Indonesia value added tax guide
Indonesian value added tax mechanism is through offsetting of VAT input and VAT output.,
Tax payer with certain turnover (IDR4.8billion) is obligated to collect value added tax on the sales of goods or provision of services. Those with certain turnover shall be registered first as taxable entreprise (pengusaha kena pajak) before collect VAT (VAT Output) and use VAT paid to third party (related to business activity) as a VAT input credited to VAT output on monthly period.
Value added tax rate
Generally, value added tax rate is 10 percent on domestic transaction. Export transaction VAT rate is 0%, import of goods and services are 10%.
Goods except commodities are subject to value added tax. Services except for service for public facilities, education, and healthcare are exempted from value added taxes (there is a list for certain services exempted from VAT collection).
Value added tax reporting date
Value added tax reporting deadline is on the end of subsequent month. VAT reporting is done on monthly basis.
Overpayment of VAT
On the condition of Value added tax input is higher than VAT out collected, any balance of overpayment is carry forward to compensate with VAT out during the year. At the end of the year it is an option for company to apply for VAT refunds or carry forward to compensate with VAT out on next years.
VAT paperwork and IT system
Indonesian VAT system in 2015 required taxable entrepreneur to use electronic faktur pajak (tax invoice or e-faktur) as a legitimate tax collection invoice replace the hardcopy faktur pajak (tax invoice). The use of e-faktur made it easy to validate the faktur pajak from third party before make payment or entry the VAT input to monthly VAT reporting.
This Indonesia value added tax guide summary is delivered to give a brief information about vat in Indonesia, we advice you to consult with professional tax adviser before do any action, we are not responsible on your action to use the contents in this page.