VAT Registration in Indonesia
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Our expert team will guide you through every step of the VAT registration process, providing personalized support to meet your business needs with ease and efficiency.
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What is VAT (Value Added Tax)One of the primary concerns for business owners establishing a company in Indonesia is ensuring full compliance with local regulations, particularly in relation to taxes and VAT. Navigating these requirements can seem daunting, but with the right guidance, your business can confidently operate within the legal framework while maximizing opportunities for growth.
A frequent question from new business owners is whether they need to register for VAT. The answer depends on several key factors, but before diving into the specifics, let’s first clarify what VAT is and who it applies to. As of April 1, 2022, the VAT rate in Indonesia stands at 11%, with an increase to 12% scheduled for January 1, 2025, having previously been 10%. Understanding these rates is crucial for businesses aiming to stay compliant and avoid penalties. In general, a company is required to register for VAT once its annual revenue reaches 4.8 billion IDR (approximately 360,000 USD). This threshold is a critical milestone for businesses expanding their operations and signals the need to engage in VAT obligations. |
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Must Know Before Register VAT Number
VAT is calculated by applying the VAT rate to the relevant tax base. In most cases, the tax base is the transaction value agreed upon between the parties involved. By law, all goods and services, unless otherwise stated, are considered taxable. However, there is a list of goods and services that are exempt from taxation.
Non-taxable goods
-Food and drinks served in hotels, restaurants, or for takeaway and delivery, including food and drinks delivered by caterers, as they are subject to regional tax.
-Money, gold bars for government foreign exchange transactions and securities.
Tax-free services
-Religious services.
-Public services provided by the government to carry out national issues that cannot be provided by other types of business.
-Services of hotels, catering establishments, art institutions, and entertainment establishments, which are subject to regional tax.
Additional notes:
If your company is considered as Pengusaha Kena Pajak (PKP) you must report your VAT related business activity monthly. Companies with several branches must register each branch with the Kantor Pelayan Pajak (KPP).
Non-taxable goods
-Food and drinks served in hotels, restaurants, or for takeaway and delivery, including food and drinks delivered by caterers, as they are subject to regional tax.
-Money, gold bars for government foreign exchange transactions and securities.
Tax-free services
-Religious services.
-Public services provided by the government to carry out national issues that cannot be provided by other types of business.
-Services of hotels, catering establishments, art institutions, and entertainment establishments, which are subject to regional tax.
Additional notes:
If your company is considered as Pengusaha Kena Pajak (PKP) you must report your VAT related business activity monthly. Companies with several branches must register each branch with the Kantor Pelayan Pajak (KPP).
The Steps Involved During the VAT Registration Process are
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Requirements for VAT Registration
- A Statement Letter declaring the conduct of business activities or independent work and the location of business activities or independent work, signed on a stamp by one of the managements and sealed.
- A photocopy of the deed of establishment or the founding documents and amendments.
- A photocopy of the company's NPWP card.
- A photocopy of the NPWP and ID cards (KTP) of all management members for Indonesian Citizens (WNI).
- A photocopy of the Annual Corporate Tax Return (SPT Tahunan Badan) submission proof for the last 2 years.
- A photocopy of the Annual Individual Tax Return (SPT Tahunan Orang Pribadi) submission proof for all management members for the last 2 years.
- A photocopy of the lease agreement or ownership certificate of the building (according to the ownership status of the business premises in the form).
- Photos of the business premises.
- Location map.
Partner With Trident Treehouse for Hassle-Free VAT Registration
When it comes to VAT registration, you deserve a professional team that understands your business needs. At Trident Treehouse, we provide expert guidance and a personalized approach, ensuring your registration process is smooth and fully compliant. Let us take care of the details, so you can focus on what matters most – driving your business forward. We're here to support you every step of the way.
