How vat / sales tax works in Indonesia
Indonesian VAT (PPN) runs at 11% on domestic supplies of goods and services, with luxury sales tax stacking on defined goods and exports zero-rated.
Businesses past IDR 4.8 billion of annual turnover register as PKP, charge output tax, credit input tax on compliant faktur pajak, and file monthly SPT Masa PPN.
Coretax centralises registration, invoicing, and filing, while foreign digital sellers collect through the PMSE regime and crypto delivery itself left PPN under 2025 rules.
Tax rates at a glance
- Standard VAT
- 11%
- Luxury stacking
- PPnBM
- Exports
- 0%
- Registration line
- IDR 4.8bn
- Foreign digital PMSE
- 11%
- Crypto delivery
- No PPN
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
E-commerce sellersSaaS foundersManufacturersExpatsCross-border traders
Watch out for
- The January 2025 rate plan was narrowed to luxury goods already under PPnBM, so general supplies stay at 11% and luxury quotations need PPnBM-inclusive math.
- Faktur pajak validity conditions deny credits on formal defects, which makes e-invoice discipline part of every sale rather than back-office cleanup.
- PMSE collection pulls foreign digital sellers into monthly PPN duties from the first qualifying sale with local registration.
- Prepaid and staged supplies split tax points across periods, so contract milestones need VAT timing clauses.
Frequently asked questions
What is the VAT rate in Indonesia?
Indonesia applies 11% standard VAT in 2026 on goods and services, with luxury PPnBM stacking on defined goods and zero-rating for exports.
When must an Indonesian business register for VAT?
Past IDR 4.8 billion of annual turnover as a PKP, with monthly SPT Masa PPN filing through Coretax. Voluntary registration suits input-heavy starters.
Do foreign digital sellers collect Indonesian VAT?
Yes through the PMSE regime at 11% on qualifying B2C digital supplies, with local appointment and monthly remittance mechanics.