Moving to Indonesia from the UK: the 2026/27 tax guide

Indonesia is not a tax haven and does not market itself as one. Residents are taxed on worldwide income at progressive rates up to 35% (PwC Worldwide Tax Summaries: Indonesia). What softens the landing is the concession in Indonesia's Omnibus Law: foreign citizens who become tax resident can be taxed only on Indonesian-source income, including where it is paid offshore, for their first four years of residence, provided they meet certain expertise requirements. For a mover with UK rental income, UK dividends or an offshore portfolio, that can keep significant income outside the Indonesian net during the early years, which is exactly when most people are still untangling the UK side.

But the deciding factor for your UK bill is not your visa category or your villa in Canggu. It is the UK Statutory Residence Test, which decides, year by year, whether the UK can still tax your worldwide income. Three things have to line up: breaking UK residence under the SRT, claiming split-year treatment where you leave mid-year, and dealing properly with the income and gains that stay UK-taxable regardless. Get those right and the Indonesian position, and the 1993 treaty, take over.

The SRT is applied in strict order: first the automatic overseas tests (which make you non-resident), then the automatic UK tests (which make you resident), then the sufficient ties test if neither is conclusive (HMRC's guidance is at RFIG20000). For someone moving to Indonesia, the automatic overseas tests are the target.

• First automatic overseas test: you were UK resident in one or more of the previous three tax years and spend fewer than 16 days in the UK in the current year.
• Second automatic overseas test: you were not UK resident in any of the previous three tax years and spend fewer than 46 UK days.
• Third automatic overseas test, the usual route for working movers: you work full time abroad across the tax year, broadly an average of at least 35 hours a week with no significant breaks, spend fewer than 91 days in the UK and work in the UK on no more than 30 of those days.

If you cannot meet an automatic overseas test, the sufficient ties test combines your UK day count with the ties you keep: family, accommodation, work, a 90-day prior-presence tie and, for recent leavers, a country tie. The more ties you retain, the fewer UK days you are allowed. The flight home from Denpasar is long enough that most people do not drift back casually, but a summer in the UK plus a family Christmas adds up faster than people expect. Model your position with our SRT calculator at /tools/srt-calculator before you commit to travel plans.

Most people do not emigrate neatly on 6 April. Where the conditions are met, split-year treatment divides the departure year into a UK part, taxed on worldwide income, and an overseas part, taxed only on UK-source income, so Indonesian earnings after the split date are outside UK income tax for that year. The common gateways for leavers are starting full-time work overseas and ceasing to have a UK home, each with its own conditions on timing and UK day limits.

The admin is the same as for any departure. If you are employed or receiving a pension and will not be filing a return, tell HMRC you have left using the P85 process (GOV.UK), which can also trigger a refund of overpaid PAYE. If you are in Self Assessment, GOV.UK is explicit that you do not file a P85 as well; you claim split-year treatment on the SA109 residence pages of your final return. The SA109 cannot be filed through HMRC's free online service, so you will generally need commercial software or an agent. Keep evidence of flights, work patterns and your Indonesian accommodation: residence questions are argued on records, after the fact.

Becoming non-resident does not switch off UK tax on UK-source income. The 1993 treaty then decides which country has first claim on each item, and Indonesia's four-year concession decides whether Indonesia taxes it at all in the early years.

One more UK tail worth knowing about: since 6 April 2025 inheritance tax has been residence-based, so a long-term UK resident can stay exposed on worldwide assets for up to ten years after leaving. A move to Indonesia does not end your IHT story on the day you land.

You become an Indonesian tax resident if you reside in Indonesia, are present for more than 183 days in any 12-month period, or are present during a fiscal year with the intention to reside (PwC Worldwide Tax Summaries: Indonesia, residence). Note the shape of the day test: it is any 12-month period, not a calendar year, so a stay that straddles two calendar years can still make you resident. Non-residents are instead taxed by a flat 20% withholding on Indonesian-source income, subject to treaty relief.

The interesting question for arrivals is the four-year concession. Under the Omnibus Law, a foreign citizen who becomes Indonesian tax resident can be taxed only on Indonesian-source income, even if it is paid offshore, for the first four years of residence, provided certain skill and expertise requirements are met. The debate is whether to use it. The concession cannot be combined with treaty benefits on the same foreign income: if you claim relief under the UK-Indonesia treaty, the territorial treatment does not apply to that income. For someone with mainly UK rental income the treaty credit route and the concession can produce different answers, and there is a live source question about whether work you physically perform in Indonesia for foreign clients counts as Indonesian-source income anyway. This is precisely where you need an Indonesian tax adviser: the concession has registration and eligibility conditions that are applied locally, and we do not advise on Indonesian domestic tax.

For years the standard nomad route was the B211A visit visa, a 60-day entry that could be extended without ever conferring residence rights. Indonesia has since reorganised its visit visa codes and, more importantly, introduced a dedicated remote worker residence permit (a KITAS, at the time of writing designated E33G) aimed at people employed by or contracting for businesses outside Indonesia. The direction of travel is clear: Indonesia wants remote workers inside the formal system rather than perpetually extending tourist visas.

Two warnings. First, immigration rules in Indonesia change frequently and are applied with local variation, so verify the current categories, financial thresholds and work restrictions with a licensed Indonesian immigration adviser before you build plans around them; nothing here is immigration advice. Second, your visa does not determine your tax position in either country. Spending more than 183 days in Indonesia in a 12-month period points to Indonesian tax residence whatever stamp is in your passport, and the UK's SRT counts your UK days and ties without asking what visa you left on. People who cycle through visit visas while working full time from Bali are often Indonesian tax residents who have not registered, and sometimes still UK residents who have not realised it.

The UK-Indonesia Double Taxation Agreement was signed on 5 April 1993 and entered into force on 14 April 1994; GOV.UK catalogues it as the 1994 agreement, with effect in the UK for income tax and capital gains tax from 6 April 1995 and in Indonesia from 1 January 1995 (GOV.UK: Indonesia tax treaties). It has since been modified by the Multilateral Instrument, with a synthesised text published on the same page. So there is a full, current treaty; this is a well-documented corridor.

The clause that surprises people is pensions. Article 18 provides that a pension paid to a resident of one state from a source in the other state may be taxed in that other state (1993 agreement text, GOV.UK). In plain terms: retire to Bali and your UK pension stays within the UK's taxing rights, with PAYE carrying on, and Indonesia relieves any double tax by credit under Article 21. Many UK treaties give the residence country sole taxing rights over private pensions; this one does not, and planning built on that assumption fails. Government service pensions follow Article 19: taxable only by the paying state unless you are both a resident and a national of the other state.

For the self-employed, Article 14 on independent personal services is the key rule: professional income is taxable only in your residence state unless you have a fixed base in the other state or are present there for 91 days or more in any 12-month period. Income from UK immovable property, and gains on it, may be taxed by the UK under Articles 6 and 13, which is why the rental and NRCGT rules above keep applying.

The most common fact pattern on this corridor is a freelancer or contractor whose clients are all in the UK, invoicing from a laptop in Ubud or Uluwatu. The instinct is that UK clients mean UK tax. They do not. Services are generally taxed where the work is physically performed and where you are resident, not where the client sits. Once you are non-resident under the SRT, and assuming no UK fixed base and fewer than 91 UK days, Article 14 leaves your professional income taxable only in Indonesia. Your UK clients can keep paying you gross; being paid by a UK company does not, by itself, create UK tax on a non-resident's self-employment profits.

Three qualifications. First, the days you spend physically working in the UK are different: UK workdays can be UK-taxable and, more dangerously, they count against the 30-workday limit in the SRT's full-time-work-abroad test, so a few weeks of client meetings in London can unpick your non-residence. Second, on the Indonesian side, work performed in Indonesia is the classic case of Indonesian-source income, so do not assume the four-year concession shelters your freelance earnings; that is a question for a local adviser, as is registering for an Indonesian tax number once resident. Third, if you operate through a UK limited company rather than personally, the analysis changes completely: company residence, permanent establishment and dividend questions arrive, and you should take advice before you move, not after.

If you were UK resident in at least four of the seven tax years before departure and return within five years, the temporary non-residence rules treat certain gains and income realised while away as arising in your year of return (HMRC's guidance starts at CG26500). The classic trap is selling a business or a share portfolio during a two-year stint in Bali and coming home to a UK CGT bill on the whole gain. Certain income, including some dividends from your own close company, is caught in the same way.

If a disposal is part of the plan, the five-year clock matters more than almost anything else in this guide. Count it properly, from the right start date, and do not cut it fine by a month. Our guide to returning to the UK covers the detail.

We are UK Chartered Tax Advisers who work the UK end of international moves every day: SRT planning and evidence, split-year claims, final returns with the SA109, Non-Resident Landlord Scheme applications, 60-day NRCGT returns, and treaty analysis on pensions and freelance income for people heading to Indonesia. We work to fixed fees agreed upfront, with straightforward pieces of work such as a departure-year return or an NRL setup typically in the £350 to £750 range depending on what is involved. For the Indonesian side, the concession, local registration and visas, we will tell you plainly that you need an adviser on the ground, and what to ask them.

If you are planning the move, or you made it a while ago and the UK side never got tidied up, book a free clarity call and we will tell you what actually needs doing and what it will cost before you commit to anything. You can read more about how we work with leavers and non-residents on our expat tax adviser page.