Navigating VAT Requirements for Foreign Companies in Indonesia: Rules, Rates, and Registration Process

• Value Added Tax (VAT) is a consumption tax applied to goods and services at every stage of the supply chain
• End consumers bear the VAT, collected and remitted by businesses
• VAT requirements are crucial for foreign companies in Indonesia to maintain compliance
• VAT applies to individuals, organizations, or businesses engaging in taxable sales or services in Indonesia
• Indonesia has a standard VAT rate of 11%, with certain goods and services subject to reduced rates or exemptions
• Foreign companies may need to register for VAT in Indonesia, especially if providing digital products or services
• Registration threshold is IDR 4.8 billion annually, and companies must collect, report, and remit VAT on sales to Indonesian customers
• Foreign companies without a physical presence in Indonesia must appoint a local tax representative for VAT registration and compliance.

Source: berdikariconsulting.co.id

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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