VAT Compliance in Indonesia: Rates, Invoices and Input VAT

VAT compliance in Indonesia is a monthly routine for a company registered for value added tax, a Pengusaha Kena Pajak (PKP).

It charges VAT on each sale and issues an e-Faktur, the electronic tax invoice. It claims back the VAT it paid on purchases, known as input VAT. Then it pays the balance and files a return by the end of the following month (Minister of Finance Regulation, PMK 81/2024, Articles 94(3)(e) and 171(13)).

Getting registered is covered in our guide to VAT registration in Indonesia. This article is about what comes after.

The rate, and what it comes to on a price

The VAT rate is 12% (VAT Law, Article 7(1), as amended by UU 7/2021). For almost everything it is charged on a tax base of 11/12 of the price, which comes to 11% of the price. Only luxury goods that also carry luxury-goods sales tax (PPnBM, Pajak Penjualan atas Barang Mewah) are taxed on the full price (PMK 131/2024, Articles 2 and 3).

A few supplies use a tax base of their own or a fixed amount instead (PMK 131/2024, Article 4). Exports are charged at 0%. A service sold abroad qualifies only if it is on the Minister of Finance’s list, and only with a written contract and proof of payment; otherwise it is treated as a sale inside Indonesia (PMK 81/2024, Articles 280 and 282). We advise exporters on whether a service qualifies.

Zero-rated, not collected or exempt: what you can still claim

Three kinds of sale show no VAT on the invoice, and they look alike. They differ on the point that costs money: whether the seller can still claim the input VAT on what it bought to make them.

A zero rate is not an exemption, which is why an exporter keeps its claim. Which goods and services are exempt, and which have their VAT not collected, is set by Government Regulation under Article 16B(1) of the VAT Law, so the answer depends on exactly what the company sells.

A short list sits outside VAT altogether. It is mainly restaurant meals, hotel rooms, parking, entertainment and catering, which the regions tax instead, together with money, gold bullion for the central bank’s reserves, securities, religious services and core government services (VAT Law, Article 4A, as amended by UU 7/2021).

One invoice, from sale to monthly return

Every e-Faktur is made in the e-Faktur module of the taxpayer portal, or an application from a provider the Directorate General of Taxes (DGT) has appointed (PER-11/PJ/2025, Articles 40–41). The serial number is assigned when it is uploaded and approved (Article 43).

1. 1
   On the sale

   Make the e-Faktur

   On delivery, or on payment if that comes first (VAT Law, Article 13(1a)).

2. 2
   By the 20th of next month

   Get it approved

   Upload it for the tax office’s approval (PER-11/PJ/2025, Article 44).

3. 3
   By the end of next month

   Pay, then file

   The return is due even in a month with nothing to report (PMK 81/2024, Articles 94 and 171).

4. 4
   Three months after the invoice month

   Last month to claim

   The buyer’s final chance to claim the input VAT (VAT Law, Article 9(9)).

When the month-end date falls on a weekend or public holiday, both the payment and the return move to the next working day (PMK 81/2024, Articles 100 and 173). The date is on our Indonesia compliance calendar.

Sales to the same buyer in one calendar month can go on a single combined invoice, made by the end of that month (VAT Law, Article 13(2)–(2a); PMK 81/2024, Article 383). For a buyer that is an Indonesian company, the invoice carries its name, address and tax ID (PMK 81/2024, Article 385(1)). How the e-Faktur module fits into the rest of the tax office’s system is covered in our guide to Coretax for companies.

Services bought from abroad: VAT you pay yourself

A foreign supplier cannot issue an e-Faktur, but what it supplies can still carry Indonesian VAT. When a company uses a service or an intangible from abroad inside Indonesia, the company accounts for the VAT itself (VAT Law, Articles 3A(3) and 4(1)(d)–(e)). In our work the usual examples are a foreign parent’s management fees, royalties for a group brand, and software licences.

The rate and base are those of a sale inside Indonesia: 12% on 11/12 of the amount paid or payable (PMK 131/2024, Article 3; PMK 81/2024, Article 1 item 181). The VAT becomes due at the earliest of four moments: first use, booking the cost as payable, the supplier’s invoice, or payment (VAT Law, Article 11; PMK 40/PMK.03/2010, Articles 4 and 5).

It is paid by the 15th of the following month, not by the month end shown in the steps above (PMK 81/2024, Article 94(2)(i)). A VAT-registered company then reports it in its monthly VAT return (Article 171(13)). The payment slip, with the supplier’s invoice attached, stands in for the tax invoice (PER-11/PJ/2025, Articles 62(k) and 63(1)(b)).

For a VAT-registered company, this VAT is input VAT and can be claimed back in the same month (Elucidation of the VAT Law, Article 9(2), as amended by UU 7/2021; PMK 81/2024, Article 375(4)). Where the company’s own sales are taxable, it usually costs nothing overall.

VAT already collected by someone else is not paid twice:

• If a foreign platform appointed by the DGT charged Indonesian VAT on its invoice, the buyer does not self-assess it again (PMK 81/2024, Articles 332–339).
• Since 25 September 2026, appointed banks and payment providers collect VAT on some foreign digital purchases that no platform collected; where nothing was collected, the company self-assesses (PMK 49/2026, in force 20 July 2026; DGT announcement PENG-6/PJ/2026 and press release SP-22/2026).

The same payment usually carries Article 26 income tax as well, covered in our guide to withholding on payments abroad. For VAT-registered clients, our VAT compliance work covers the self-assessed VAT.

Where input VAT gets lost

Input VAT on purchases not directly related to the business cannot be claimed either (VAT Law, Article 9(8)(b)). We check suppliers’ invoices before input VAT is claimed.

When input VAT is more than output VAT

In a month when the input VAT is larger than the VAT charged on sales, the difference carries forward to the next month. A refund can be requested at the end of the book year, or every month by exporters, suppliers to VAT collectors and suppliers whose VAT is not collected (VAT Law, Article 9(4)–(4b)).

An ordinary refund request is decided within 12 months (General Tax Law, or KUP, Article 17B(1)). Some businesses qualify for a faster preliminary refund under PMK 28/2026, in force since 1 May 2026. We prepare VAT refund requests; support through an audit that can follow is a separate fee. Income tax overpayments have their own refund routes.

What VAT compliance in Indonesia means for you

Once the company is registered, the same few steps repeat every month: an approved invoice for each sale, a check on each supplier’s invoice, and a return. A late return carries a fixed charge of IDR 500,000 (KUP, Article 7(1)). PMK 81/2024, which sets the monthly deadlines, is published in the Audit Board’s legal database.

VAT compliance in Indonesia is a separate engagement within our corporate tax services. Depending on what is agreed, we issue the tax invoices or check the ones you issue, and file the monthly VAT return, working from books that our bookkeeping and accounting services can keep. To work out the VAT on a single price, use the VAT calculator.