MSME Tax Is Changing in 2026: What PP No. 20/2026 Means for Your Business
30-second summary
- PP 20/2026 amends the MSME final income tax rules (PP 55/2022) and took effect on 22 April 2026.
- The rate is still 0.5% of gross revenue, with a revenue cap of IDR 4.8 billion a year.
- Individuals and PT Perorangan (single-founder companies) can now use it with no time limit.
- Regular PTs, CVs and Firmas registered from 22 April 2026 can no longer use 0.5%. Those registered earlier can finish their remaining period.
What is PP 20/2026?
PP 20/2026 is a government regulation that amends PP 55/2022, the rule that gives Indonesian MSMEs (UMKM) a final income tax of 0.5% of revenue. The scheme is popular because it is simple: record your revenue, pay 0.5% every month, and you don't have to calculate profit.
The regulation changes two things: who can use the scheme, and for how long.
Who can still use the 0.5% rate?
| Taxpayer type | Before (PP 55/2022) | Now (PP 20/2026) |
|---|---|---|
| Individual | Up to 7 tax years | No time limit |
| PT Perorangan | Up to 4 tax years | No time limit |
| Cooperative (koperasi) | Up to 4 tax years | 4 tax years from registration. Existing cooperatives whose period ends in 2024–2029 may continue to 2029 |
| CV / Firma | Up to 4 tax years | Not available if registered from 22 April 2026 |
| Regular PT | Up to 3 tax years | Not available if registered from 22 April 2026 |
| BUMDes / BUMDesma | Available, with a time limit | No longer listed |
One exclusion still applies: income from independent professional services (doctors, notaries, consultants, lawyers and similar) can't use this scheme. PP 20/2026 makes clear that influencers, content creators, bloggers and vloggers fall into this group too.
I have a CV or PT. What happens to it?
Registered before 22 April 2026: you can keep using 0.5% until your original period runs out — 3 tax years for a PT, 4 tax years for a CV or Firma, counted from the year you registered. For example, a CV registered in 2024 can use it through tax year 2027.
Registered from 22 April 2026: you go straight to the regular corporate rate of 22% on taxable profit, and you must keep full bookkeeping, not just a revenue record.
The good news: for revenue up to IDR 50 billion, Article 31E of the Income Tax Law cuts the rate by 50% on the share of profit that corresponds to IDR 4.8 billion of revenue. Below IDR 4.8 billion in revenue, the effective rate is roughly 11% of profit.
What are the revenue limits?
- IDR 4.8 billion a year for everyone who qualifies. If you pass it mid-year, 0.5% still applies until the end of that year. From the next year you must use regular rates, and you will usually need to register for VAT as a PKP.
- The first IDR 500 million is tax-free, for individuals only. Tax starts in the month your cumulative revenue for the year passes IDR 500 million. PT Perorangan doesn't get this allowance.
What does the calculation look like?
Individual, IDR 80 million revenue per month
| Month | Cumulative revenue | Taxable revenue | Final tax 0.5% |
|---|---|---|---|
| January – June | up to IDR 480,000,000 | IDR 0 | IDR 0 |
| July | IDR 560,000,000 | IDR 60,000,000 | IDR 300,000 |
| August – December | up to IDR 960,000,000 | IDR 80,000,000 / month | IDR 400,000 / month |
| Full year | IDR 960,000,000 | IDR 460,000,000 | IDR 2,300,000 |
PT Perorangan, IDR 80 million revenue per month
Without the IDR 500 million allowance, 0.5% applies from the first rupiah: IDR 400,000 a month, or IDR 4,800,000 a year.
Want to run your own numbers, with due dates? Use the PPh Final UMKM Calculator.
0.5% or regular rates — which is cheaper?
Not always 0.5%. As a rule of thumb, 0.5% of revenue equals 11% of profit when your net profit margin is about 4.5%.
- Margin above 4.5% (typical for services, cafés, products with healthy margins): 0.5% is usually lighter.
- Margin below 4.5% (for example, thin-margin trading): regular rates can cost less, as long as your books are in order.
Taxpayers who qualify for 0.5% can also choose regular rates by notifying the tax office (DJP). Run the numbers with your real figures before deciding.
What should I do now?
- Check your entity type and the year it was registered. That tells you whether you can still use 0.5% and until when.
- Track cumulative revenue every month, especially near IDR 500 million (individuals) and IDR 4.8 billion.
- Pay by the 15th of the following month. A payment with a valid NTPN counts as your monthly filing. See the dates in the Tax Calendar.
- If you're a CV or PT in the transition period, start full bookkeeping now so the switch to regular rates isn't a scramble.
- If you're about to set up a company, compare PT Perorangan, PT and CV first — the choice now affects your tax directly. Our comparison guide is in Bahasa Indonesia.
How can Hopemity help?
We help founders with the three things that cause the most headaches after PP 20/2026:
- Eligibility and tax scheme check: whether you can still use 0.5%, until when, and whether regular rates would cost you less.
- Monthly tax handled: we calculate, pay and file, and send you the proof every month.
- Bookkeeping for the switch: for CVs and PTs whose 0.5% period is ending.
See our services or answer 3 quick questions and get your next step on WhatsApp.
Calculate your final tax
Enter your monthly revenue and entity type. The calculator shows tax per month, due dates and whether you still qualify under PP 20/2026.
More questions
Does a PT Perorangan get the IDR 500 million tax-free allowance?
No. The IDR 500 million allowance is only for individual taxpayers. A PT Perorangan pays 0.5% on all revenue.
My CV was registered in 2024. Can it still use 0.5%?
Yes, until its 4-tax-year period ends, which is tax year 2027. From 2028 the CV must use regular corporate rates and keep full books.
I'm a content creator. Can I use the 0.5% final tax?
No. PP 20/2026 confirms that influencers, content creators, bloggers and vloggers are independent professional services, so their income is taxed at regular rates.
My revenue passed IDR 4.8 billion in October. What happens?
The 0.5% rate still applies until December that year. From the next year you must use regular rates and will likely need to register as a VAT-collecting business (PKP).
My revenue is under IDR 500 million. Do I still need to do anything?
Yes. There's no tax to pay, but you must still record revenue monthly and file your annual tax return.
Sources: DJP — PP 20/2026 (Indonesian) · DJP — A new era for MSME final tax (Indonesian) · Ortax — PP 20/2026 summary (Indonesian) · Ortax — PMK 81/2024 deadlines (Indonesian)
This article is general education based on regulations as of 30 September 2026, not tax or legal advice for a specific case. Rules can change, so talk to us about your situation before making decisions.