PP 20/2026 applies the 0.5 percent final-tax facility to eligible domestic individual taxpayers, one-person PTs, and cooperatives with turnover not exceeding Rp4.8 billion. Even the simplest tax scheme starts with knowing exactly what the business earned.
In this blog, we discuss how to make an income statement for a business in Indonesia. We cover:
- PSAK line items
- a six-step preparation workflow
- 2026 tax rates and filing deadlines
- mistakes that most often trigger queries from the Directorate General of Taxes (DJP)
What Is an Income Statement and What Must It Show?
An income statement, called laporan laba rugi in Indonesian, summarizes a company's revenue, expenses, and profit or loss. It covers a defined period.
It differs from a balance sheet, which captures assets and liabilities at a single point in time. The income statement answers a completed-period question instead: did the business actually make money between two dates?
Indonesian companies rely on the document for three main purposes. First, directors must present annual financial statements to the Annual General Meeting of Shareholders (AGMS). Company law requires the meeting within six months of the fiscal year end. Second, banks and investors use the statement to judge profitability before extending finance. Third, the DJP uses it as the starting point for the annual corporate income tax return.
Many classic tips for preparing income statements remain sound, but rates, thresholds, and systems in Indonesia have moved on. The 2026 figures in this article reflect the current Coretax era and the latest tariff regulations.
Which Rules Govern Income Statements for Companies in Indonesia?
Company Law No. 40 of 2007, the PSAK standards issued by the Ikatan Akuntan Indonesia, and the tax rules administered by the DJP together govern income statement preparation in Indonesia.
The Company Law requires a limited liability company (PT) to prepare annual financial statements. The full set consists of:
- a balance sheet
- an income statement
- a cash flow statement
- a statement of changes in equity
- notes to the financial statements
The income statement is generally presented in Rupiah. Taxpayers authorized by the Minister of Finance may keep tax books and file returns in a permitted foreign currency.
Presentation follows the Financial Accounting Standards (PSAK) issued by the Ikatan Akuntan Indonesia (IAI), the country's professional standard-setter. PSAK 201 governs the presentation of financial statements, while other standards cover revenue recognition and inventory costing. Smaller entities may apply simpler frameworks, such as the standards for micro, small, and medium entities.
For tax purposes, revenue earned in foreign currency is converted using the official Ministry of Finance exchange rates for tax settlement, which are published weekly. Consistency between the accounting records and the tax return is essential, because a DJP examination starts by reconciling the two. Businesses using QuickBooks accounting should map their chart of accounts to PSAK presentation and retain supporting documents for each balance.
Income Statement Line Items Under PSAK
| Line Item | Indonesian Term | What It Captures |
|---|---|---|
| Net revenue | Pendapatan usaha | Sales after discounts and returns |
| Cost of goods sold | Harga pokok penjualan | Direct costs of goods or services sold |
| Gross profit | Laba kotor | Revenue minus cost of goods sold |
| Operating expenses | Beban usaha | Salaries, rent, marketing, utilities |
| Operating profit | Laba usaha | Gross profit minus operating expenses |
| Other income and expenses | Pendapatan dan beban lain-lain | Interest, gains or losses on asset sales |
| Net profit | Laba bersih | Result after all items are presented |
How to Make an Income Statement Step by Step?
Preparing a compliant income statement follows six sequential steps, from closing the books to reconciling net profit with the annual corporate tax return.
The six steps below assume a monthly or annual closing cycle and an accrual basis of accounting, as PSAK requires. Each step builds on the previous one, so skipping a reconciliation early will distort every figure that follows.
Step 1: Close the books and reconcile every account
Bank balances, cash counts, accounts receivable, and accounts payable must be reconciled to supporting documents before reporting starts. Unreconciled balances are the most common source of misstated profit in practice.
Step 2: Record all revenue earned in the period
Under the accrual basis, revenue is recognized when earned, not when cash is received. Each revenue line should trace back to invoices issued during the reporting period.
Step 3: Calculate cost of goods sold
For trading and manufacturing businesses, cost of goods sold (harga pokok penjualan) covers direct material, labor, and overhead costs attributable to the goods sold. Service businesses typically present service delivery costs in this position instead.
Step 4: Classify operating expenses
Salaries and wages, rent, marketing, utilities, depreciation, and professional fees all belong in operating expenses. Each category should match the chart of accounts in the general ledger.
Step 5: Add other income and other expenses
Interest income, gains on asset sales, and foreign exchange differences sit below operating profit. Keeping them separate preserves the operating margin that lenders and investors rely on.
Step 6: Compute net profit and reconcile it with tax
Net profit before tax flows into the annual corporate income tax return. Any differences between accounting profit and taxable profit should be documented in a reconciliation schedule.
What Must a Complete Laba Rugi Include?
A complete laba rugi moves from net revenue down to net profit after tax, with every line supported by underlying accounting records.
Most Indonesian statements follow the multi-step format, which presents gross profit, operating profit, and net profit in sequence. The illustrative figures below show how the line items connect. They use an 11 percent effective reduced rate under Article 31E for the illustrated domestic corporate taxpayer with Rp850 million turnover; this rate applies only where the taxpayer meets the relevant turnover conditions, and is not the general corporate income-tax rate.
Copyable laba rugi template:
- Net revenue: Rp …
- Cost of goods sold: (Rp …)
- Gross profit: Rp …
- Operating expenses: (Rp …)
- Operating profit: Rp …
- Other income and expenses, net: Rp …
- Profit before tax: Rp …
- Income tax: (Rp …)
- Net profit: Rp …
PSAK presentation also requires the current period and the comparative prior period to appear side by side, together with notes explaining the significant accounting policies. A statement without comparatives is treated as incomplete for statutory purposes.
Sample Annual Laba Rugi at the 2026 Corporate Rate
| Line Item | Amount (Rp) | Basis |
|---|---|---|
| Net revenue | 850,000,000 | Invoices issued in the period |
| Cost of goods sold | (520,000,000) | Direct material, labor, overhead |
| Gross profit | 330,000,000 | Revenue less cost of goods sold |
| Operating expenses | (180,000,000) | Salaries, rent, marketing, utilities |
| Operating profit | 150,000,000 | Core business result |
| Other expenses, net | (10,000,000) | Interest and sundry items |
| Profit before tax | 140,000,000 | Carried to the annual return |
| Income tax at 11 percent | (15,400,000) | Article 31E rate for the illustrated domestic corporate taxpayer |
| Net profit | 124,600,000 | Distributable result |
What Tax Obligations Follow From the Income Statement in 2026?
The 2026 standard corporate income tax rate is 22 percent, payable through monthly PPh 25 instalments; eligible taxpayers may instead use the 0.5 percent MSME final tax on turnover.
Each line of the statement feeds a specific tax filing, and the DJP's electronic systems enforce strict cut-offs. All e-filing deadlines are measured in the Western Indonesia time zone, so late-evening submissions can miss the deadline by a few hours. For treaty relief claimed through PPh 26, retain the relevant Form DGT and its receipt with the withholding records. These obligations derive from the Income Tax Law, Government Regulation No. 20 of 2026 and Minister of Finance Regulation No. 81 of 2024. Businesses that follow a fixed filing calendar, such as one maintained by 3E Accounting Indonesia, avoid the administrative penalties that apply to late filings.
1. Corporate income tax at 22 percent in 2026
The standard corporate income tax rate for 2026 is 22 percent of taxable profit. The annual return (SPT Tahunan PPh Badan) is due by April 30 of the following year, with a possible two-month extension through the tax portal.
2. Monthly instalments and withholding obligations
PPh 25 corporate instalments are generally due by the 15th of the following month. They are normally calculated from the prior year's income tax payable, less specified tax credits, divided by 12. PPh 21 employee withholding and PPh 23 services withholding must generally be paid by the 15th of the following month. Their monthly returns are due by the 20th of the following month. Non-resident service providers claiming treaty treatment must give the withholding agent a valid Certificate of Domicile (SKD), or its receipt. This is required for PPh 26 purposes.
3. The 0.5 percent MSME final tax option
Government Regulation No. 20 of 2026 keeps the 0.5 percent final tax for eligible domestic individual taxpayers, one-person PTs, and cooperatives with annual turnover not exceeding Rp4.8 billion. An individual pays no income tax on the first Rp500 million of annual turnover. An individual or one-person PT may use the facility until it no longer meets the eligibility criteria or elects the general income tax rules. A cooperative may use it for up to four tax years from registration. The DJP permits eligible taxpayers to keep simple turnover records instead of full bookkeeping, although a basic income statement remains valuable for tracking growth toward the threshold.
2026 Indonesian Tax Deadlines Tied to the Income Statement
| Obligation | Deadline | Notes |
|---|---|---|
| PPh 25 corporate instalment | 15th of the following month | Monthly prepayment sized from the statement |
| PPh 21 employee withholding | 20th of the following month | Paid by the 15th, filed via Coretax |
| PPh 23 services withholding | 20th of the following month | 2 percent on qualifying services, paid by the 15th; PPh 26 applies to non-residents |
| SPT Masa PPN (VAT return) | Last day of the following month | 11 percent effective on most transactions |
| Annual corporate income tax return | April 30 of the following year | 22 percent rate, two-month extension possible |
MSME Final Tax vs Standard Corporate Tax in 2026
| Feature | MSME 0.5 Percent Final Tax | Standard Corporate Tax |
|---|---|---|
| Eligibility | Individuals, one-person PTs, and cooperatives with annual turnover up to Rp4.8 billion | All entities, mandatory above the threshold |
| Rate | 0.5 percent of turnover | 22 percent of taxable profit |
| Bookkeeping | Simple recording of turnover permitted | Full PSAK financial statements |
| Expense claims | No deductions; flat rate on turnover | Deductible with supporting documents |
What Are the Most Common Mistakes When Preparing an Income Statement?
The mistakes that most often distort an Indonesian income statement include:
- mixing personal and business transactions
- recognizing revenue on a cash basis when accrual applies
- ignoring accruals, prepayments, and depreciation at year end
- leaving accounting profit unreconciled with the tax return
Each of these errors compounds. When directors mix personal spending with company accounts, gross profit becomes unreliable and the DJP may disallow expenses during an examination. Cash-basis recognition also understates receivables and misstates the period in which revenue belongs.
Skipping depreciation, accruals, and prepayments overstates profit and forces adjustments later, often at penalty rates. Finally, a statement that does not reconcile to the corporate tax return invites queries and delays any financing process. Many companies therefore place monthly bookkeeping and statement preparation with 3E Accounting Indonesia.
Conclusion
An income statement is the bridge between day-to-day bookkeeping and every statutory obligation a company faces in Indonesia. It must satisfy several statutory tests:
- follow PSAK presentation
- be denominated in Rupiah
- reach the AGMS within six months of the fiscal year end
- reconcile with the annual corporate tax return at the standard 22 percent rate for 2026
Small businesses electing the 0.5 percent MSME final tax still need reliable turnover records to remain within the scheme.
We help clients who need to know how to make an income statement without building an in-house finance team. 3E Accounting Indonesia is a Corporate Services Provider. We provide:
- PSAK-compliant monthly reports
- Coretax filings
- financial statements aligned with DJP requirements throughout the year
For support with statement preparation, bookkeeping, or tax compliance in Indonesia, contact our team for a consultation.
Need Support With Financial Statements in Indonesia?
Let 3E Accounting Indonesia prepare your laba rugi, monthly reports, and tax filings so your business stays compliant and audit-ready.
Frequently Asked Questions
Yes. Both terms describe the laporan laba rugi, which summarizes revenues, expenses, and profit or loss over a defined period. Indonesian companies present it as part of the annual financial statements.
No. Government Regulation No. 20 of 2026 applies the 0.5 percent final tax to eligible domestic individual taxpayers, one-person PTs, and cooperatives with turnover not exceeding Rp4.8 billion. Individuals and one-person PTs may move to the general income tax rules, while cooperatives may use the facility for up to four tax years from registration.
The statutory requirement is annual, ready for the AGMS within six months of the fiscal year end. Many companies also prepare monthly or quarterly statements for management and PPh 25 instalment planning.
Generally no. Books and statutory financial statements are kept in Indonesian Rupiah unless the Minister of Finance has permitted US dollar bookkeeping. Foreign-currency transactions convert using the official Ministry of Finance exchange rates for tax settlement.
The standard corporate income tax rate for 2026 is 22 percent. The annual return is due by April 30 of the following year, supported by monthly PPh 25 instalments due on the 15th.
Abigail Yu
Director
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.
