, Bank Mandiri)
  • ☐ Indonesian credit card statements showing regular local expenditure
  • ☐ Indonesian health insurance policy (mandatory for Second Home Visa)
  • ☐ Indonesian investment account statements (reksadana, Indonesian securities accounts)
  • ☐ Second Home Visa deposit confirmation (IDR 2B+ in Indonesian bank)
Employment & Business
  • ☐ Remote work contract with overseas employer (if working remotely on Second Home Visa)
  • ☐ Indonesian business identification (NIB — Nomor Induk Berusaha from OSS system)
  • ☐ Indonesian tax returns filed (SPT Tahunan — annual tax return)
  • ☐ Evidence of Indonesian economic activity (local business relationships, client engagements in Indonesia)
Family & Social Ties
  • ☐ Children's school enrolment in Bali (Bali sunrise school, Gajah Mada, or international options)
  • ☐ Indonesian health insurance policy (mandatory for Second Home Visa)
  • ☐ Gym, coworking membership, golf club, or social memberships in Bali/Indonesia
  • ☐ Indonesian mobile number (active, postpaid plan — Telkomsel, XL, Indosat in your name)
  • ☐ Community group, religious organisation, or charity involvement in Indonesia
Day-Count Tracking
  • ☐ Annual day-count log: dates in/out of Australia and Indonesia
  • ☐ Passport scans of all entry/exit stamps (Indonesia and Australia)
  • ☐ Second Home Visa compliance: 183+ days or clear place of residence documentation
  • ☐ Flight itineraries for all international travel
  • ☐ Bali coworking receipts, local business meeting records (showing Indonesian economic activity)
See a sample evidence file → Evidence file export included with Stage 2 Exit Planning ($197/mo)
Compare destinations

Indonesia vs. Dubai vs. Thailand vs. staying in Sydney

Headline numbers. Run the full comparison →

Indonesia (Bali) Dubai Thailand Stay in Sydney
Personal income tax 5–35% progressive 0% 0–35% (remittance basis) 37%–47%
Individual CGT None None Income tax on remitted gains N/A
AU non-resident CGT on shares 0% 0% 0% N/A
DTA with Australia Yes (1992 DTA) None Yes (2019 DTA) N/A
Evidence burden Medium (DTA tie-breaker) High (no treaty) Medium (DTA) N/A
Cost of living Very low (Bali) High (Dubai) Low–Medium Very high
10yr leave-vs-stay delta (~$400k earner) ~+$1.57M ~+$1.69M ~+$1.62M* Baseline

* Thailand figures include Thai income tax on remitted foreign income. Indonesia's no-CGT advantage compounds significantly for investment-heavy profiles — this is not fully captured in the income-tier calculations. Bali's very low cost of living (vs. Dubai or Sydney) adds real quality-of-life value on top of the financial modelling.

Run your numbers →
FAQ

Common questions about moving to Bali / Indonesia

Is Bali/Indonesia tax-free on investment gains?
Indonesia has no capital gains tax for individuals — share disposals, property sales, and other capital gains by Indonesian individuals are not subject to Indonesian CGT. This is a genuine structural advantage similar to Malaysia. However: Indonesian residents are taxed on worldwide income, so dividends, interest, and rental income from overseas may be taxable in Indonesia (at your marginal rate up to 35%). DTA with Australia provides a credit mechanism. Reference: DJP — Indonesian Directorate General of Taxes
What is the Second Home Visa and does it guarantee tax residency?
Indonesia's Second Home Visa (Presidential Regulation 31/2023) offers 5 or 10-year renewable visas requiring IDR 2B (~AUD 190k) deposit in an Indonesian bank, proof of accommodation, health insurance, and valid passport. It does not automatically grant Indonesian tax residency — you still need 183+ days OR a place of residence in Indonesia. The visa plus property under Hak Pakai creates the residency trigger. The financial requirements are significantly more accessible than Malaysia's MM2H programme.
Can I work remotely on a Second Home Visa?
The Second Home Visa is a social/retirement-style visa — it does not explicitly authorise working (employment or running a business in Indonesia). Remote work for an overseas employer may be possible but requires careful structuring. If you plan to generate Indonesian-sourced income (working for Indonesian clients, operating an Indonesian business), you need the appropriate business visa or work permit. Consult an Indonesian immigration lawyer for your specific situation.
What is the AU-Indonesia DTA's position on Australian rental income?
Australian real property generates Australian-sourced income regardless of where you reside. Under the 1992 AU-Indonesia DTA, rental income from Australian real property is taxed in Australia (as the source country). Indonesia taxes worldwide income for residents — the DTA credit mechanism allows you to offset Australian tax paid on that rental income against your Indonesian tax liability on the same income. Pure double taxation is avoided, but Australian tax still applies on AU rental income as the primary taxing right under the DTA.
What does the ATO know about Australian expats in Bali?
Significantly more than most people assume. Australia and Indonesia have a tax information exchange agreement (TIEA) under the DTA. The ATO receives data from Indonesian banks and government agencies through the Common Reporting Standard (CRS) and the TIEA. If you have significant financial accounts in Indonesia, Indonesian-sourced income, or spend significant time in Indonesia, this information is available to the ATO. "They won't find out" is not a viable position — the ATO is actively monitoring Australian expats in Southeast Asia. Build a legitimate, documented exit position.
How does Indonesian residency affect my AU superannuation?
If you cease Australian tax residency, compulsory superannuation contributions from Australian employers will stop. Your existing AU super balance remains under Australian superannuation law. Key considerations: review binding death benefit nominations with a cross-border specialist; Indonesia has its own social security system (BPJS) which you may be required to contribute to if working in Indonesia; your AU super balance is not subject to Indonesian tax on death under the DTA, but estate planning should account for both jurisdictions.
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