Taxation ยท KBLI 55111

Hotel & Hospitality Tax

The hotel and hospitality industry is subject to Certain Goods and Services Tax (PBJT) of 10% on hospitality services collected by the local government, not central VAT. However, complexity arises from service charges distributed to employees that must be withheld for Article 21 Income Tax. Arunika Consulting helps hotels manage central and local tax obligations in an integrated manner.

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What usually goes wrong

  • PBJT vs VAT Confusion

    Hotels do not collect 11% VAT but 10% PBJT paid to local government. Corporate guests often request tax invoices that cannot be issued.

  • Service Charge and Article 21 Income Tax

    10% service charge distributed to employees is taxable income that must be withheld for Article 21 Income Tax.

  • Multi-Outlet with Different Taxes

    Restaurants, spa, and laundry within hotels may have different PBJT treatment than rooms.

What we do

  1. 01

    Integrated PBJT Reporting

    Preparing monthly PBJT reporting systems separating room services, F&B, and other facilities according to local government provisions.

    • Lower penalty risk
    • Accurate reporting
    • Good local government relations
  2. 02

    Article 21 Income Tax Service Charge

    Setup of Article 21 Income Tax calculation on service charge distribution to employees proportionally.

    • Compliance maintained
    • Employees satisfied
    • Withholding proof on time
  3. 03

    Corporate Income Tax Planning

    Optimization of deductible expenses to reduce annual Corporate Income Tax burden.

    • Efficient tax burden
    • Good cash flow
    • Investment planning

Related regulations

  • UU HKPD

    Law No. 1/2022 on Central and Regional Financial Relations

    Regulates Certain Goods and Services Tax (PBJT) on Hospitality Services up to maximum 10% collected by local government.

  • UU PPN

    Law No. 42/2009 on Value Added Tax

    Hospitality services are exempt from central VAT because they are already subject to regional PBJT.

  • PPh Pasal 21

    Income Tax on Salaries and Service Charge

    Article 21 Income Tax withholding on employee salaries and service charge distribution.

If the tax office starts asking questions

The team that keeps your books and files your taxes also stays with you through an SP2DK, an audit, an objection and an appeal.

How we handle tax disputes

Frequently Asked Questions

Must hotels become PKP?

For hospitality services, PKP is not mandatory because exempt from VAT. However if there is merchandise sales or other VAT-taxable services, evaluation is needed.

What if guests request tax invoices for claims?

Hotels cannot issue VAT tax invoices for room services. Explain that PBJT is a local tax, different from central VAT.

Is service charge subject to PBJT?

Yes. Service charge is part of hospitality service value subject to 10% PBJT before distribution to employees.

Who handles my tax work?

Your tax work is handled by Arunika's tax consultants. We confirm the scope, deadlines and price before work starts.

What should I do if I receive an SP2DK letter or tax audit notice?

Contact us early. We help analyze the risk, prepare supporting documents, draft the response, and assist discussions with the tax office.

What does tax planning cover?

We review your structure, transactions and available incentives so tax is calculated under the rules, without crossing into tax evasion. The outcome depends on your facts, so we do not promise a savings figure.

Related Industries

Tell us about your business

Send your line of business, rough annual turnover, and what is going wrong. We reply on WhatsApp.

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