Reporting Value Added Tax

Companies and individuals designated as taxable enterprises (Pengusaha Kena Pajak/PKP) are required to report their business activities and settle the VAT liabilities on these every month. VAT is usually to be accounted for on a decentralization basis. As a result, a company carrying out business activities through a number of business units (branches) in the working areas of different district tax service offices (Kantor Pelayanan Pajak/KPP) must register each unit with the relevant KPP. It is in this context that internal deliveries of taxable goods within a company are subject to VAT.

However, a company may centralize its VAT reporting and so may exclude internal deliveries of taxable goods from the scope of VAT by submitting a written notification to the DGT.

Companies registered with the following KPP are required to centralize their VAT reporting:

  1. KPP for large taxpayers/LTO;
  2. KPP for foreign investment companies (Penanaman Modal Asing/PMA);
  3. KPP for certain foreign companies and foreigners (Badan dan Orang Asing/Badora);
  4. KPP for listed companies (Perusahaan Masuk Bursa/PMB); and
  5. KPP for medium-sized taxpayers/MTO.

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