Land and building tax (Pajak Bumi dan Bangunan/PBB) is a tax on property chargeable on all land and/or buildings, unless exempted. The negative list setting out land and buildings not subject to PBB includes those: • Used by central and regional Government for governance purposes; • Used for public interest in the areas of religious… Read More

Foreign loan-funded and foreign grant-funded government projectsGovernment projects funded with foreign loans or foreign grants may be eligible for special tax treatment for the income derived from that funding. The projects that typically qualify are set out in the state Project Table of Contents (Daftar Isian Proyek/DIP) or other similar documents. Main contractors, consultants and… Read More

LST incentive for motor vehicles The following LST incentive is available for “green” motor vehicles with LST rates of 10%, 20%, 30%, 40%, and 125%. The LST base is reduced to certain percentage from the sales price that will effectively lower the applied LST or mean there is even no LST for certain motor vehicles.

information on the prominent tax facilities in Indonesia. The implementation of the tax facilities may apply differently under various conditions. The detailed requirements and application procedures are available in the respective regulations. Income tax concessions Tax HolidayThe MoF may provide an avenue for CIT reduction of 50% or 100% of the CIT due for 5–20… Read More

Import Duty Import duty is generally payable at rates from 0% – 150% on the customs value of imported goods. Customs value is calculated on Cost, Insurance and Freight level (CIF). As a commitment to liberalising trade, the Indonesian government is progressively lowering import duty rates on most products. Higher duty rates remain to protect… Read More

In addition to VAT, deliveries or imports of certain manufactured taxable goods may be subject to Luxury-goods Sales Tax (LST). A particular item will only attract LST once, i.e., tax will be charged either on importation of the good or on delivery by the (resident) manufacturer to another party. LST must be accounted for every… Read More

Certain means of transport and related taxable services To strengthen the national transportation industry, VAT is not-collected on the imports and/or deliveries of the following taxable goods or taxable services: a.transportation vehicles and spare parts thereof, used by the armed forces and the state police; b.ships and spare parts thereof, as well as navigational or… Read More

Strategic goods The deliveries and/or import of taxable goods designated as strategic goods are exempt from VAT. The designation of strategic goods is made through a government regulation. Currently, the following goods are included: a.capital goods in the form of machinery and plant and equipment required for the manufacturing of taxable goods (please refer to… Read More

Refund applications can be made at the end of a book year. The DGT is required to make a decision on a VAT refund application, on the basis of a VAT audit, within 12 monthsof the receipt of a complete application. If no decision has been made within 12 months, the application is considered to… Read More

VAT must be accounted for to the DGT every month. Input tax for a particular tax period (month), in principle, must be claimed as a tax credit against the output VAT for the same tax period. However, the claim can still be made within three months of the end of the particular tax period if… Read More