NPWPD and DISPENDA
Restaurants and hotels in Bali are required to obtain a tax number from the local government (NPWPD). South Bali falls under the Badung region (Kabupaten Badung). Villas offered for daily rental have the same obligation. The NPWPD can be issued in the name of an Indonesian citizen or an Indonesian company including foreign-owned companies (PMA).
After obtaining the NPWPD, the villa owner or the management company must submit a monthly declaration with the total amount of rentals to the Badung tax authorities. A 10% tax on the turnover is applied (Dispenda). As with the VAT in most western countries, this is actually a tax that is added to the rent paid by the tenant. Therefore, this tax is not charged to the owner of the villa but to the client.
The payment of the Dispenda exempts from the Indonesian VAT (PPN).
Pasal PPH4 & PPH26
The villa owner pays a tax on the income generated by the daily rental. The tax is calculated on the result, i.e. the amount of rent minus the expenses. Any individual or company domiciled in Indonesia is taxed at a rate of 10% (PPH4) while non-residents are taxed at 20% (PPH26).