Indonesian VAT rates

The standard rate of value added tax (VAT) in Indonesia is 11%. There are no reduced rates, though there are a number of exemptions.

The following rates apply to taxable supplies:

Among VAT-exempt goods are food and beverages served in restaurants and hotels, and products obtained from drilling or mining such as natural gas, crude oil, coal, gold ore, iron ore, and copper ore. Also exempt are rice, eggs, milk, fruit, meat, sugar, soybeans, and salt.

VAT-exempt services include religious services, entertainment, hotel services, parking, catering, art services, educational services, medical and health services, public transportation services, and financial services.

Businesses must register for VAT in Indonesia if their annual revenue exceeds IDR 4.8 billion. Businesses can register for VAT voluntarily if they do not breach this threshold.

Businesses must submit their registration application online to the Indonesian Tax Office within one month of reaching the registration threshold.

Businesses must provide documents of incorporation, a Taxpayer Identification Number (NPWP), and proof of their business premises. Other supporting documents and information may be requested.

Upon successful completion, businesses will be issued with a VAT registration number.

Non-domestic businesses

Overseas businesses without a physical location in Indonesia must appoint a tax representative to handle VAT compliance obligations on their behalf.

The tax representative must be an Indonesian resident.

Businesses must file VAT returns on a monthly basis, and payment is due at the end of the following month after the tax period.

Penalties for noncompliance can include a fine of IDR 1 million for late registration, a fine of 2% of the VAT payable for late VAT returns, having to pay interest at 2% per month on the unpaid amount for late payment, and a fine of 1% of the transaction value for failing to comply with invoicing requirements.

Tourists to Indonesia can apply for a VAT refund to recover VAT on goods they purchased while visiting the country. Purchases must be made from stores listed by the Indonesian government as VAT Refund for Tourist Participants.

Businesses must include the following information within their invoices to customers to be compliant:

• Business name and address

• Business VAT number

• Invoice date

• Invoice sequencing number

• Description of the goods or services

• Rate of VAT applied to each item

• Total amount including VAT

Non-resident businesses supplying digital goods or services (intangible taxable goods) in Indonesia are required to charge VAT at a rate of 10% and remit to the Indonesian government. VAT has been applied to digital goods and services in Indonesia since July 2021.