VAT Registration in Indonesia

Updated on Monday 17th January 2022

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The taxation system in Indonesia is made up of several levies which apply to both companies and individuals. If companies are levied the corporate tax and individuals the personal income tax, which are direct taxes, there are also indirect levies among which the value added tax (VAT) or the goods and services tax (GST) is the most important one. The VAT applies to certain goods and services sold in Indonesia.

Our Indonesia company formation consultants can offer more information on how the VAT is applied.

If you are interested in other matters, such as how to immigrate to Indonesia, we can also provide you with details.

Goods and services taxable under the GST in Indonesia

Companies or sole traders in Indonesia must levy the value added tax on the following:

-          the delivery of goods;
-          the delivery of services;
-          the import of certain taxable goods;
-          the export of certain taxable goods or services;
-          the consumption and use of goods, respectively services from abroad.

The standard VAT rate in Indonesia is 10%, however there are also certain services and goods which are exempt from the VAT or are applied lower rates. Also, the VAT can be increased or decreased to 15%, respectively to 5% by the government. Investors who immigrate to Indonesia for the purpose of starting a business should be aware of these rates.

It should be noted that Indonesia levies a separate GST on the sale of luxury items which ranges between 10% and 50%.

Our company registration agents in Indonesia can offer more information on the VAT rates.

Goods and services exempt from the VAT in Indonesia

Indonesian companies are required to supply the following VAT-exempt goods and services:

-          mineral and natural resources;
-          commodities, such as basic food products;
-          food and drinks supplied by hotels and restaurants;
-          money and securities;
-          educational services;
-          financial services;
-          insurance services;
-          healthcare services;
-          touristic services.

There are also other services which are exempt from the VAT.

In order to levy the GST, Indonesian companies must register for VAT and report the liabilities resulted from the sale of taxable goods and services on a monthly basis. Also, at the end of every financial year, companies are entitled to file for VAT refunds with the tax authorities in Indonesia.

For full information on how to value added tax is applied in Indonesia, please contact us. You can also rely on our company formation advisors if you want to start a business in Indonesia.

We also offer assistance to those who immigrate to Indonesia.