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VAT Registration in Indonesia
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A major concern for entrepreneurs establishing businesses in Indonesia centers around compliance with correct work practices, particularly concerning tax and VAT obligations.Â
Value Added Tax (VAT) is a tax imposed on most goods and services within Indonesia.
It should be noted that Indonesia levies a separate GST on the sale of luxury items, which ranges between 11% and 12%.
Additionally, the Indonesian VAT registration threshold is IDR 4.8 billion sales per annum. Paper-based applications for VAT registrations should be submitted to the regional tax office of the business. Once registered, the tax payer is granted a Tax Identification Number (TIN) of 15 digits.
VAT Rate
- General VAT Rate: 12%
- Effective VAT Rate: A VAT rate of 11% applies to the majority of taxable goods and services. Using an alternative valuation method (Dasar Pengenaan Pajak/DPP Nilai Lain), the 12% rate is applied to the tax base, thus achieving this result. The DPP Nilai Lain is 11/12 the selling price. The calculations in MoF 131/2024 cannot be used by taxpayers who previously used the "other value" or "certain amount" methods under other regulations.
- Luxury Goods: A 12% VAT rate is applicable to the import and domestic delivery of luxury taxable goods which are currently subject to Luxury-goods Sales Tax. These include motor vehicles, luxurious residences with a selling price of at least IDR 30 billion, private aircraft, luxurious private cruisers, shotguns, etc. Between 1st and 31st January, 2025, domestic deliveries to end consumers will be subject to a 12% VAT rate calculated on the Other Value Tax Base (Dasar Pengenaan Pajak/DPP Nilai Lain). With the DPP Nilai Lain set at 11/12 the selling price, the effective VAT rate is 11%. A 12% rate will be applied to the standard tax base (selling price) starting 1st February, 2025.
- Goods/Services with Special Rules: Taxable goods and services already under special DPP Nilai Lain rules, or those with a specific VAT percentage outside of PMK-131 regulations, remain subject to existing regulations.
- Export: There is no VAT charged on exported goods. A zero VAT rate applies to specific exported services; though, the Minister of Finance (MoF) has restrictions on this.
- Import: Starting 1st January 2025, imported goods will be subject to a 12% VAT.
The criteria of Digital Goods that subjected to VAT in Indonesia?
PMK-48/2020 provides a definition of digital goods. Under the VAT law, all digital goods are taxable. Examples include, but are not limited to, ebooks, e-magazines, and e-comics.
Important Notes: An extra 2% is levied on people who do not report periodic VAT. Register your VAT now!
Document Requirements
- Identity and contact details of Company Shareholders:
- For Indonesian Individuals, KTP and NPWP
- For Foreign Individuals, valid passport
- Identity and contact details of Company Directors and Commissioner
- For Indonesian individuals, KTP, NPWP, email and phone number
- For Foreign Individuals, valid passport, email and phone number
- Copy of Lease Agreement between company and building management
- Copy of Tax ID
- Copy of Business License
- Copy of Registration Number (NIB)
- For Indonesian Companies, copy of Article of Establishment
- For Foreign Companies/entities, copy of Article of Association in English or its translation in Bahasa Indonesia from a sworn translator
- Tax slip / Tax receipt of company (PPh pasal 4 ayat 2)
- Copy Land and Tax Building (PBB/Pajak Bumi Bangunan)
- Access to open PIC Coretax system
- Other required Documents
Register Your Tax ID in Indonesia with LMI Consultancy
- Consult your inquiry with our professional consultant
- Submit necessary document
- Proceed with the payment
- Application process
- Receive the complete document
Other Popular Tax Management Services in Indonesia
Setup a Business in Indonesia with LMI Consultancy
Established in 2016, LMI Consultancy has been supporting countless individuals in understanding the intricacies of visas, business setup, tax & accounting, and property investment in Indonesia, providing a comprehensive and dependable service.Â
We take pride in being an ethical and innovative company that places a strong emphasis on exceptional customer service and strives to set a new standard in our industry, guaranteeing a smooth and encouraging experience for our clients.
FAQ
Our Indonesia based company only uses the tools integrated under our global system. Is our local company exempted from VAT?
VAT exemption doesn’t apply to tools integrated into your global system if they relate to the object specified in PMK-48/2020.
What are categorised as Digital Products?
Products existing and used entirely in electronic form are classified as digital products. Email, downloads, and website logins are all ways customers can access these goods and services.
- E-books, images, movies, and videos, whether buying a copy from Shopify or using a service like Netflix.
- Downloadable and streaming music platform, whether buying an MP3 or using a service like SoundCloud or Spotify.
- Cloud-based software and as-a-Service products, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).
- Websites, site hosting services, and internet service providers.
- Online ads and affiliate marketing.
What are included in the VAT Report?
To be compliant with Indonesian tax regulations, please include this information on customer invoices:
- Your business name and address
- Your business VAT number
- Invoice date
- Invoice sequencing number
- Description of the goods or services
- Rate of VAT applied to each item
- Total amount including VAT
Disclaimer : Our services in LMI Consultancy provide consulting services focused on ensuring client compliance with applicable immigration and legal regulations in Indonesia. We do not provide or facilitate the production of official government documents, nor do we offer any expedited or preferential access to government services.
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