What tax do you owe on villa rental income in Bali?

Income tax

Resident individual with an NPWP: 10% final under PPh Pasal 4(2) on gross rental of land and buildings. Final means it is settled — no further income tax on that stream.

Non-resident: 20% under PPh Pasal 26, withheld.

Inside a PT PMA: rental is corporate income, taxed at 22%, with the small-business discount available under the turnover threshold. Not 10%. This surprises people who chose the company structure for other reasons.

The tax almost nobody remits

PB1 / PHR — 10% regional accommodation tax on short-term accommodation. It applies to villa rentals in Badung and across Bali's tourism regencies.

Airbnb does not collect it. Booking.com does not collect it. It is on you to register and remit.

This is the single most common compliance failure among foreign villa owners in Bali, and it is the one that surfaces during a licensing check.

Treaties will not save you

A common assumption is that a double tax treaty with your home country reduces Indonesian tax on your Bali rental. It does not. Under Article 6 of the standard treaty model, income from immovable property is taxable in the country where the property sits. Indonesia keeps full taxing rights.

Your home country may credit what you paid here. Indonesia's share does not shrink.

VAT

Registration as a PKP becomes mandatory above IDR 4.8 billion in turnover. Most individual villa owners are nowhere near it. Operators running several properties should check.

The enforcement picture

Rental income enforcement tightened sharply through 2025 and 2026. Platform listings are visible, licensing is being checked, and the 31 March 2026 deadline requiring all short-term rentals on booking platforms to be licensed created an obvious cross-reference between listings and registrations.

The combination that gets people caught is not one missing filing. It is an unlicensed property, listed publicly, generating undeclared income, with no PB1 remitted — four failures that all point at each other.

Getting compliant costs a fraction of getting caught. The properties being sealed in Bali right now are not sophisticated tax structures. They are ordinary villas whose owners assumed nobody was looking.