Value-Added Tax (VAT) is a tax imposed on most goods and services in the Indonesian Customs Area. In other words, it is a consumption tax applied to each production stage until the final product sales. Therefore, Indonesia VAT has impacts on both end consumers and businesses.
Cekindo has put together a basic guide with some key points concerning Indonesia VAT that every business owner must be aware of as it will affect your business and customers in the country.
VAT rates in Indonesia are described in detail as follows:
The calculation of VAT is through applying your VAT rate to its tax base. The tax base is agreed between the concerned parties with regard to the transaction value. Some events must be used as tax base as well and they are listed as follows:
Here are the goods that are non-taxable under VAT in Indonesia:
Non-taxable services under VAT in Indonesia are listed as follows:
Companies that are considered as Pengusaha Kena Pajak or PKP, must report their VAT and related business activities monthly. Companies with several branches must register each branch with the Kantor Pelayanan Pajak or KPP. VAT liabilities are settled with an input-output mechanism (input tax and output tax).
VAT refunds are applicable in Indonesia. Companies can submit the refund applications at the end of a book year. The decision of VAT refund is done by the Directorate General of Taxes (DGT) and it depends largely on the VAT audit carried out within 12 months upon the receipt of refund application.
Application is considered approved as well if there is no decision made. Companies are then required to submit the supporting documents to the DGT within a month.
Update from government: More Scope of Services in Export are Exempted from Value-Added Tax
At Cekindo, we believe in providing the most professional and streamlined tax services to our customers, including VAT reporting and VAT refund. Our experts with in-depth knowledge of tax laws in Indonesia will assist you in dealing with all tax-related situations.
To know more about how Cekindo can help your company navigate the complex tax system in Indonesia, get in touch by filling in the form below.