VAT centralization rules updated

Under Indonesia’s general rule, a VAT-able entrepreneur (PKP) carrying out business activities in Indonesia through business units located in multiple jurisdictions under different tax offices has to register each business unit with its respective tax office. However, the PKP may choose to centralize the VAT administration under one location by submitting a notification to the tax office. The tax office will then issue an approval or rejection letter. To ease the administrative burden and provide more legal certainty, as well as a more effective supervision of the rights and obligations of PKPs, Indonesia’s Directorate General of Taxation (DGT) issued Regulation Number 11/PJ/2020 (PER-11) on 25 June 2020 to serve as the new regulation on VAT centralization

Source: Deloitte

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