Frequently Asked Questions: #dormant-pma-company-tax-reporting-obligations

Yes. This is one of the most common — and most expensive — misunderstandings among foreign company owners in Indonesia. A registered company’s filing obligations run with its tax number, not with its level of business activity. Key points:

• Nil returns are still returns: a company with no transactions must still file “nil” (zero) tax returns. For a VAT-registered (PKP) company, the monthly VAT return is mandatory every month without exception, even with zero transactions — a position the tax office restated in January 2026 specifically for companies that have not yet started, or have stopped, business activity.

• December employee tax return is always required: the December PPh 21 return must be filed even if nil, as it doubles as the annual employee reconciliation.

• Narrow reliefs exist: the unified withholding return (PPh Unifikasi) may be skipped in a month with genuinely no transactions, and a nil PPh 25 instalment needs no separate filing.

• The cost of not filing accumulates quickly: late-filing fines are IDR 500,000 per missed monthly VAT return and IDR 100,000 per other return. A dormant VAT-registered company that files nothing for a year accrues roughly IDR 6 million in fines before any tax or interest, and unresolved defaults escalate to collection letters (STP), formal requests for explanation (SP2DK), and ultimately a tax audit.

• Investment reporting continues too: a dormant PMA usually also stops filing its quarterly LKPM investment reports — and repeated non-filing or nil-realisation reports are themselves sanction triggers under the investment regulations, escalating as far as revocation of the business licence.

• The clean route to going quiet: a company that genuinely intends to cease activity can apply for non-active taxpayer status (Wajib Pajak Nonaktif), which suspends filing obligations once granted — prospectively only, never retroactively. Alternatively, formal liquidation ends the obligations permanently.

Okusi Associates provides a zero-activity tax reporting service that keeps dormant companies fully compliant at minimal cost, covering all mandatory nil returns and LKPM filings. See also the guide to monthly tax reporting for PMA companies.

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