Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 10/30/2012

Indonesia - Overview of insurance sector tax environment 

October 30:   The insurance industry in Indonesia has seen continued growth for the past several years.

Partly because of the long-term characteristics of life insurance products, the life insurance segment has grown faster than the general insurance or re-insurance segments. As of 31 December 2011, the assets of the top 10 life insurance companies grew by 24.6% from the previous year, while assets of general insurance companies increased only by 15.9%.


However, industry penetration is low, with gross premiums underwritten representing only 1.84% of GDP at the end of 2011. This suggests that there are significant growth opportunities for the industry.


For those considering entry into the Indonesian insurance industry, an understanding of the tax treatment of insurance is needed.


Read a 2012 report [PDF 632 KB] prepared by the KPMG member firm in Indonesia: An Overview of Indonesia’s Insurance Sector Tax Environment


The KPMG report provides a general tax overview related to insurance including:


  • Corporate income tax—Reserves, premiums, non-taxable income and final tax
  • Withholding taxes—Insurance / reinsurance premiums paid to non-resident; saving element payment; pension fund transferred to life insurance companies to purchase lifetime annuities; severance funds transferred to a severance fund managed company; insurance agents; and bancassurance
  • Value added tax—Bancassurance



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+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

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