Newest Import Duties in Indonesia: 2025 Update

A new governmental regulation stipulates that import duties in Indonesia have been effective since March 5, 2025. This regulation is the Finance Ministerial Regulation (PMK) No.4/2025 and it was enacted to reduce the maximum value for imported goods to be tax-free.

According to PMK 4/2025 issued by the Ministry of Finance, the maximum value of tax-free items for import into Indonesia will be decreased from US$75 to below US$3 for each recipient and shipment.

Understanding Import Duties, Tariffs, and Taxes in Indonesia

Importing goods into Indonesia involves navigating customs regulations and various taxes. Here’s a comprehensive breakdown to help you understand the costs of import duties in Indonesia:

Import Duties:

• Tax Exemption (Below USD 3): Goods in this category are exempted from import duties and taxes.
• Tiered Rates (USD 3 up to USD 1,500): A tiered rates of 0%, 15%, and 25% applies on the same FOB value range, depending on the commodity
• HS Code Based (Over USD 1,500): For shipments exceeding USD 1,500, the specific duty rate depends on the product’s Harmonized System (HS) code. This code categorizes goods internationally, and Indonesia uses it to determine import taxes. You’ll need to refer to the HS code and consult Indonesian customs authorities for the exact rate applicable to your product.

Value-Added Tax (VAT):

Under PMK No. 4/2025, all imported goods are generally subject to an 11% Value-Added Tax (VAT), in line with Indonesia’s standard tax policy. However, a higher VAT rate of 12% is imposed on certain luxury goods, such as high-end residences, private aircraft, and yachts—distinct from the standard rate to reflect their non-essential nature.

In specific cases, VAT exemptions apply to ease the import process for particular categories of consigned goods. These include goods sent by Hajj pilgrims and prizes from international competitions or awards, provided they meet the eligibility criteria set out in the regulation. These provisions are intended to reduce the tax burden on personal or honorary imports while maintaining fair tax treatment for high-value luxury items.

Income Tax:

Income tax on imported goods is determined by the applicable import duty rate. Items taxed at 15% or 25% import duty are subject to a 5% income tax, while goods with a 0% import duty are exempt from this tax.

Furthermore, for imported goods taxed according to their HS code classification, the applicable income tax rate depends on whether the importer holds a Tax Identification Number (NPWP). If the importer possesses an NPWP, a 10% income tax will apply, otherwise, the rate increases to 20% for those without an NPWP.

Additional Considerations:

• Excise Tax: Certain goods like alcoholic beverages and tobacco products may be subject to additional excise taxes aimed at controlling their import and consumption.
• Payment Responsibility: The receiver of the imported goods is typically responsible for these taxes and duties. However, some freight forwarders might offer options for the sender to pre-pay these charges. Remember: It’s always advisable to check the HS code for your specific product and consult Indonesian customs regulations for the most up-to-date information on import duties and taxes.

Import Tax Regulations in Indonesia

Under the newly issued PMK No. 4/2025, the tax treatment for imported goods into Indonesia has been refined. Previously, based on PMK No. 199/2019, all taxable imported goods were subject to a 7.5% import duty, 10% value-added tax (VAT), and a 10% income tax, totaling 27% in import-related taxes.

With the implementation of PMK 4/2025, the structure has changed:

• Import duties are now applied progressively at 0%, 15%, or 25%, depending on the commodity.
• A 5% income tax is only charged on goods subject to the 15% or 25% import duty.
• VAT remains at 11%, following the updated national VAT rate.

This means that for many items, especially those falling under the 0% duty category, importers now only pay 11% VAT, reducing the overall tax burden significantly. Even for goods in the 15% or 25% duty brackets, the total payable tax is often lower than the previous 27% rate, offering substantial relief to importers.

However, this new regulation excludes certain categories such as footwear, bags, and garments, which remain subject to higher duties or specific trade policies.

As a result, many e-commerce businesses are optimistic that the streamlined tax structure under PMK 4/2025 will stimulate consumer demand, support local sellers engaged in cross-border trade, and contribute to narrowing Indonesia’s trade deficit.

The Exception: Batam

PMK 4/2025, like its previous regulations, applies to all regions in Indonesia. However, Batam remains a controversial region due to its status as a free trade zone area, and all goods imported into Batam are not subject to import taxes in Indonesia 2025 and Indonesia import duties – unless the goods are further distributed to other Indonesian regions from Batam.

Therefore, to continue bringing more foreign exchange to Indonesia with the international trade traffic in Batam, the new regulation only applies to imported goods released from Batam to other Indonesian regions.

Free Trade Agreements and Import Tariffs in Indonesia

In addition to the above, import tariffs from countries with trade agreements with Indonesia will differ. The first is import tariffs between Australia, New Zealand, and ASEAN countries. The second one is between South Korea and ASEAN countries. The third one is between India and ASEAN countries. And the fourth one is between China and ASEAN countries.

Restricted or Prohibited Goods to Import to Indonesia

Importing goods into Indonesia can open doors to exciting business opportunities, but navigating the regulations can feel overwhelming. This guide simplifies the process by breaking down the key aspects you need to consider for a smooth import experience.

Prohibited Goods to Import to Indonesia

Indonesian authorities prioritize national security, public health, and cultural heritage. To safeguard these, they strictly control the import of certain items. These are strictly banned due to their potential harm. Examples include:

• Illegal drugs and psychotropic substances
• Hazardous and toxic materials (B3)
• Ozone-depleting substances
• Obscene and pornographic content
• Counterfeit items and those that infringe on intellectual property rights
• Second-hand clothing, electronics, and other used items
• Weapons, including firearms, ammunition, and explosives without proper authorization
• Certain food and beverage products containing harmful additives or not meeting health standards
• Wildlife products such as human skeletons, specific sea shells, beef, animal fats and oils, exotic birds (except a few specified ones), wild animals, their parts, and certain live birds and animals

In addition, antiques and certain chemicals face a complete import ban to protect cultural heritage and public safety.

Restricted Items to Import to Indonesia

Importing these requires special permits and adherence to specific regulations. This category includes:

• Iron and steel products
• Textile and textile products (fabrics, garments, and home textiles)
• Footwear (shoes, sandals, and boots)
• Electronics and telecommunication devices
• Cosmetics and personal care products
• Children’s toys for under 14 years
• Food and beverage products (processed foods, beverages, and supplements)
• Agricultural products including rice, sugar, and horticultural products
• Second-hand machinery and equipment
• Waste and scrap materials

Understanding Duties and Exemptions: How Much Will You Pay?

Most imported goods incur import duties in Indonesia, which are essentially taxes levied by the government. However, there are some exceptions that can save you money:

Dutiable Goods

These are items that are subject to import duties in Indonesia, which are essentially taxes levied by the government on the value of the imported goods. The duty amount varies depending on the specific product and its HS code (explained later). Here are some examples of dutiable goods and their associated import charges:

• Luxury Cars: Be prepared for a progressive additional luxury goods tax (PPnBM) ranging from 10% to 200% based on factors such as engine capacity and classification. This is in addition to the regular import duty and VAT, making luxury vehicles one of the most highly taxed import categories.
• Alcoholic Beverages: Expect tariffs to be applied, with rates varying between 5% and 20% depending on the type of drink you’re importing (e.g., wine, beer, spirits).
• Branded Shoes: These are subject to a specific import duty up to 25%

Exempt or Reduced Rate Goods

• Duty-Free Items: Goods with a Free on Board (FOB) value up to USD 3, such as low-value personal items or small online purchase, are fully exempt from import duties and taxes.
• Reduced Rates: For goods within this value range, a tiered import duty system applies at 0%, 15%, or 25%, depending on product type. Goods with 0% duty are exempt from income tax, while 5% income tax will be applied for goods with 15% or 25% duty.
• Special Exemptions: Certain consigned goods such as items sent by Hajj pilgrims and international competition awards are exempt from import duty, VAT, and income tax if specific criteria are met (e.g. value cap, shipment limits).

Importance of Research: Mastering the HS Code

To ensure a smooth import experience and avoid any unexpected delays or charges, researching your specific goods using the Harmonized System (HS) code is highly recommended. This internationally recognized system assigns a unique code to each product, allowing Indonesian customs authorities to efficiently determine the applicable duties and restrictions. You can find the HS code for your product through the manufacturer or online resources.

The official Indonesian customs website is another valuable resource for staying updated on the latest import regulations. Don’t hesitate to consult it for the most current information.

How does the Customs Clearance Procedure Work in Indonesia?

In the realm of international trade, customs clearance is a fundamental process. It ensures that goods can move seamlessly across borders while adhering to the regulations and requirements of the importing country. As a key player in global trade, Indonesia has well-established customs clearance procedures in place. 

Step-by-Step Procedure

The customs clearance process in Indonesia is a well-structured sequence of steps. It begins with the submission of necessary documents, followed by an examination of the cargo, an assessment of duties and taxes, and ultimately, the release of goods once all requirements are met.

Customs Duties and Taxes

Importers are often required to pay customs duties and taxes on their imported goods. These charges may vary depending on the type of goods and their value. Accurate assessment and payment of these duties are essential to avoid delays and legal issues.

Customs Valuation

Customs authorities in Indonesia determine the value of imported goods to assess taxes and import duties Indonesia. This valuation process is crucial for establishing the correct financial obligations of importers.

Inspections and Examinations

Inspections and examinations are part of the customs clearance process to ensure that the goods match the descriptions in the provided documentation. These may include physical inspections of the cargo or document reviews.

Compliance and Declarations

Importers must make accurate and truthful customs declarations. Falsifying information or attempting to evade customs duties and taxes can lead to severe consequences. Compliance with customs regulations is crucial.

Ways to Calculate Import Duties and Taxes

Importing goods into Indonesia can involve various charges, including import duties, taxes, and potential excise fees. Understanding these costs can help you accurately estimate your total import expenses and plan your budget accordingly. Here’s a breakdown of the key steps involved:

Identify Your HS Code

The Harmonized System (HS) code is a unique identifier assigned to every product category on a global scale. Indonesian customs authorities rely on this code to determine the applicable import duties and taxes for your specific goods. You can find the HS code for your product through the manufacturer, online resources, or by consulting the Indonesia Customs Tariff directly.

Estimate Import Duty

Once you have the HS code, you can estimate the import duty, which is usually calculated as a percentage of the Cost, Insurance, and Freight (CIF) value of your goods. Here’s how to calculate the CIF value:

Total Value in IDR (Indonesian Rupiah): (Total Value in USD + Total CIF) multiplied by the current IDR exchange rate. CIF: (Cost of Freight on Board + Insurance + Freight Cost) multiplied by the exchange rate.

Import Duty Formula

Import Duty = Customs Duty Tariff (0%, 15%, or 25%) x CIF Value

• Applies to goods with a value between USD 3 and USD 1,500.
• Above USD 1,500, duty is based on the specific HS code rate.

Calculate Value Added Tax (VAT)

The standard VAT is 11%, but a 12% VAT applies to certain luxury goods (e.g. yachts, luxury homes).

VAT = VAT Rate (11% or 12%) x (CIF Value + Import Duty)

Factor in Article 22 Income Tax (if applicable)

Two conditions apply under PMK 4/2025:

• For tiered-rate goods (0%, 15%, 25%):
  • 5% Income Tax only applies to items subject to 15% or 25% import duty.
  • 0% Income Tax for items with 0% duty.
• For HS Code–Based Imports (> USD 1,500):
  • 10% if the importer has NPWP
  • 20% if the importer doesn’t have NPWP

The income tax applied for certain imported goods and is calculated as follows:

Article 22 Income Tax = Tariff (5%, 10%, 20%) x (CIF Value + Import Duty)

Luxury Goods Sales Tax (LGST) (only applicable to luxury items)

Applies only to luxury items and is calculated on top of CIF, Import Duty, and Income Tax (if applicable). Rate varies from 10% to 200% depending on product type and classification.

Luxury Goods Sales Tax = Tariff Rate x (CIF Value + Import Duty + Article 22 Income Tax)

Excise Tax (applies to specific excisable goods)

This tax is based on a pre-determined volume or quantity of the specific excisable good, using special rates set by the Ministry of Finance. The excise tax applies to alcoholic beverages, tobacco products, and carbonated or sugary drinks.

Types of Import Permits in Indonesia

This is essential for all importers, but there are different types depending on your business activities:

• General API (API-U): For companies importing for trade purposes.
• Specific API (API-P): Needed for manufacturers importing raw materials or capital goods.
• Other variations (API-T, API-K): Exist for specific situations (direct investment, contractors).

Extra Permit for Specific Goods: NPIK (Special Importer ID)

• Required for importing sensitive goods like electronics or textiles.
• Often involves additional approvals from relevant ministries (e.g., electronics certification).

How to Obtain Import License

1. Set Up Shop: Register your business legally in Indonesia (PT or PMA).
2. Get Tax ID: Secure a Taxpayer Identification Number (NPWP).
3. Gather Documents: Prepare your business registration documents, company details, and potentially a recommendation letter from the Chamber of Commerce.
4. Choose Your Import License Type: Decide if you need a General API or a Specific API based on your import activities.
5. Apply and Wait: Submit your application with the Ministry of Trade (local office might be involved). Approval can take weeks.
6. Customs Registration: After approval, get a Customs Registration Number (NIK) for clearance.
7. Stay Compliant: Keep up-to-date on regulations, pay duties and taxes, and follow any additional requirements for your specific goods.

Remember: An API doesn’t automatically grant import rights. Some products might require extra permits or certifications.

The Procedure of Indonesian Customs

Indonesia, like many nations, has specific customs procedures to manage goods entering and leaving the country. These ensure proper duty collection and regulate border movement. Here’s a quick rundown:

Documentation Essentials

Gather key documents like invoices, certificates of origin, bills of lading, packing lists, and insurance certificates. You’ll also need the Harmonized System (HS) code for your goods and potentially a Material Safety Data Sheet (MSDS).

The Customs Process

1. Declare Your Goods: Electronically submit a detailed customs declaration for your imports/exports.
2. Valuation & Taxes: Indonesian customs will assess the value of your goods to determine import duties and taxes. Ensure accurate information to avoid delays.
3. Inspections & Permits: Be prepared for physical inspections and obtain any necessary permits or licenses for specific goods.
4. Clearance & Delivery: Once checks are complete and duties paid, your goods will be cleared for entry or export. Arrange for their transport within Indonesia or internationally.
5. Record Keeping: Maintain customs documents and transaction records for a set period, as they might be needed for audits.

Additional Considerations

• Restricted/Prohibited Goods: Be aware of limitations on certain items due to legal or safety concerns.
• Customs Brokers: Consider using a licensed customs broker to navigate the complexities and ensure compliance with Indonesian regulations.
• Duty Exemptions & Incentives: Some goods or industries may qualify for duty exemptions or incentives under government programs. Research if your imports or exports are eligible for such benefits.

Following these steps and staying informed about regulations can help ensure a smooth import or export experience in Indonesia.

Seeking Assistance: Make it Easy on Yourself with InCorp Indonesia

Navigating import regulations, especially for first-time importers, can be a complex task. If you’re feeling unsure about any aspect of importing goods, consider consulting a customs broker or freight forwarder. InCorp Indonesia, a leading provider of corporate services in Indonesia, offers a team of experienced customs brokers who can be invaluable in ensuring your shipment arrives safely and efficiently, minimizing any delays or potential issues.

InCorp Indonesia’s customs brokerage services can help you with:

• HS code classification: Ensuring your goods are categorized correctly for accurate duty calculations.
• Duty & tax calculations: Taking the guesswork out of import costs.
• Permits & licenses: Obtaining any necessary permits or licenses for restricted items.
• Customs clearance: Streamlining the clearance process for a faster import experience.

By partnering with InCorp Indonesia, you can gain peace of mind knowing your import process is in the hands of experts. Their comprehensive services and local knowledge can help you navigate the complexities of Indonesian import regulations with confidence. Focus on your core business activities while InCorp Indonesia takes care of the import logistics.