CV Taxation: Rates, Obligations, Partners' Profit Shares, and How It Differs from a PT
The limited partnership, or CV, remains popular among Bali entrepreneurs because it is relatively simple to set up and has no minimum capital like a PT. For tax purposes, a CV is a corporate taxpayer in its own right, separate from its partners. Many CV owners only realise this when they are asked for financial statements for the corporate annual return.
This article summarises current CV taxation, including the impact of GR 20/2026 and how a CV differs from a PT.
Income tax rates for a CV
There are two possibilities:
- The standard 22% corporate rate on taxable profit, with the Article 31E facility: CVs with turnover up to IDR 50 billion get a 50% rate reduction on the portion of income from turnover up to IDR 4.8 billion. For a CV with turnover under IDR 4.8 billion, the effective rate is 11% of profit.
- The 0.5% final tax on turnover. Since GR 20/2026, CVs are no longer eligible as new users. CVs already using the scheme can generally continue only until their period ends.
So a CV set up now must keep proper books and pay tax on profit. Full details are in our article on GR 20/2026.
Example: a CV using Article 31E
CV Segara in Denpasar has turnover of IDR 3 billion and taxable profit of IDR 240 million.
- Since turnover is below IDR 4.8 billion, all profit gets the 50% reduction.
- Corporate tax = 50% × 22% × IDR 240 million = IDR 26,400,000.
- For comparison, 0.5% × IDR 3 billion = IDR 15,000,000.
At an 8% margin the profit-based scheme costs more. But if taxable profit were only IDR 120 million (4% margin), corporate tax would be IDR 13.2 million, below 0.5% of turnover. The break-even margin is about 4.55%. That is why accurate books and complete expense records matter so much for a CV.
Partners’ profit shares are not taxable
This is a key difference from a PT. Under Article 4(3)(i) of the Income Tax Law, profit shares received by members of a limited partnership whose capital is not divided into shares are excluded from taxable income. The CV’s profit has already borne corporate tax, so distributing after-tax profit to partners triggers no further income tax.
Compare a PT: dividends to individual shareholders are subject to 10% final tax unless reinvested in Indonesia under the rules. See our guide to PT taxation for the full comparison.
Note, however, that partners taking CV money outside a proper profit distribution, for example for personal use without documentation, can raise questions in an audit. Record profit distribution decisions in writing and book them as drawings or distributions, not expenses.
Routine CV obligations
A CV’s obligations are essentially the same as any other entity:
- Monthly: Article 21 on employees, Article 23 and Article 4(2) on certain payments, Article 25 instalments, and VAT if registered. Pay by the 15th, report by the 20th; VAT returns by the end of the following month.
- Annual: corporate annual return by 30 April, with financial statements.
- VAT registration: required once turnover exceeds IDR 4.8 billion a year. VAT is 12% on an 11/12 base (effective 11%) for non-luxury goods and services.
- Partners still file personal annual returns. Profit shares from the CV are reported as non-taxable income.
Expenses often disallowed for CVs
- Salaries of active partners: these need care, because payments to partners that are really profit distributions cannot be deducted.
- Personal costs, such as a car or house used by the family, booked as CV expenses.
- Entertainment without a nominative list.
- Vendor payments without the required withholding tax.
CV or PT?
| Aspect | CV | PT |
|---|---|---|
| Owner liability | Active partners liable up to personal assets | Limited to paid-up capital (with certain exceptions) |
| Income tax rate | 22%, Article 31E facility | 22%, Article 31E facility |
| 0.5% final tax for new entities | Not available | Only for PT Perorangan |
| Profit distribution to owners | Not taxable | Dividends to individuals 10% final, exempt if reinvested |
| Credibility with partners/large tenders | Enough for small to mid-size projects | Generally more trusted |
The choice depends on business risk, growth plans, and what partners require. For small businesses about to incorporate, a PT Perorangan is also worth considering. See our comparison of PT Perorangan, CV, and PT.
CV tax support
Agam Anand Konsultama helps CVs in Denpasar and Bali set up bookkeeping, calculate the most efficient tax position, and handle monthly and annual compliance. See our tax services or contact us for a free initial consultation via WhatsApp.
