Explore the requirements and rules that apply to indirect taxes in Indonesia.
What supplies are liable to the standard rate?
The delivery of taxable goods by an entity in Indonesia; the importation of taxable goods; the rendering of taxable services in Indonesia; utilization in Indonesia of intangible taxable goods from outside Indonesia; utilization of offshore taxable services in Indonesia; the disposal of fixed assets and export services by an entity in Indonesia, except for certain categories of exported services as set out further below.
Are there any reduced rates, zero- rates or exemptions and if so, what do they apply to?
Zero rated: exports of goods and exports of certain services, including:
Exempt: deliveries and/or the import of taxable goods designated as strategic goods by the government; and certain goods or other services in order to support the achievement of certain national objectives.
VAT not collected: deliveries of goods to a bonded zone; and deliveries of goods and services to a free trade zone.
VAT free (not subject to VAT): certain goods and services that are not subject to VAT. For example, goods that are taken directly from their source (e.g., crude oil, natural gas, coal), financial services (e.g., banking, insurance and finance leasing), etc. Hotels, restaurants and entertainment are not subject to VAT — instead, they are subject to local taxes referred to as PB1, which is not a creditable tax.
Indonesian taxpayers (companies and individuals) with annual turnover of more than 4.8 billion Indonesian rupiah (IDR).
Is voluntary registration possible?
Is voluntary registration available for an overseas company or a fiscal representative?
Yes, those items include:
Can an overseas company recover VAT if it is not registered?
How long does it typically take to obtain a VAT refund following a return filing?
VAT refunds can only be claimed at the end of the fiscal year (normally in the December VAT return), except for certain types of businesses. VAT refund claims usually result in a tax audit being opened and can take many months, up to 1 year, before any refund payment is made.
Yes, a VAT invoice must show a code and serial number; details of the supplier; details of the purchaser; details of the goods and services; price; discount (if any); advanced payments (if any); the tax collection basis; the amount of VAT payable; sales tax on luxury goods (if applicable); date; and name and signature.
All information within this guide is provided by KPMG professionals in Indonesia and based on information available as of September 2019.