General

VAT is typically due on events involving the transfer of taxable goods or the provision of taxable services in the Indonesian Customs Area. The taxable events are:

1.  Deliveries of taxable goods in the Customs Area by an enterprise;
2.  Import of taxable goods;
3.  Deliveries of taxable services in the Customs Area by an enterprise;
4.  Use or consumption of taxable intangible goods originating from outside the Customs Area in the Customs Area;
5.  Use or consumption of taxable services originating from outside the Customs Area in the Customs Area;
6.  Export of taxable goods (tangible and intangible) by a taxable enterprise.
7.  Export of taxable services by a taxable enterprise.

The delivery of taxable goods is defined very broadly; it includes the following:

1. Deliveries of a title to taxable goods according to an agreement;
2. Transfers of taxable goods according to a leasing-with- option or a finance-lease agreement;
3. Deliveries of taxable goods to an intermediary trader or through an auction official;
4. Own-use and/or free gift of taxable goods;
5. Remaining taxable goods in the forms of inventories  and/or assets, which were originally not for sale, at a company’s dissolution;
6. Deliveries of taxable goods within a company (e.g., between branches, or between the head office and its branches) unless the company, subject to the DGT’s approval, centralizes its VAT reporting;
7. Deliveries of taxable goods on consignment;
8. Deliveries of taxable goods by a taxable entrepreneur in the framework of sharia-based financing, whereby the deliveries are deemed to take place directly from the taxable entrepreneur to the party in need of the taxable goods.