VAT Registration in Indonesia

Value-added tax is levied on taxable goods and/or services in Indonesia. Our team can help you with VAT registration in Indonesia when your business exceeds the registration threshold.

Are foreign companies required to register for VAT in Indonesia?

A foreign company that sets up its physical presence in Indonesia is required to register for VAT purposes in the same way a local company would, according to its gross revenue (see below for the exact threshold).

When are local companies subject to VAT registration in Indonesia?

VAT registration is not automatic, nor does it take place alongside the general steps for company formation in Indonesia.

A locally registered company is required to register for VAT purposes when the value of the taxable goods and/or services exceeds IDR 4.8 billion (approximately USD265,574) in a fiscal year.

What are the main VAT registration steps?

Our team presents the main steps required to register a company for VAT in Indonesia:

• Determine eligibility: Ensure that your company meets the eligibility criteria for VAT registration in Indonesia. Businesses with an annual turnover above a certain threshold are required to register for VAT;
• Prepare required documents: Gather the necessary documents, which typically include your business registration certificate, tax registration number – Nomor Pokok Wajib Pajak (NPWP), articles of association, and other relevant corporate documents. It’s advisable to consult with our company incorporation expert in Indonesia who can guide you through the registration process, ensuring compliance with local tax laws and regulations;
• Submission: Visit the official website of the Indonesian tax authority (Direktorat Jenderal Pajak) and access the online VAT registration portal. You may need to create an account with the help of our specialists;
• Verification: Your application and accompanying documents will undergo scrutiny by the tax authorities. Also, following the submission of your application, a tax officer will conduct a field visit to your company premises to verify the accuracy of the information provided. It is crucial to ensure that your office is operational and that there is a representative available during the visit;
• Approval: Following the field verification, a decision will be rendered within five business days. If your application is approved for VAT registration, you will receive an access code for the online VAT system. Once you obtain this code, the business director can manage VAT matters online in the Coretax system (in use since January 2025).

Are there any exemptions to the VAT registration requirement?

Karimun Island, Bintan Island, and Batam Island Free Trade Zones alllow businesses to skip the VAT registration in Indonesia. Furthermore, the supply of taxable goods and imports of taxable goods within the free trade zones are VAT-exempt. Additionally, the supply of intangible goods within these zones is also exempt from VAT.

What are the VAT rates?

In 2026, the VAT rates in Indonesia are as follows:

• 12% standard rate;
• 0% reduced rate.

In practice, it is common for the 12% standard rate to only apply to certain luxury goods. This is because of an existing tax imposition base, which reduces the effective tax to 11%.

Generally, VAT is collected at the time of delivery.

According to the law, the VAT rate can be increased or decreased via a Government Regulation, but only following a discussion with the Parliament.

What types of goods and services are subject to VAT in Indonesia?

Most types of goods and services are subject to this tax. This includes tangible and intangible goods, as well as digital services.

What types of goods and services are exempt from VAT in Indonesia?

Exported services (used outside Indonesia) that are zero-rated include the following:

• repair and maintenance;
• freight-forwarding on goods for export;
• R&D services;
• some consulting services;
• financial audit and tax services, along with accounting.

What are the general VAT filing and payment requirements?

Once the company is registered for VAT purposes, it becomes liable for accurate and lawful reporting and payment. A VAT-registered company will issue invoices that state the applicable VAT value for its delivery of taxable goods and/or services.

The following payment and filing requirements are relevant for Indonesian companies that pay this tax in 2026:

• Compliance with the VAT self-assessment system;
• Filing the monthly VAT return by the end of the month following the one for which the payment is made;
• Making the required VAT payment before filing a new VAT return;
• Using the electronic VAT invoice mechanism, as required, to validate the issued VAT invoice directly.

In the case of e-commerce activities, the applicable VAT for these types of operations can be collected, remitted, and reported by foreign traders and/or domestic providers for the foreign company’s e-commerce activities if they are appointed as VAT collectors (subject to the regulations set forth by the Directorate General of Taxes).

If you have questions about VAT registration in Indonesia, please contact us.