Consumption/VAT/Sales Tax in Indonesia
- Nature of the Tax
- Value Added Tax, Pajak pertambahan nilai (PPN).
- Standard Rate
- Reduced Tax Rate
- sellers of second-hand cars, travel agents, postal services (1%)
- manufacturers of cigarettes (8.4%)
- machining services (0.5%), some small and medium retailers (2%), DIY construction (4%)
- Exclusion From Taxation
- The rate is zero for some essentials, medical and social services, mining products extracted at source, food and drink served in restaurants, currency, gold ingots, bills, insurance and financial contracts, the hotel industry, public transport by land and sea, education. Export is zero-rated.
- Method of Calculation, Declaration and Settlement
The method of calculation for VAT is specified in the Law n°18 of 2000 on VAT applied to goods and services, and the form is available on the website (n English) of the General Tax Office.
- Other Consumption Taxes
- There is a tax on luxury goods which ranges from 10% to 75%. Luxury goods are non-vital goods such as air conditioning, television (10-20%), goods whose consumption is exclusive to more well-off people like jewelry and precious metals (30-50%), goods consumed more for their status than their usefulness, such as luxury cars (75%), harmful products such as alcoholic drinks (30-50%) and some luxurious properties.
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