Indonesia: New implementing regulations of VAT law

The issuance of the regulations are within the framework of the Indonesia tax reform.

The issuance of the regulations are within the framework of the Indonesia tax reform.

New implementing regulations of the recently reformed value added tax (VAT) law were issued. The notable changes include:

  • VAT on foreign e-commerce transactions
  • VAT on sales of certain liquefied petroleum gas, tobacco products, subsidized fertilizer for the agriculture sector (other VAT base regime)
  • VAT on self-construction activity and sales of certain agricultural products, used motor vehicles and certain VAT-able services (final VAT regime)
  • VAT-able and non-VAT-able goods and services subject to regional tax
  • Tax administration on transactions with the government
  • Trading of cryptoassets
  • Financial technology (fintech)
  • VAT invoice and administration

KPMG observation

The issuance of the regulations (14 PMKs and PER-03/2022) are within the framework of the Indonesia tax reform. Tax professionals expect there are more changes to come to provide clarification and/or guidance needed for the implementation of the reformed VAT Law, for instance VAT on the sales of electricity.

Read a July 2022 report [PDF 550 KB] prepared by the KPMG member firm in Indonesia


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