Indonesia VAT (PPN) Guide - Value Added Tax System Explained with Rates, Registration & Filing

VAT (PPN) in Indonesia

Indonesia operates a Value Added Tax (VAT) system known as Pajak Pertambahan Nilai (PPN). It applies to the sale of goods and services, imports, and digital products, and is governed by the Directorate General of Taxes (DGT) under the Ministry of Finance.

The Indonesian VAT system is invoice-based and applicable to businesses meeting specific thresholds or engaging in certain taxable activities.

📊 VAT (PPN) Rates in Indonesia

As of 2025, the applicable VAT (PPN) rates are:

• ✅ 11% – Standard VAT rate (increased from 10% in April 2022)
• 🔼 12% – Proposed rate (expected in 2025 or later depending on economic conditions)
• ❌ 0% (Zero-Rated) – For exports of goods/services and specific international activities

The standard VAT rate applies to the majority of goods and services, both domestic and imported.

🏢 VAT Registration in Indonesia

💼 Mandatory Registration (PKP):

Businesses must register as Pengusaha Kena Pajak (PKP) (Taxable Entrepreneurs) if their annual revenue exceeds IDR 4.8 billion (~USD 300,000).

📝 Registration Process:

• Register with the Directorate General of Taxes (DGT)
• Obtain a Tax Identification Number (NPWP)
• Activate PKP status and start issuing VAT invoices

🌐 VAT on Digital Services (Foreign Providers)

Since July 2020, foreign digital businesses are required to collect 11% VAT on sales to Indonesian consumers.

Examples include:

• 🎬 Streaming services (Netflix, Spotify)
• 📱 Apps and games (Google Play, App Store)
• ☁️ SaaS and cloud services
• 📧 Email marketing platforms

Foreign providers must register through DGT’s online system and file regular VAT returns.

🔢 Indonesian VAT Number Format

A VAT-registered business in Indonesia uses the NPWP (Nomor Pokok Wajib Pajak) for identification.

Format Example:

01.234.567.8-901.000

This number must be clearly mentioned on all VAT invoices and tax documents.

🧾 VAT Invoice Requirements

Known locally as Faktur Pajak, a valid VAT invoice must include:

• Seller and buyer names, NPWP numbers
• Invoice number and date
• Description of goods/services
• VAT amount (11%) and total price
• Taxable base amount (DPP)

Invoices must be issued electronically (e-Faktur) using government-approved software.

💻 VAT Calculation Example

Example 1 – Domestic Service

Price: IDR 10,000,000

VAT @ 11%: IDR 1,100,000

Total Invoice = IDR 11,100,000

Example 2 – Export of Goods

Price: IDR 50,000,000

VAT: 0% (Zero-rated)

Total Invoice = IDR 50,000,000

📅 VAT Return Filing (e-Filing)

All VAT-registered businesses must file monthly VAT returns (SPT Masa PPN):

• 📆 Due Date: 30th of the following month
• 💻 Platform: https://djponline.pajak.go.id
• 📄 Form: e-SPT or e-Faktur integration

Late filing or non-compliance results in penalties and interest under Indonesian tax law.

📥 Imports & 📤 Exports

Imports:

Imported goods are subject to 11% VAT, payable at customs.

Exports:

Exported goods and services are zero-rated (0%), but exporters must still file returns to claim input VAT credits.

🚫 VAT Exemptions in Indonesia

Not all transactions are subject to VAT. Some exemptions include:

• 🏥 Medical and healthcare services
• 📚 Education services
• 🚆 Public transportation
• 🏦 Banking and financial services
• 🕌 Religious services
• 🛢️ Mining products (under specific conditions)

These are non-taxable, and businesses cannot claim input tax credits on related purchases.

💡 Compliance Tips for Businesses

• ✅ Register for VAT (PKP) if revenue exceeds the threshold
• ✅ Always issue valid e-Faktur VAT invoices
• ✅ Keep clear records of purchases and sales
• ✅ File VAT returns on time every month
• ✅ Foreign digital businesses must register and remit VAT
• ✅ Stay updated with regulatory changes by the Ministry of Finance

Indonesia’s VAT (PPN) system plays a vital role in the country’s revenue collection and economic structure. With increasing digitization and stricter enforcement, both local and foreign businesses must ensure full compliance.

👉 Try the Indonesia VAT Calculator 🇮🇩 on GSTCal.org to calculate accurate VAT for your goods, services, or digital sales!