2026-10-23T18:50:32

Construction Services Final Income Tax Indonesia 2026: 1.75%, 2.65%, 4% and VAT

2026年印尼建筑服务最终所得税：1,75%、2,65%、4% 税率与工程 PPN

Construction services final income tax Indonesia 2026 still follows PP 9/2022, effective since 21 February 2022: contractors 1.75% (certified small firms), 2.65% (medium, large, specialist) or 4% (uncertified), and construction consulting 3.5% or 6%, per the Directorate General of Taxes. For project buyers and building owners, these rates affect the net contract value and who withholds the tax. This article summarises the rates, a Rp1 billion example and VAT as of 23 October 2026; it is not tax advice.

Construction services final income tax Indonesia 2026: PP 9/2022 rates, withholding and VAT

Item	Rule	Basis	homeX note	Source
Construction contractor	1.75% (small qualification); 2.65% (medium, large, specialist); 4% (no certificate)	PP 9/2022; DJP page on PPh Article 4(2)	An uncertified contractor pays the top rate, so check the certificate before signing	Ditjen Pajak
Integrated construction	2.65% (with business certificate); 4% (without)	DJP press release, 25 February 2022	The 2.65% rate was newly added by PP 9/2022	Ditjen Pajak
Construction consulting	3.5% (with business qualification); 6% (without)	PP 9/2022; DJP page	Relevant to design and supervision fees; do not mix with contractor rates	Ditjen Pajak
Who withholds and pays	The service user withholds PPh Article 4(2), issues the withholding slip via e-SPT, pays with billing code MAP KJS 411128-409 and reports via DJP Online	DJP page on PPh Article 4(2)	For an individual homeowner, confirm the withholding duty with a tax adviser or tax office; we did not verify this case	Ditjen Pajak
Example on a Rp1 billion service value	1.75% = Rp17.5 million; 2.65% = Rp26.5 million; 4% = Rp40 million	homeX calculation from DJP rates	Assumes the rate applies to the service value in the contract; we did not read the tax base in the PP 51/2008 text	Ditjen Pajak
VAT on services and goods	VAT rate of 12% applies from 1 January 2025; for non-luxury goods/services the base is 11/12 of the selling price, so the burden equals 11%	DJP press release on VAT 2025	Rp1 billion example: 12% x 11/12 = Rp110 million (homeX calculation). We did not read PMK 11/2025 directly; confirm with the VAT-registered seller	Ditjen Pajak
Rate evaluation	PP 9/2022 requires evaluation after 3 tax years; the Ministry of Finance said evaluation was under way in September 2025	DDTC News, 22 September 2025	We found no replacement rule as of 23 October 2026, but that is not a guarantee; check pajak.go.id before a large contract	DDTC News

Sources: Directorate General of Taxes pages on PPh Article 4(2) and the 25 February 2022 press release (PP 9/2022 rates), DDTC News of 22 September 2025 (evaluation), DJP VAT 2025 press release (12% rate and 11/12 base). Data gaps: we did not read the text of PP 51/2008, PP 9/2022 and PMK 11/2025 directly; tax treatment of materials bought separately from a shop (not a turnkey package) and the duties of an individual homeowner were not verified; the Rp1 billion example is a homeX calculation. Not tax advice. Data as of 23 October 2026.

Effect of the rate on comparing contractor quotes

homeX analysis: two quotes with the same number can differ in net value if one contractor is a certified small firm (1.75%) and the other is uncertified (4%). On a Rp1 billion service the gap is Rp22.5 million (40 million minus 17.5 million). So the RFQ should ask for the business certificate, qualification (small, medium, large) and VAT-registered status, and state whether the price includes VAT and the final income tax.

Linking tax to the contract and payments

Write into the contract who bears VAT and the final income tax, when the withholding slip is handed over, and whether instalment payments are reduced by tax. Renovation contracts with contractors are covered in the homeX Article 47 of Law 2/2017 piece; cost per m2 and labour rates can be compared with the building cost and daily wage articles.

Buyer tips

Ask for the contractor business certificate and qualification before comparing prices.
State in the RFQ whether the price includes VAT and the final income tax.
Keep the withholding slip and billing code as project records.
Check pajak.go.id before a large contract because the PP 9/2022 rates are under evaluation.

Request a construction services final income tax Indonesia 2026 quote for your project

homeX can compare several brands at once and prepare a written quote for projects, renovations or shop stock. Send your needs (brand, size, quantity, location) via WhatsApp +62 821 1818 998, or visit the homeX showroom: Priskilla Tower, 6th floor, Jl. Atang Sanjaya No.21, Benda, Kota Tangerang, Banten 15125. Visit the homeX Showroom.

Disclaimer: prices change without notice and differ by store, city, pack size, grade and promotion. Data as of 23 October 2026; always confirm with the seller before buying.

FAQ

What is the construction services final income tax rate in 2026? Per DJP (PP 9/2022): contractors 1.75% for certified small firms, 2.65% for medium, large and specialist, 4% without a certificate; consulting 3.5% or 6%.

Who withholds the construction final income tax? The service user withholds PPh Article 4(2), issues the slip via e-SPT and pays with billing code MAP KJS 411128-409 (DJP). The case of an individual homeowner should be confirmed with the tax office.

Can these rates change? PP 9/2022 requires evaluation after 3 years; the Ministry of Finance said evaluation was under way in September 2025 (DDTC). We found no replacement rule as of 23 October 2026.