- Indonesia uses a reverse-charge VAT mechanism for overseas taxable services and intangible goods used in Indonesia, so local customers must calculate and pay VAT even if the foreign supplier has no local presence.
- The standard VAT rate is 12%, but for these cross-border supplies the tax base is 11/12 of the amount charged, making the effective VAT rate 11%.
- VAT becomes due at the earliest of use, booking as payable, supplier invoicing, customer payment, or contract date if unspecified; payment is due by the 15th of the following month and must be reported in the relevant tax period.
- If the foreign supplier is appointed as a PMSE e-commerce VAT collector and charges Indonesian VAT, the local customer does not also pay reverse-charge VAT on that transaction.
Source: aseanbriefing.com
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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