Our topic today is Taxation, Retirement, and Social Rights for Long-Term Immigrants in Indonesia and the Philippines. Let's start with Indonesia. How does it treat long-term foreign residents regarding taxes?
In Indonesia, if you have a KITAS or KITAP (limited or permanent stay permit), you're generally taxed on income sourced within Indonesia. If you earn Rupiah, you'll pay taxes.
What are the tax rates?
Indonesia uses a progressive tax system, ranging from 5% to 35% depending on your income bracket. Remember to consider any tax treaties your home country might have.
And retirement perks?
Retirement in Indonesia for expats is more about lifestyle than government benefits. Lower living costs are attractive, but you'll need private health insurance and a solid savings plan.
What about social security?
Indonesia's BPJS social security system is primarily for Indonesian citizens and long-term residents with a work history. Access is limited for expats unless formally employed.
Now, let's move to the Philippines. What's the tax situation for long-term expats there?
If you're a resident alien (living there over 180 days a year), you're taxed on income earned within the Philippines.
And the tax rates?
The Philippines also has a progressive tax system, ranging from 0% to 35%, depending on your income. Keep good records; bureaucracy can be challenging.
What about retirement and social security in the Philippines?
Retirement relies on personal savings and investments. The Social Security System (SSS) is mainly for Filipino citizens and legal residents who have contributed. Expats are unlikely to be eligible unless formally employed and contributing.
What's the biggest difference between the two countries for long-term expats?
The ease of access to social security benefits. Both countries heavily rely on personal planning.
What's the most important thing for listeners considering relocating to either country?
Consult a local tax professional. Laws change, interpretations vary, and you want to avoid tax problems.
Excellent advice. Whether it's Bali or Manila, ensure your financial affairs are in order.
Precisely. Nothing spoils paradise like a tax audit.