PT Perorangan, CV, or PT? Choosing a Small Business Structure for Tax After GR 20/2026
“Should I set up a CV or a PT?” is one of the questions we hear most from small businesses in Denpasar. Before 2026 the answer was fairly simple, because almost every structure could use the 0.5% final tax for a while. After GR 20/2026 the maths has changed: only individuals, PT Perorangan, and cooperatives can still use that rate as new users.
This article compares four options from a tax perspective with worked numbers, then adds the non-tax factors that matter just as much.
Summary of tax treatment
| Structure | Tax on the business | When the owner takes profit |
|---|---|---|
| Sole proprietorship (individual) | 0.5% final on turnover above IDR 500 million (turnover ≤ IDR 4.8 billion); above that, progressive Article 17 rates | No further tax |
| PT Perorangan | 0.5% final on turnover (≤ IDR 4.8 billion, combined with the owner’s); or 22% with Article 31E | Dividends 10% final unless reinvested |
| New CV | 22% with Article 31E (effective 11% if turnover ≤ IDR 4.8 billion) | Partners’ profit shares not taxable |
| New regular PT | 22% with Article 31E | Dividends 10% final unless reinvested |
Scenario 1: turnover IDR 2 billion, 15% margin
Assumptions: taxable profit IDR 300 million, all after-tax profit distributed, owner is a resident individual.
| Structure | Business tax | Tax on distribution | Total |
|---|---|---|---|
| Sole proprietorship | 0.5% × (IDR 2 bn − IDR 500 m) = IDR 7.5 m | – | IDR 7.5 m |
| PT Perorangan (0.5%) | 0.5% × IDR 2 bn = IDR 10 m | 10% × IDR 290 m = IDR 29 m | IDR 39 m |
| CV | 11% × IDR 300 m = IDR 33 m | – | IDR 33 m |
| Regular PT | 11% × IDR 300 m = IDR 33 m | 10% × IDR 267 m = IDR 26.7 m | IDR 59.7 m |
Note: dividend tax can be zero if dividends are reinvested in Indonesia under the HPP Law. If profit is retained for expansion, only the business tax counts: IDR 10 million for PT Perorangan, IDR 33 million for a CV or PT.
Scenario 2: turnover IDR 2 billion, 4% margin
Taxable profit IDR 80 million.
- Sole proprietorship: still IDR 7.5 million, since it is based on turnover.
- PT Perorangan on 0.5%: IDR 10 million (plus dividend tax if distributed).
- CV or PT with Article 31E: 11% × IDR 80 million = IDR 8.8 million, lower than PT Perorangan on the final scheme.
The lesson: the final scheme favours high-margin businesses; the profit-based scheme favours thin margins. For an entity using Article 31E, the break-even margin is about 4.55%.
What the numbers often leave out
- Turnover is combined. An owner with both a sole proprietorship and a PT Perorangan has their turnover counted together for the IDR 4.8 billion limit. Setting up several entities to split turnover no longer helps.
- A sole proprietorship does not separate assets. Business debts can reach personal assets. In a CV, active partners are also personally liable.
- Compliance costs. CVs and PTs on the profit-based scheme must keep full books and financial statements. Include that cost in the comparison.
- PT Perorangan limits. It allows only one shareholder and businesses meeting micro/small criteria. If the business outgrows the criteria or wants more shareholders, it must convert to a regular PT.
- Owner’s salary. In a PT, an owner working as director can receive a salary deductible as an expense (with Article 21 tax). This changes the numbers above and should be simulated.
Non-tax factors that matter just as much
| Consideration | Better fit |
|---|---|
| Small business, one owner, low risk | Sole proprietorship or PT Perorangan |
| Want personal assets separated at low setup cost | PT Perorangan |
| Two or more owners, mid-size services/trading, want to share profit without extra tax | CV (with active partners’ liability risk) |
| Large tenders, investors, corporate partners | Regular PT |
| Construction services needing an SBU | An entity (CV or PT) per certification requirements |
Conclusion
No structure is always the most tax-efficient. The answer depends on margins, profit distribution plans, number of owners, business risk, and who your partners are. Run a simulation with your own numbers before incorporating, because changing structure later has its own costs and process.
Related reading: tax consultant for small businesses, CV taxation, and guide to PT taxation.
Simulate with your own numbers
Agam Anand Konsultama can prepare a tax simulation for each structure based on your data, then help with incorporation and licensing. See our services or contact us for a free initial consultation via WhatsApp.
