Overview of Indonesia VAT (PPN) Supported in Kintsugi

Indonesia imposes a Value Added Tax (VAT), locally referred to as PPN (Pajak Pertambahan Nilai), on the sale of taxable goods and services, including digital products and SaaS. Kintsugi supports VAT compliance for businesses operating in Indonesia, including nexus monitoring, registration, tax calculation, and filings.

What Is Indonesia VAT?

PPN is a federal-level consumption tax administered by Indonesia's Directorate General of Taxes (DGT), also known as Direktorat Jenderal Pajak (DJP). There is no regional or provincial VAT in Indonesia. A single national rate applies across the country.

Who Needs to Comply?

There are two primary business profiles for VAT compliance in Indonesia.

Resident businesses (with physical presence in Indonesia)

Companies incorporated or physically established in Indonesia must register as a Pengusaha Kena Pajak (PKP), or "Taxable Entrepreneur," once their annual gross turnover exceeds IDR 4.8 billion. Standard domestic VAT rules apply under the PKP scheme.

Non-resident foreign companies (selling digital goods/services to Indonesian customers)

Foreign businesses without a physical presence in Indonesia that sell digital services, SaaS, or electronic products to Indonesian customers must comply under the PMSE VAT Collector scheme (Perdagangan Melalui Sistem Elektronik). This is Indonesia's equivalent of a non-resident digital VAT registration framework, similar to an Overseas Vendor Registration (OVR) program.

How Does Kintsugi Help?

Kintsugi supports the full VAT compliance lifecycle for Indonesia, including:

• Nexus monitoring for both physical and economic nexus triggers

• Registration under the PMSE VAT Collector scheme for non-resident sellers

• Tax engine support to calculate and apply the correct VAT rate on B2B and B2C SaaS transactions

• Filings submitted to the DGT on the required schedule

Note: As of January 2025, Indonesia's DGT replaced its prior online portal (DJP Online) with a new system called Coretax DJP. All filings and registrations are now managed through the Coretax platform.

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