Residential taxation means that you pay taxes based on where you live. Many countries use a version of the “183 days” principle. This means that if you spend at least half your time living in the country, you’re taxed on your worldwide income.
Of course, it’s rarely that simple. The majority of countries have criteria you need to fulfill in order to prove you don’t have ties to that country. Different countries will have different rules on what “ties” you to them. Some of the common ties are: a Wife (or husband), kids, real estate that you own but don’t rent, a car that you own, bank accounts you’ve set up…the list goes on.
Disqualifying yourself from residential taxation can be a bit complex, depending on the country. It’s not impossible, but it will take a thorough understanding of the residential tax laws (and some smart flag planting). The payoff is worth it. When you prove you don’t have ties to a country, you’re no longer deemed a resident. This means you no longer pay tax on your worldwide income.
http://nomadcapitalist.com/flag-theory/
Okay. So what about Indonesia. What would be required to be free from income tax in Indonesia. Would a person need to be outside 180 days in a year?