Indonesia: Additional implementing regulations of VAT law

One of the implementing regulations provides further guidance on the amended general provisions of the VAT law.

One of the implementing regulations provides further guidance on the amended general provi

The government in December 2022 issued three additional implementing regulations of the reformed value added tax (VAT) law. Read TaxNewsFlash

One of the implementing regulations—Government Regulation No. 44 Year 2022—provides further guidance on the amended general provisions of the VAT law, notably concerning:

  • Joint responsibility mechanism
  • VAT rate
  • VAT on the sales of foreclosed assets
  • VAT on the handover of assets as collateral for a sharia transaction scheme
  • Grouping of “non-VAT-able” goods/services
  • Output-input VAT credit mechanism

KPMG observation

Government Regulation No. 44 generally provides more thorough and comprehensive guidance. Like other tax regulations, some provisions cannot be read using only the literal meaning of the text. These provisions need to be interpreted by considering the background surrounding the regulation of the specific issue, as well as common industrial practice.

Read a February 2023 report [PDF 242 KB] prepared by the KPMG member firm in Indonesia

 

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