Suppose you run or plan to start a business in Bali. In that case, it is essential to familiarize yourself with the Regional Taxpayer Identification Number, also known as Nomor Pokok Wajib Pajak Daerah (NPWPD). It’s a key requirement for local tax compliance, especially for businesses like hotels, restaurants, and entertainment venues.
In this guide, we will provide comprehensive insights into NPWPD, its significance, and how to register seamlessly through NPWPD’s online services in Bali.
What is NPWPD
The regional tax office issues an NPWPD, or Regional Taxpayer Identification Number, to identify individuals or entities that are subject to local taxes in specific areas, such as Bali. This number differs from the national Tax Identification Number (TIN) or NPWP, which is used for tax purposes by the central government.
NPWPD allows local governments to monitor and collect taxes from businesses operating in their jurisdiction. If your business generates income in a region like Bali, you are required to have an NPWPD to report local taxes. Without it, companies could face penalties or even closure due to non-compliance with regulations.
Regional tax: Why NPWPD is essential for your businesses
Regional tax, as defined under Law No. 28 of 2009, is a mandatory contribution to the local government. While it doesn’t offer direct rewards to the taxpayer, it plays a crucial role in funding public services, such as road construction, job creation, and other community improvements.
By registering for an NPWPD, businesses in Bali actively support these local initiatives. It not only fulfills a legal obligation but also brings key advantages, such as:
Legal Compliance
Without an NPWPD, businesses are considered non-compliant with local tax laws and may face penalties or closure.
Funding Local Growth
Regional taxes help finance vital services and infrastructure that benefit residents and businesses.
Credibility and Transparency
A registered NPWPD adds legitimacy to your business and makes financial reporting more transparent.
Simplified Online Services
With NPWPD online, tax management becomes easier, faster, and more efficient.
What are the differences between NPWP and NPWPD?
While both NPWP and NPWPD are tax identification numbers in Indonesia, they serve different purposes and are managed by different authorities. Businesses in Bali often need to meet both complete tax compliance requirements.
Here’s how they compare:
Authority
As part of the national tax administration system, NPWP is issued by the Directorate General of Taxes and operates under the Ministry of Finance. NPWPD, on the other hand, is issued by the regional tax office of the local government
Tax Types
NPWP is used to report and pay national-level taxes for both individuals and businesses across Indonesia, including personal and corporate income tax (PPh) and value-added tax (VAT).
Meanwhile, NPWPD only applies to local taxes, such as hotel, restaurant, and entertainment taxes. These are often linked to hospitality and tourism-related businesses.
Coverage Area
NPWP has a nationwide scope, meaning it is required for tax compliance across Indonesia, covering all business operations. NPWPD only covers a specific region, such as Bali, and is limited to local tax obligations within that region.
Obligation Type
NPWP is mandatory for all individuals and companies earning income in Indonesia, including freelancers, SMEs, and large corporations.
In contrast, NPWPD is specifically required for businesses providing taxable services within a local area. Without it, they are not legally permitted to charge or pay regional taxes.
Read more: Understanding Indonesia’s tax identification number system
Who needs NPWPD?
Not all individuals in Indonesia need an NPWPD. However, if you’re running a business in Bali that earns income from specific services, registering for an NPWPD is essential.
Below are the business sectors required to obtain NPWPD:
- Hotels and villas
- Restaurants and cafes
- Entertainment venues (e.g., clubs, bars, spas)
- Parking services
- Businesses selling motor vehicle fuel
- Companies subject to lighting or advertisement taxes
How to obtain NPWPD for businesses in Bali
To streamline the NPWPD registration process, the Indonesian government has launched an online system to centralize tax administration. This digital platform allows you to register for NPWPD more quickly and access it from anywhere in Indonesia.
Key Requirements
Before initiating the registration, ensure you have the following documents ready:
- Personal Identification: Valid KTP for individuals.
- Business License: SIUP or SKU for business owners.
- Business Address Proof: Complete address of the business, supported by official documents such as a Surat Keterangan Domisili Usaha (SKDU) or proof of business premises ownership.
- Business Type Description: A brief description of the business type, e.g., restaurant, hotel, store.
- Personal Tax Identification Number: NPWP is required for individual entrepreneurs.
- Bank Account Number: The bank account used for business financial transactions.
- Active Email and Phone Number: For receiving confirmations and information related to NPWPD registration and local tax notifications.
Online Registration
Each region in Indonesia operates its own NPWPD registration platform, typically managed by the local tax office (Dispenda or Bapenda). For businesses in Bali, registration is conducted through the E-Palapa system, which is operated by the Badung Regency Revenue Agency.
To register, complete the online form and upload the required documents. The local tax office will review your application within a few working days. Once approved, your NPWPD will be issued and available for download.
Simplify your tax compliance in Bali with InCorp
Navigating Indonesia’s tax regulations can be complex, especially when managing both NPWP and NPWPD compliance in Bali.
InCorp Indonesia (An Ascentium Company) offers comprehensive tax reporting services to ensure full compliance with national and regional tax obligations in Bali. Our expert consultants assist with the following:
- NPWPD and NPWP registration
- Monthly and annual tax filings
- Local and central tax compliance
- Audit preparation and representation
Fill out the form below and let us handle the end-to-end tax paperwork seamlessly for you.
Get in touch with us.
What you'll get
A prompt response to your inquiry
Knowledge for doing business from local experts
Ongoing support for your business
Disclaimer
The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.
We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.
Verified by
Heldy Narua
Senior External Finance Manager at InCorp Indonesia
Heldy, with seven years of experience, leads InCorp Indonesia’s External Finance team, specializing in reliable Payroll Outsourcing and Finance Management solutions. She has an Accounting and Business Administration degree from Sampoerna University and Oregon State University. She is certified with Brevet AB, highlighting her technical expertise and commitment to client success.
