What's new with Indonesia's taxation law?

As an international retailer selling to Indonesia, there are certain thresholds and criteria to consider regarding Value Added Tax (VAT) collection.

Threshold and appointment 

Threshold for VAT collection

If you sell over 600 million rupiah (IDR) annually or if your website traffic exceeds 12,000 per year, you may be appointed by the Indonesia Director-General of Tax as a VAT collector.

Appointment process

If you're above the threshold and appointed by the Indonesian government, the Director-General of Tax will reach out and provide you with further instructions to activate your account and update your data. Once you complete this process, your appointment as a VAT collector will be effective.

VAT collection obligations 

All VAT collectors in Indonesia must collect, report, and pay 10% multiplied by the Tax Imposition Base, which is the amount paid by the buyer (excluding the VAT). The VAT applies to all intangible goods and taxable services.

Likelihood of appointment 

It is unlikely that every business will be appointed as a VAT collector. The Director-General of Tax has only appointed six companies as VAT collectors so far, including Netflix, Spotify, Amazon, and Google.

Becoming a VAT collector 

If you are appointed as a VAT collector, further instructions will be provided to you by the Indonesia Director-General of Tax.

How Zonos can help 

Zonos provides duty and tax solutions to assist with managing Indonesian tax laws and similar laws in other countries. Our services include:

• Zonos Hello, which informs Indonesian customers when they are exempt from paying duty or VAT.
• Tax collection at checkout for Indonesian customers.
• Regular updates on the latest Indonesian tax law changes and other country taxation updates.

Additional resources 

For further reading, you can check out the following resources:

• Indonesian Tax Law - Learn more in our Zonos Docs.
• Lexology: Indonesia Government regulation - Read more about the tax laws in Indonesia.

Looking for duty and tax help? 

Zonos offers tax and duty solutions for global businesses. Our Zonos Checkout provides a smarter checkout experience by calculating the total landed cost (including duty, taxes, and carrier fees) based on the de minimis. It also includes global payments, integration with your preferred shipping carrier, fraud coverage, localized checkout fields, denied party screening, and country restrictions.

Zonos Landed Cost calculates import duty and tax with carrier fees, de minimis values, and HS code support within your platform or checkout. We provide landed cost plugins for various ecommerce platforms as well as custom solutions using Zonos APIs.

You can also try our free Zonos Hello to provide de minimis information to your international shoppers while they browse your site.

Zonos Quoter allows you to get instant duty and tax quotes, making your life easier.