PP 20/2026: Who Can Still Use the 0.5% Final Tax, and What Changes for CVs and PTs
On 22 April 2026, Indonesia issued Government Regulation (PP) 20/2026, amending PP 55/2022. A key part concerns the 0.5% final income tax widely used by small businesses.
Who still qualifies
- Individual taxpayers
- PT Perorangan (single-founder companies)
- Cooperatives
Turnover must not exceed IDR 4.8 billion a year. Individuals pay no final tax on the first IDR 500 million. Turnover of an individual and the PT Perorangan they founded is combined; if the total exceeds IDR 4.8 billion in a year, the facility is lost for following years.
Good news: no more time limit
PP 55/2022 limited use of the 0.5% rate to seven years for individuals and four years for PT Perorangan. PP 20/2026 removes this limit for both, and individuals whose period ended in 2024 or 2025 may continue using it up to tax year 2026 if they still qualify.
Who must prepare: CVs, partnerships, and regular PTs
CVs, firms, non-single-founder PT companies (including PMA), and village-owned enterprises are no longer eligible. Those already using the facility before PP 20/2026 may continue until their period ends. After that, tax is based on profit from proper books, with a possible 50% rate reduction under Article 31E of the Income Tax Law for qualifying turnover.
What to do now
- Confirm your entity type and current tax status.
- Check when your transition period ends.
- Start keeping proper books now, not at year end.
- Model your tax under the general regime with the Article 31E reduction.
- Watch for implementing regulations.
We can model the impact for you
Agam Anand Konsultama provides tax and accounting services in Denpasar for businesses across Bali. Book a free consultation and we will calculate what PP 20/2026 means for you.
