Indonesia raises VAT registration threshold

Indonesia has raised its VAT registration threshold.  The aim is to lift the VAT compliance reporting burden for small and medium sized businesses.

The new threshold was set last month, and came into place on the 1 January 2014.  The new registration threshold is IDR 4.8bn per annum taxable turnover.  The previous threshold was IDR 0.6bn.

Value Added Tax (Pajak Pertambahan Nilai) in Indonesia is set at 10%.  Tax registered businesses must complete monthly VAT returns.  Foreign companies may not register for Indonesian VAT, and there is no facility for the recovery of local VAT by a non-established company.