Indonesia: Guidance implementing VAT on offshore e-commerce transactions

Indonesia: Implementing VAT on offshore e-commerce

The Director General of Tax issued guidance implementing the rules for value added tax (VAT) imposed on offshore e-commerce transactions.


The guidance—Regulation No. PER-12/PJ/2020 (25 June 2020)—implements the VAT rules that were effective 1 July 2020. In general, these rules provide that VAT is imposed at a rate of 10% on offshore intangible taxable assets and/or services within Indonesia provided by means of e-commerce. Read TaxNewsFlash

The implementing guidance addresses the VAT collection, payment, and reporting mechanisms for “e-commerce business providers” (those that conduct business by delivering offshore intangible taxable assets or services within Indonesia by e-commerce means). In general, the obligation to collect VAT from payments made by Indonesian buyers and customers is the responsibility of the e-commerce business providers (either e-commerce foreign or domestic providers, or offshore traders). The Indonesian tax office will appoint the e-commerce business providers as VAT collectors if the transactions satisfy certain thresholds in the Indonesia market.

Read a July 2020 report [PDF 176 KB] prepared by the KPMG member firm in Indonesia

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