This tax guide provides an overview of the indirect tax system and rules to be aware of for doing business in Indonesia.

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Indirect tax snapshot


Please click on each section to expand further:

What is the principal indirect tax?

Value Added Tax (VAT) is the principal indirect tax in the Indonesia. VAT due on the following taxable events, among others:

  • import and export of taxable goods
  • local supply of taxable goods and/or services
  • consumption of services and/or intangible goods from offshore within the Indonesian customs zone
  • assets/inventories left behind in the course of a company’s dissolution
  • supply of goods through a third party or a government auctioneer
  • supply of goods through a finance lease arrangement
  • self-use of taxable goods
  • delivery of taxable goods in the context of a Syariah financing arrangement, which delivery is considered to be directly from the VATable entrepreneur to the party that needs the taxable goods
  • taxable goods given away at no charge (free goods)
  • export of intangible taxable goods and taxable services.

Particular goods and services are not subject to VAT. These include:

Non-taxable goods

  • food and beverages served in restaurants, including food and beverages delivered by catering businesses
  • money, gold bars, and commercial paper.

Non-taxable services

  • religious services
  • educational services
  • arts and entertainment services
  • hotel services
  • services provided by the government in respect of carrying out general governmental administration
  • parking provision services; and
  • catering services.

However some exemptions apply to particular goods/ situations/taxpayers.

Is there a registration limit for the tax?

Registration as a VAT entrepreneur in Indonesia is based on delivery of taxable goods and/or services. Entrepreneur whose gross cumulative revenue exceeds particular amount is required to apply for a VATable entrepreneur status. However, some exemptions apply for particular taxpayers, including those domicile in ‘free trade zone’.

Non-established business could not register for VAT, unless they have a permanent establishment in Indonesia or appointed as VAT E-commerce collector by Indonesian Tax Authority

Does the same registration limit apply to non-established businesses?

There is no requirement for VAT registration for businesses that are not established in Indonesia, unless they have a permanent establishment in Indonesia that earns VAT income or doing E-commerce activity in the Indonesian market.

Is there any specific legislation to tax non-resident supplies of electronically supplied/digital services to private consumers resident in your country?

Yes, on 1 July 2020, DGT effectively implementing a regulation about Value Added Tax on transaction through electronic system (Perdagangan Melalui Sistem Elektronik -PMSE). In General, this regulation stipulate that VAT should be imposed at rate of 10% on foreign intangible taxable goods and/or services transaction for E-commerce Business.

Does a non-established business need to appoint a fiscal representative in order to register?

Not applicable.

How often do returns have to be submitted?

The general VAT Returns should be submitted on a monthly basis. However, for VAT Report on E-commerce should be submitted quarterly for a period of three Tax Periods. Meanwhile, the VAT Collector (ie Government Treasurer, corporate, or Government agency designated by the Minister of Finance – (MoF)) who doesn’t have a collected VAT transaction or has a transaction which is not subject to VAT or exempted from VAT or not qualified for VAT, do not have the obligation to submit the VAT return.

Are penalties imposed for the late submission of returns/ payment of tax?

Yes. Penalty of IDR500,000 for late submission and penalty approximately of 2% per month based on the applicable MoF interest penalty regulation for late payment of the VAT payable, calculated from the due date until the date of payment, maximum for 24 months.

Are any other declarations required?

General no, the VATable entrepreneur should only submit VAT return on a monthly basis, unless the taxpayer is (also) appointed as VAT Collector or E-commerce VAT Collector.

Are penalties imposed in other circumstances?

Yes. Penalties of 1% from the transaction value should be imposed for late issuance of VAT invoice or issuance of incorrect VAT invoice.

Can the VAT incurred by overseas businesses be claimed if they are not registered in Indonesia?


What information must a VAT invoice show?

A VAT invoice should show at least the following:

  • name, address, Taxpayer Identification Number or ID Number (Nomor Induk Kependudukan – NIK) who delivers Taxable Goods of Taxable Services
  • name, address, Taxpayer Identification Number or ID Number Number (Nomor Induk Kependudukan – NIK) of the buyer of Taxable Goods or recipient of Taxable Services
  • type of goods or services, Sales price or replacement and price discounts
  • value added tax which collected
  • sales Tax on Luxury Goods which collected
  • code, serial number, and date of creating the Tax Invoice and
  • name and signature of who are entitled to sign Tax Invoice.
    However there are particular documents which its position equated with VAT invoice.
Are there any current or anticipated Standard Audit File for Tax (SAF-T) or similar electronic/digital filing requirements eg invoice listing data file/real-time VAT reporting?

Indonesia does not have the SAF-T requirement, e-Faktur and Web-based e-Faktur are the current electronic/digital devices required to issue a tax invoice and to submit the VAT return respectively.

VAT on E-Commerce

On 1st July 2020, DGT effectively implementing a regulation about Value Added Tax on transaction through electronic system (Perdagangan Melalui Sistem Elektronik - PMSE). In General, this regulation stipulate that VAT is Imposed at rate of 10% on foreign intangible taxable goods and/or services transaction for E-Commerce Business in Indonesian market.

To carry out VAT on PMSE, DGT is appointing a foreign company that meets the criteria as a tax collector who has customers in Indonesia even though the company does not have an entity, permanent establishment or PT in Indonesia and not an Indonesian resident. Hence, if the DGT has appointed a company to collect VAT, therefore the products sold by the company to Indonesia’s customer should be subject VAT.

The following are the PMSE VAT collector criteria:

  • The value of transactions with customers in Indonesia exceeds IDR600 million in a year or IDR50 million in a month; and/or
  • The amount of traffic or access in Indonesia exceeds 12,000 users in a year or 1,000 users in a month.

The appointed VAT Collectors should collect and pay the VAT from customers as well as submit VAT Return through the designated electronic tax filing system provided by DGT.




Contact us

For further information on indirect tax in Indonesia please contact:


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Tommy David
T +62 (21) 5795 2700

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