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One of the business owner’s biggest concerns when they set up a company in Indonesia is ensuring they adhere to the correct working practices and that means paying the correct taxes and VAT.
Many new business owners ask whether they need to register for VAT and this depends on a few different factors; but before we get there, let’s clarify what it is and who it is relevant to.
Value-Added Tax (VAT) is a tax imposed on most goods and services within Indonesia. The standard taxable rate is 11%; however, some goods or services are charged at different rates ranging from 5 – 15% in accordance with Indonesian Regulations.
It should be noted that Indonesia levies a separate GST on the sale of luxury items, which ranges between 10% and 50%.
In general, your business is required a VAT registration number when it reaches an annual revenue of 4.8 billion IDR (Approx. 360,000 USD).
Must-Know Services Before Register VAT Number
As well as different VAT identification number rates, some business services issue are subject to 0% VAT, which as of 1st April 2019 includes:
Services connected to movable goods, utilised outside of the Customs Area that comprise:
- Toll manufacturing services
- Repair and maintenance services
- Freight forwarding services on export-oriented goods.
Services connected to return immovable goods located outside of the Customs Area in the form of consultation services for construction.
Other services where the output is utilised outside of the Customs Area and utilisation are based on a request from an overseas business recipient. These services comprise:
- Information and technology services
- Inter-connection, satellites, and/or data connectivity services
- Research and development (R&D) services
- The rental of aircraft and/or ships for an international flight for shipping activities
- Trading services that help find domestic sellers to procure goods for export turnover.
- Certain consultation services, accounting services, financial audit services, and tax services, among others.
Additional notes:
If your company is considered as Pengusaha Kena Pajak (PKP) you must report your VAT invoice related to taxable turnover business activity monthly.
Companies with several branches must threshold register each branch with the Kantor Pelayan Pajal (KPP).
Required Documents
To register for VAT, businesses must submit several documents, including:
- Application Form: A filled-in registration form for VAT application.
- Company Registration Documents: The company’s establishment deed and other relevant corporate documents.
- Director’s Documents: Documents for the company’s director, such as their identification and tax ID
The Steps Involved During The Indonesia VAT Registration Number Process are:
- Submit the required VAT Documents to the Tax Office
- Collect the VAT Certificate
- Submit for VAT account
- VAT account (username and password) will be sent through the email
T: 021 300 297 27 E: [email protected] or Visit us in our office Bellagio Mall, Jl. Mega Kuningan Barat Kav.E4 No.3, Setiabudi, Jakarta 12930, Indonesia or fill in the contact form below!
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