Indonesia VAT Registrations Explained

Updated 2 months ago

Indonesia has two main VAT registration schemes. The correct one for your business depends on whether you are a resident or non-resident company.

Scheme 1: PKP (Pengusaha Kena Pajak) — Standard Domestic Registration

Field	Details
Full name	Pengusaha Kena Pajak (PKP) — Taxable Entrepreneur
Type	Standard domestic VAT registration
Who is eligible	Resident businesses and foreign companies with a permanent establishment (PE) in Indonesia
Scope	All transaction types: B2B and B2C, goods and services, domestic and imports
Threshold	IDR 4.8 billion annual gross turnover
Input VAT recovery	Yes — full input tax credit is available on purchases used for taxable activities
Filing currency	IDR (Indonesian Rupiah) only
Can coexist with PMSE scheme?	No — PKP-registered entities file under the standard domestic return only

Scheme 2: PMSE VAT Collector — Non-Resident Digital VAT Registration

Field	Details
Full name	PMSE VAT Collector (Perdagangan Melalui Sistem Elektronik)
Type	Non-resident simplified scheme (equivalent to an OVR/non-resident digital VAT program)
Who is eligible	Non-resident foreign merchants, service providers, and digital platform operators selling to Indonesian customers
Scope	B2B and B2C digital services and intangible goods supplied from outside Indonesia
Threshold	IDR 600 million annually OR 12,000 users/transactions annually
Input VAT recovery	No — PMSE VAT Collectors cannot claim input tax credits under this scheme
Filing currency	IDR or USD — foreign PMSE operators may remit in USD
Can coexist with PKP scheme?	Only if the non-resident also has a PE in Indonesia (the PE registers as PKP for local activities)

Which Scheme Is Right for Your Business?

For most non-resident SaaS companies selling cross-border to Indonesian customers, Scheme 2 (PMSE VAT Collector) is the recommended path. It is simpler to set up, does not require a local entity or representative, allows remittance in USD, and covers both B2B and B2C transactions.

If your business establishes a permanent establishment or local subsidiary in Indonesia, you would need to transition to the PKP scheme for your local activities.

Reverse Charge Mechanism

Indonesia's VAT system does not apply a domestic reverse charge between registered businesses. However, a cross-border reverse charge applies in specific situations:

If a non-resident seller is not an appointed PMSE VAT Collector and they are selling to an Indonesian registered business (B2B), the Indonesian buyer is responsible for self-assessing VAT via reverse charge.
For B2C transactions, there is no reverse charge mechanism. If the seller is not an appointed PMSE VAT Collector, VAT may go uncollected in practice.

Once a non-resident seller exceeds the PMSE thresholds, the DGT will appoint them as a VAT collector regardless of any reverse charge arrangements in place.

Filing Requirements After Registration

Once registered as a PMSE VAT Collector:

Field	Details
Filing frequency	Monthly
Filing deadline	End of the month following the tax period
Payment deadline	End of the month following the tax period (same as filing)
First filing period	Covers from the effective date of PMSE appointment through the end of that month
Period alignment	Calendar months
Local bank account required?	No — international bank transfers are accepted
Login credentials	Email, ID, and PIN (issued upon PMSE appointment)

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