Many taxpayers assume that once they have obtained a Tax Identification Number (Nomor Pokok Wajib Pajak/NPWP), it should remain active indefinitely. However, under Indonesia’s tax regulations, an active NPWP continues to carry tax rights and obligations, even if the holder no longer earns income or no longer qualifies as a taxpayer.
To improve administrative certainty and ensure taxpayer records accurately reflect current circumstances, the Directorate General of Taxes (DJP) introduced a mechanism allowing eligible taxpayers to change their status to Inactive Taxpayer (Wajib Pajak Nonaktif) under Director General of Taxes Regulation PER-7/PJ/2025.
For individuals and businesses whose tax obligations have changed, updating their NPWP status can help prevent unnecessary reporting requirements and potential administrative sanctions in the future.
What Is an Inactive Taxpayer Status?
An Inactive Taxpayer (Wajib Pajak Nonaktif) status allows eligible taxpayers to suspend their active tax obligations when they no longer meet Indonesia’s tax requirements.
Rather than leaving an active NPWP attached to someone who no longer has taxable income or tax responsibilities, the regulation enables taxpayers to formally update their status with the Directorate General of Taxes.
The purpose is to maintain accurate taxpayer data while aligning each taxpayer’s obligations with their actual circumstances.
Who Can Apply for Inactive NPWP Status?
Under PER-7/PJ/2025, several categories of Indonesian resident individual taxpayers may apply to become inactive.
Employees or Individuals Without Taxable Income
Individuals who do not operate a business or independent profession, are currently unemployed, or earn income below Indonesia’s Non-Taxable Income Threshold (PTKP) may be eligible to request inactive taxpayer status.
Former Business Owners or Freelancers
Individuals who previously operated a business or worked as independent professionals may also apply if they have permanently ceased all business or freelance activities and no longer receive income from those activities.
Married Women Whose Tax Obligations Are Combined with Their Husband
A married woman who chooses to combine her tax rights and obligations with her husband’s tax registration may also request inactive taxpayer status.
Although her National Identity Number (NIK) remains registered, her tax obligations will follow her husband’s taxpayer profile.
Indonesian Citizens Becoming Foreign Tax Residents
The regulation also provides a mechanism for Indonesian citizens whose tax residency status has changed.
Individuals Preparing to Become a Foreign Tax Resident
Indonesian citizens planning to become a Foreign Tax Subject (Subjek Pajak Luar Negeri/SPLN) may apply for inactive taxpayer status if they are in the process of meeting the applicable requirements.
Individuals Who Have Already Become Foreign Tax Residents
Indonesian citizens who have officially qualified as foreign tax residents may also apply, as they no longer meet the criteria of an Indonesian domestic taxpayer.
Other Circumstances
Inactive status may also be requested by individuals who no longer satisfy either the subjective or objective requirements to remain registered as Indonesian taxpayers under prevailing tax regulations.
Can Companies Also Apply?
Yes. The inactive taxpayer mechanism is not limited to individuals.
Corporate Taxpayers
Companies that no longer meet the requirements to remain active taxpayers—but whose NPWP has not yet been deleted or is still undergoing deregistration—may also apply for inactive status.
Government Institutions
Government agencies that no longer function as tax withholding or collecting entities may likewise request inactive taxpayer status if their NPWP has not yet been formally removed.
Why Updating Your NPWP Status Matters
Leaving an NPWP active after your tax circumstances have changed may create unnecessary administrative obligations.
An active NPWP may continue to require tax reporting or other compliance obligations under Indonesian tax regulations. Failure to fulfil these obligations could expose taxpayers to administrative issues or penalties in the future.
Updating your taxpayer status helps ensure that your tax records accurately reflect your current circumstances while reducing the risk of future compliance issues.
How to Apply for Inactive Taxpayer Status
Applications for inactive taxpayer status are submitted to the Directorate General of Taxes (DJP) together with supporting documentation demonstrating that the applicant no longer fulfils the criteria of an active taxpayer.
Because eligibility varies depending on each taxpayer’s circumstances, applicants should ensure they prepare the appropriate supporting documents before submitting their request.
Professional tax advice can also help determine whether applying for inactive status is the most appropriate option, particularly for expatriates, former business owners, or individuals relocating overseas.
Stay Compliant with Indonesian Tax Regulations with LMI Consultancy
Tax obligations do not always end when employment ceases, a business closes, or an individual leaves Indonesia. Keeping your NPWP status aligned with your current circumstances is essential to maintaining compliance and avoiding unnecessary administrative complications.
At LMI Consultancy, our tax specialists assist individuals, expatriates, and companies with comprehensive Indonesian tax services, including NPWP registration and deactivation, tax residency assessments, annual tax reporting, corporate tax compliance, and ongoing tax advisory.
Whether you are leaving Indonesia, closing a business, changing your tax residency, or reviewing your current tax obligations, our consultants can help ensure your tax affairs remain compliant with the latest Indonesian regulations.
Stay updated and stay compliant with Indonesia’s latest tax, immigration, and business regulations with LMI Consultancy. Speak with our consultants today to claim your complimentary one-hour consultation.
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