How the Money Flows

Five scenarios showing why it matters where the owner's share is separated — and where things are heading.

SCENARIO 1 Proposed Structure The owner's share is taken out before the money reaches Indonesia
🌏 International
🇮🇩 Indonesia
Guest
books a villa
pays→
Airbnb
pays out→
Your Australian
Company
↗
Owner's share
stays offshore→
Villa Owner
↘
Everything else
sent to Indonesia→
Your Indonesian
Company
↗
Management fee — earned in Indonesia
↘
Running costs
→
Operator
→
Pays staff, hotel tax,
income tax
✅ Clean and simple. No one in Indonesia pays a foreigner, so Indonesia's 20% foreign payment tax is never triggered. The management fee is earned in Indonesia. The operator runs a real, visible business. All Indonesian taxes are paid.
SCENARIO 2 All Money Goes to Indonesia First Then someone in Indonesia has to send the owner their share — and that's the problem
🌏 International
🇮🇩 Indonesia
Guest
pays→
Airbnb
all money→
Operator in
Indonesia
owner's share→
Villa Owner
(overseas)
⚠️ Indonesia's 20% foreign payment tax is triggered
❌ The 20% tax isn't even the biggest problem. To pay it properly, the operator has to register as a foreign payment tax agent, file monthly returns showing payments to a foreigner, and create a documented trail. The Indonesian tax office now sees: who is this foreigner? Why are they getting money every month? What's the real arrangement here? That's the question that causes real problems — even if you pay the 20% correctly.
SCENARIO 3 What Italy Did — And Indonesia Will Likely Follow Italy forced Airbnb to collect tax before paying the host
Guest
pays→
Airbnb
↗
21% taken out
sent directly→
Italian Tax Office
↘
Remaining 79%
paid to host→
Host
Italy made Airbnb the tax collector. The platform takes the tax out before anyone sees the money. Italy went through the exact same stages Indonesia is going through now — business licenses first, platform checks second, tax collection at source third. Indonesia is at stages one and two right now. Stage three is coming.
SCENARIO 4 Proposed Structure — When Indonesia Follows Italy The hotel tax is handled by Airbnb. Everything else works the same.
🌏 International
🇮🇩 Indonesia
Guest
pays→
Airbnb
↗
10% hotel tax
sent directly→
Indonesian
Tax Office
↘
After tax
pays out→
Your Australian
Company
↗
Owner's share
stays offshore→
Villa Owner
↘
Everything else
to Indonesia→
Your Indonesian
Company
→
Operator
✅ The structure doesn't just survive — it gets cleaner. The hotel tax is handled automatically by Airbnb. The owner's share is still separated offshore. The management fee is still earned in Indonesia. Nothing changes.
SCENARIO 5 All Money Through Indonesia — When Indonesia Follows Italy This is what "fully legal" actually looks like if everything goes through Indonesia. It doesn't work.
🌏 International
🇮🇩 Indonesia
Guest
pays→
Airbnb
↗
10% hotel tax
→
Indonesian
Tax Office
↘
Remaining 90%
all to Indonesia→
Operator in
Indonesia
↗
Owner's share
20% foreign
payment tax→
Villa Owner
(overseas) 💀
↗
Management fee
earned in Indonesia
but how does the
company owner
get paid?→
Foreign shareholder
20% again 💀
💀 What actually happens to the villa owner's money
Owner is owed per month $2,500
Indonesia takes 20% before it leaves the country - $500
Owner receives $2,000
Home country taxes them on the full $2,500 (e.g. 32.5%) $812 total tax
Best case — with perfect paperwork:
Owner gets credit for the $500 already paid in Indonesia. Only owes the difference to their home country: $812 - $500 = $312 more. Total tax across both countries: $812 (32.5%).

That's survivable — but it requires the Indonesian operator to produce a correct official tax receipt. And the owner has to deal with claiming foreign tax credits in their home country every year.
Worst case — without paperwork (the reality):
No official tax receipt from Indonesia = no credit. Home country charges the full $812 with no offset for the $500 already gone.

Owner pays: $500 (Indonesia) + $812 (home country) = $1,312 total — that's 52% of their income.

Will a small Indonesian operator correctly produce an official foreign tax withholding receipt for a foreign landlord? Almost never.
Realistic outcome — owner loses $1,312 / 52%
🔒 The management company has the same problem
The Indonesian company earns the management fee ✓ Taxed locally
But the owner of the company is a foreign person... →
Pay yourself a dividend? 20% foreign payment tax
Pay a fee to your Australian parent company? 20% foreign payment tax
Then your home country taxes it again on top + 30–45%
Money goes into Indonesia easily. Getting it back out legally is the problem. 💀

So what actually happens? There are only three options:

1️⃣ Pay the 20% properly. The owner loses over half their money when you add their home country tax. No foreign villa owner will accept this. And the company owner faces the exact same wall trying to get her own earnings out. The economics of the whole business collapse.
2️⃣ Don't pay it — and hope nobody notices. This is what most people actually do today. But with the new business licenses, platform checks, and tax reporting, the Indonesian tax office now has full visibility. They can see every payment going offshore. That's the opposite of being "fully legal."
3️⃣ Take the owner's share out before the money enters Indonesia. No one in Indonesia pays a foreigner. The 20% tax is never triggered. No paperwork nightmare. No double taxation. The operator still runs a real, compliant Indonesian business. This is Scenario 1.
❌ There is no version where all money flows through Indonesia AND foreign owners get paid AND everyone is fully compliant. It's not possible. The people who say they do it this way are almost certainly not paying the 20% — which means they're not actually legal. The only clean path is to separate the owner's share offshore, before the money enters Indonesia.

The Bottom Line

The only thing that stays offshore is the owner's share — and that's the one thing that has to stay offshore. Everything else enters Indonesia. The management fee is earned in Indonesia. The operator runs a real, visible, compliant Indonesian business.

Your Australian Company → Your Indonesian Company
Same company group. Simple transfer. Smarter accounting.