Indonesia VAT on digital services

Indonesia’s Directorate General introduced Value Added Tax on non-resident providers of digital services from 1 August 2020. See Avalara’s global VAT on digital services tracker for other countries.

This includes two criteria for VAT registration threshold, as follows:

1. Annual sales of IDR 600million per annum; and / or
2. More than 12,000 Indonesian consumers per annum

Initially, the Directorate General has been publicly identifying for registration large international providers of streaming and download media, as well as other online services. 

Upon registration, the Directorate General of Taxation provides a unique ID and access to the filing portal. Invoices must be produced and retained for all sales in the case of future audit. Payments of any VAT collected must be remitted monthly. The settlement may be in US dollars. Filings of summary returns are due each quarter. In addition, annual transactional-level data are due.

Where the VAT collectors have imposed the VAT and the customers have also paid VAT on a self-assessment basis, the self-assessed VAT can be converted to other tax payments, refunded to customers, regarded as input tax credit or claimed as a deductible expense in the income tax calculation of the customers.

As well as goods, VAT will be due on a range of electronic services. This will include: app’s; download and streaming media; e-books; cloud software; online journal subscriptions; membership fees to online associations; and gambling.

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