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Indonesia

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    INDONESIA ACCOUNTING AND AUDIT

    The Indonesian government imposes financial and tax reporting requirements on all enterprises in Indonesia to ensure their sound financial standing. 

    The commonly used accounting standards in Indonesia are the Financial Accounting Standards (SAK). The standards are set by the Financial Accounting Standards Board (DSAK IAI) and the Indonesian Sharia Accounting Standards Board (DSAS IAI) for sharia-based companies.

    Foreigners operating business in Indonesia can find it challenging due to complex regulations and language barriers. You can contact us if you require assistance with company accounting, audit, and Indonesia corporate tax matters.

    Our consultants are ASEAN CPA certified and have an in-depth understanding of Indonesia’s financial reporting standards.

    WHY DO YOU NEED INDONESIA ACCOUNTING AND BOOKKEEPING SERVICES

    All Indonesian businesses must follow local tax and compliance regulations once the Indonesia company registration is completed. 

    If your Indonesian company is just starting up in the region, the most economical choice will be to outsource the accounting needs. Most outsourced accounting services for small businesses Indonesia will make sure that your company consistently complies with the local government’s SOP standards. Failure to comply with local regulations or delays in filing corporate tax returns will result in penalties from the tax authorities. 

    What Do Accounting, Bookkeeping, And Audit Involve In Indonesia

    Every financial year, a business will conduct multiple transactions.

    Bookkeeping will involve the process of recording all the Income and expenses for every transaction.

    Accounting will include the financial statements accurately and honestly reflecting the events that have occurred in the company.

    Audit involves examining the company’s books, paperwork, and underlying accounting records. The audit process will be independent and methodical in providing a fair result. Auditing maintains track of any errors that may have happened.

    ADDITIONAL SERVICES INCLUDED ACCOUNTING AND BOOKKEEPING

    Reviewing  accounting policies and procedures

    The technical accuracy of the current accounting Indonesia policies will be verified. Compare the accounting policies with others and ensure they contribute to the business’s growth.

    Financial planning and analysis

    Outsourced accounting services in Indonesia will help the business in budgeting, forecasting financial needs, internal controls, oversight, and much more.

    PT PMA (Limited Liability Company) Accounting and Audit requirements

    A PT PMA must provide audited financial reports and pay taxes annually. These taxes include VAT, Luxury Goods Sales Tax (LGST), withholding taxes, annual and monthly taxes.

    The company will be considered a tax resident if it has an Indonesian domicile. Foreign business owners will require an accounting company in Indonesia to manage the payment and reporting on its behalf in order to fulfill the tax obligations if they do not intend to hire a local full time accountant employee.

    Types of Filing Filing Frequency and Deadline
    Corporate Income Tax Monthly and annually (The end of the fourth month after the book year-end)
    VAT Monthly, 10th day of the following month.
    Payroll Withholding Tax Monthly, 10th day of the following month.

    Tax filing must be accounted for at the tax office through the filing of the relevant tax returns, and the company must ensure all tax liabilities for a particular period or year have been paid to the State Treasury through a designated tax-payment bank (bank persepsi) within the deadline. All taxes should be paid regionally.

    As indicated by Indonesian law, a company must keep its accounting records and books for at least ten years from the end of its reporting period. 

    What Types Of Companies Must Be Audited In Indonesia?

    Indonesian company law mandates that the financial statements of a limited liability company must be audited by a public accountant registered in Indonesia if they meet at least one of the following criteria.

    • Companies with assets exceeding 50 billion rupiahs (US$3.6 million);
    • Public companies;
    • Companies that issue debt instruments;
    • The company is a state-owned enterprise; or
    • The company collects or manages public funds (such as banks and insurance companies).

    THINGS TO CONSIDER WHILE HIRING BOOKKEEPING SERVICES

    Safety Of The Data

    Data security is one of the main concerns with outsourcing accounting services in Indonesia. Due to the negligence of the bookkeeper, information about the business may be compromised. Additionally, because financial information is very delicate, this might put the business in danger.

    The privacy policies of the accounting company in Indonesia must be checked. They should be very forward about how they safeguard and protect the data and what steps the business owner can take if they make a mistake.

    Past Work References

    The business will rely on the bookkeeper in numerous ways for its legal health. The bookkeeper’s mistakes may be expensive, especially if they involve legal duties.

    It must be ensured that the bookkeeper has sufficient expertise in the area. On the other hand, if a particular industry has unique requirements, the outsourced service provider should be able to conduct all the necessary research and provide the Indonesia bookkeeping services.

    Transparency About The Charges

    It would not be a good idea to pay more than what was agreed upon. No hidden fees are associated with good bookkeeping services in Indonesia.

    When the contract is signed with the hired company, extreme caution should be taken. The majority of the hidden costs are included there in a way that makes them less obvious.

    Priority

    Most firms work with large enterprises, which can affect their services while working with start-ups and SMEs. Hence, if the business is newly incorporated, it will be better to engage with an accounting firm in Indonesia that specializes in serving companies of the same size. So, the business owner is confident that the bookkeeper will give enough attention and maintain accurate records.

    BENEFITS OF AUDITING & ACCOUNTING FOR YOUR BUSINESS IN INDONESIA

    Field Expertise

    Usually, business owners are not aware of the various accounting and tax laws around the world. Some of these laws and requirements are complex and constantly changing. It’s a good idea to hire top accounting firms in Indonesia. The bookkeeping services will provide all the financial information according to the business circumstances.

    Prevention of errors and mistakes

    Errors in the books of accounts can jeopardize the financial health of the business. With the help of an outsourced accounting firm in Indonesia, the quality of books will be increased as there won’t be any errors or overdue bills.

    Avoiding penalties

    With the help of accountants in Indonesia providing accounting services, corporate tax, goods, and services tax, and other taxes will be paid on time and accurately, thereby avoiding interest, penalties, and investigations.

    HOW RELIN CONSULTANTS CAN HELP AUDITING AND ACCOUNTING BUSINESS IN INDONESIA

    Relin Consultants have a wide range of accounting and bookkeeping services. We have an expert team who will lift financial and tax reporting burdens. You will never have to worry about missing a deadline. 

    Our team makes sure that the solutions provided by us are suitable for your business circumstances. Reach out to our team to understand more about our accounting and bookkeeping Services.

    FAQs

    Does Indonesia follow IFRS?

    Indonesia has not adopted IFRS Standards for reporting by domestic companies. Indonesia’s strategy for implementing IFRS is to keep its national GAAP (Indonesian Financial Accounting Standards, or IFAS) steady and converge it with IFRSs.

    Which financial Accounting Standard is Indonesia adopting currently?

    Indonesia is adopting the International Financial Reporting Standard (IFRS).

    Who set Accounting standards in Indonesia?

    Public Sector Accounting Standards are established in Indonesia by the Government Accounting Standard Committee (KSAP), which was established by Minister of Finance Decree No. 379 of 2004.

    What Accounting standards does Indonesia use?

    The commitment of Indonesia is to maintain the IFRS Standards and promote IFRS Standards as the internationally recognized accounting standard, further reducing the gap between SAK and IFRS. The full implementation of IFRS Standards in Indonesia has not yet been announced by Indonesia.

    What are the types of accounting services in Indonesia?

    Accounting services include financial planning and analysis of the business, reviewing financial policies, preparing tax records, etc.

    Can a PMA company maintain non-Rupiah bookkeeping and use Non-Indonesian Language?

    A company’s accounting books, records, and financial statements must be prepared using the Indonesian language and maintained in rupiah for tax purposes.

    Selected companies can apply for permission from the Ministry of finance to prepare accounting books in the English language. Prior approval is mandatory.

    Are there any conditions on distributing dividends from a PMA company in Indonesia?

    There are no restrictions on distributing after-tax profits as dividends. Such dividends may be distributed after approval by the general meeting of the company’s shareholders.

    Is there a foreign exchange control/restriction in Indonesia?

    Indonesia does not impose any exchange control on foreign currency. Investors are allowed to transfer foreign currency funds to or from Indonesia freely. Transfer of funds in foreign currency to and from abroad will be subjected to a reporting obligation to Bank Indonesia.

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