Taxes on property rentals

JAKARTA (JP): The government, through a finance minister decree, has imposed final income taxes on property rentals in a bid to increase its domestic revenues.

Finance Minister Decree No. 394/KMK.04/1996, dated June 5, stipulates that a 6 percent final rent-income tax will be imposed on corporate tax payers and a 10 percent final rent-income tax on individual tax payers.

The decree, which is a follow-up to Government Ruling No. 29/1996, states that the percentage of the income taxes are derived from the gross value of the rents, including service charges and maintenance costs.

Rented properties subject to the final rent-income taxes include land, houses, apartments, condominiums, office space, retail space, house-office buildings, shop-house buildings, warehouses and industrial buildings. (rid)