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Tax Glossary

Low-Risk PKP (PKP Berisiko Rendah)

A Low-Risk PKP (Pengusaha Kena Pajak Berisiko Rendah) is a Taxable Enterprise designated by Indonesia's Directorate General of Taxes as a low-risk profile and therefore entitled to advance refunds of excess VAT payments. The legal basis is Article 9(4c) of the VAT Law, implemented by PMK 28 of 2026, effective 1 May 2026. Eligible categories include public companies listed on the Indonesia Stock Exchange, state-owned and regional-owned enterprises, majority-owned BUMN subsidiaries, main customs partners (MITA), Authorized Economic Operators (AEO), registered manufacturers, large pharmaceutical wholesalers, certain medical device distributors, and consistent exporters of goods or services. The status is valid for 2 tax years and must be applied for through the Coretax system. The main benefit: VAT refunds are processed through document research instead of a full audit, with disbursement within one month of a complete application.

Tax Glossary

PKP Registration

PKP Registration (Pengukuhan PKP) is the formal process by which the KPP registers an entrepreneur as a VAT-registered taxpayer, either upon application or ex officio. Governed by Article 2 paragraph (2) of the VAT Law and PER-02/PJ/2018. Entrepreneurs whose turnover exceeds Rp 4.8 billion in a fiscal year must apply for PKP status by the end of the following month. Upon registration, the entrepreneur receives a PKP Certificate and must issue e-Faktur from the following month. Late registration may result in sanctions.

Tax Guides

Low-Risk PKP Guide: Criteria, Coretax Application, and the Accelerated VAT Refund

Low-Risk PKP status (Pasal 9 ayat (4c) UU PPN) lets a taxpayer claim VAT refunds through document research instead of a full audit. This guide covers eligibility, the legal basis, the Coretax application flow, a worked example, and a practical FAQ under PMK 28/2026.

Tax Updates

DJP Confirms: PKP May Use Aggregated Tax Invoice for End Consumers

Indonesia's DJP clarifies that VAT-registered entrepreneurs (PKP) may issue aggregated (digunggung) tax invoices when buyers meet end-consumer criteria under Article 51 paragraph (2) PER-11/PJ/2025.

Tax Glossary

PKP (VAT-Registered Entrepreneur)

A PKP is a VAT-registered entrepreneur required to collect, remit, and report VAT. Governed by Article 1 paragraph 15 of the VAT Law. Registration is mandatory when annual turnover exceeds Rp 4.8 billion (PMK No. 197/PMK.03/2013); voluntary registration is available below this threshold. Once registered, a PKP must issue a Tax Invoice for every BKP/JKP supply, remit VAT by end of the following month, and file the monthly VAT return by the same deadline.

Tax Glossary

Aggregated Tax Invoice (Faktur Pajak Digunggung)

An aggregated tax invoice (faktur pajak digunggung) is a tax invoice issued by a Retail PKP (Pengusaha Kena Pajak Pedagang Eceran or PKP PE) for the delivery of taxable goods (BKP) or services (JKP) to end consumers, without including buyer identity, name, or signature. The mechanism is governed by Article 14 paragraph (1) of the Law on General Provisions and Procedures of Taxation (UU KUP) and Articles 51 through 55 of Director General of Taxes Regulation Number PER-11/PJ/2025. The term digunggung reflects the practice of reporting the total transaction value on a single line in the periodic VAT return, without per-invoice detail. Retail PKP serving end consumers directly, such as mini-markets, clinics, restaurants, or retail shops, may use this mechanism. If a buyer does not meet end-consumer criteria, the PKP must issue a full per-transaction tax invoice.

Tax Guides

Indonesian VAT 12% Guide 2026: Scope, Rate, and Tax Invoices

A complete explanation of the 12% Indonesian VAT in force in 2026: taxable scope, input-output crediting mechanism, and e-Faktur obligations for taxable enterprises (PKP).

Tax Guides

Indonesia Crypto Miner Tax Guide 2026: General PPh Rates, 2.2% VAT, and How to File

A practical guide for crypto asset miners in Indonesia for tax year 2026. Covers the legal basis under MoF Reg 50/2025, general PPh rates, 2.2% specific-rate VAT, PKP threshold, filing steps, worked examples, and FAQs.

Tax Guides

Indonesia VAT Tax Base (DPP) Guide: Types, Calculation, and Examples

The tax base (DPP) sits at the heart of Indonesia's VAT calculation. This guide walks through DPP types under the VAT Law and HPP Law, when "other value" DPP applies, the specific-amount mechanism, and worked examples for VAT-registered businesses (PKP).

Tax Guides

Advance Tax Refund Guide under PMK 28/2026: Eligibility, Mechanism, and How to File via Coretax

PMK 28/2026 restructures advance refund procedures into three tracks: Qualified Taxpayer (KUP Law Art. 17C), Specific Requirements Taxpayer (KUP Law Art. 17D), and Low Risk PKP (VAT Law Art. 9(4c)). All applications go through Coretax and are processed via a review mechanism.

Tax Glossary

Tax Invoice (Faktur Pajak)

A Tax Invoice (Faktur Pajak) is proof of VAT collection issued by a PKP when supplying taxable goods (BKP) or services (JKP). Governed by Article 13 of the VAT Law and PER-03/PJ/2022. The invoice must be issued at the point of supply, or by the end of the delivery month if payment is received before supply. A late or non-compliant invoice is invalid and cannot be credited as Input Tax. Since 2014, Tax Invoices must be issued electronically via the DJP's e-Faktur application.

Tax Updates

Indonesia Reopens Status for Qualified Taxpayers and Low-Risk PKPs: 1-10 June 2026

PMK 28/2026 voids every Qualified Taxpayer and Low-Risk PKP designation issued under PMK 39/2018. Eligible taxpayers must reapply through Coretax between 1 and 10 June 2026 to keep the accelerated refund facility.

Tax Glossary

Input Tax (Pajak Masukan)

Input Tax (Pajak Masukan) is the VAT that should have been paid by a PKP on purchases of taxable goods (BKP) and/or services (JKP), utilization of offshore JKP, or importation of BKP. Governed by Article 1 paragraph 24 of the VAT Law. Input Tax is credited against Output Tax in the same tax period. If Input Tax exceeds Output Tax, the excess can be carried forward or refunded. Non-creditable Input Tax includes: defective Tax Invoices and BKP/JKP purchases unrelated to the business.

Tax Glossary

Monthly VAT Return (SPT Masa PPN)

The Monthly VAT Return (SPT Masa PPN) is the monthly report that every PKP must submit to DJP, summarizing Output Tax, creditable Input Tax, and the net VAT payable or overpaid. Governed by Article 15A of the VAT Law and PER-29/PJ/2015. The filing deadline is the end of the following month after the tax period. Since April 2022, filing is done through the e-Faktur application, which auto-generates return data from uploaded invoices.

Tax Guides

Tax Guide for Architects in Indonesia

Architects in Indonesia are taxed as employees when working for a firm, or as independent professionals earning from design fees and project commissions. Licensed architects operating their own studio are subject to PPh 25/29 and may need to register as PKP.

Tax Glossary

Gross Income

Gross Income (Penghasilan Bruto) is the total income received or earned by a taxpayer in a tax year before any deductions for expenses, PTKP, or other allowances. Governed by Article 4 of the Income Tax Law (UU No. 36/2008). For individuals, gross income includes salaries, allowances, bonuses, honoraria, interest, dividends, royalties, capital gains, and other income. Gross income is the starting point for computing Taxable Income (PKP) after subtracting allowable deductions and PTKP.

Tax Glossary

VAT (Value Added Tax / PPN)

VAT (Pajak Pertambahan Nilai / PPN) is a tax levied on every supply of taxable goods (BKP) and/or taxable services (JKP) within Indonesia's customs area. Governed by Law No. 8/1983 on VAT, last amended by Law No. 7/2021 (UU HPP). The standard VAT rate is 11% since 1 April 2022, rising to 12% from 1 January 2025. PPN is an indirect tax: the economic burden falls on the final consumer, while the registered taxpayer (PKP) acts as a collector, remitting the difference between Output Tax (PK) and Input Tax (PM) to the state.

Tax Glossary

Output Tax (Pajak Keluaran)

Output Tax (Pajak Keluaran) is the VAT that a PKP must collect when supplying taxable goods (BKP), taxable services (JKP), or exporting. Governed by Article 1 paragraph 25 of the VAT Law. Output Tax = DPP x applicable VAT rate. Collection must be evidenced by a Tax Invoice. The difference between Output Tax and Input Tax is either the amount to remit (if PK > PM) or the overpayment to claim back (if PM > PK).

Tax Glossary

Kanwil DJP (Regional Tax Office)

Kanwil DJP, the Regional Tax Office (Kantor Wilayah Direktorat Jenderal Pajak), is a vertical institution under Indonesia's Directorate General of Taxes (DJP) that supervises a group of local Tax Service Offices (KPP) within its working area. Under Minister of Finance Regulation (PMK) No. 18 of 2026, Kanwil DJP is responsible for coordination, technical guidance, evaluation, oversight, and analysis and follow-up of taxpayer compliance in its region. Since PMK 18/2026 took effect on 1 April 2026, DJP functional and implementing officer positions sit only at Kanwil DJP and no longer at KPP. Kanwil DJP is grouped into the Large Taxpayer Office (LTO), Kanwil DJP Jakarta Special, and the other regional offices organised by province or grouped provinces. Kanwil DJP outside LTO and Jakarta Special now also has authority over VAT centralisation requests (pemusatan tempat PPN terutang) for multi-branch VAT-registered businesses (PKP).

Tax Glossary

Tax Collection Letter (STP)

An STP (Tax Collection Letter) is used to collect tax and/or administrative penalties in the form of interest and/or fines. Governed by Article 14 of UU KUP. DJP issues an STP when: current-year income tax is unpaid or underpaid; a return has arithmetic or writing errors leading to underpayment; a taxpayer is subject to penalty interest or fines; a PKP fails to issue or issues a late Tax Invoice. STP has the same legal force as an SKP. Payment is due within 1 month of the STP issuance date.

Tax Glossary

Tax Refund (Restitusi)

A Tax Refund (Restitusi) is the return of overpaid tax to a taxpayer who has paid, or had withheld/collected, more than the actual tax due. Governed by Articles 17 and 17B of UU KUP and Article 9 paragraph (4) of the VAT Law. The process: apply in the return, DJP audits, and issues an SKPLB if the overpayment is confirmed. Processing times: 12 months for corporate PPh; 12 months for general VAT; 8 months for low-risk PKP (accelerated refund). DJP pays 2% monthly interest on late refunds.

Tax Guides

Indonesia Tax Refund Guide: Eligibility, Procedure, and How to File

A complete guide to Indonesian tax refunds: legal basis (UU KUP, UU PPN, PMK 28/2026), advance vs regular refund mechanisms, eligibility for each taxpayer category, how to file via Coretax, plus worked examples and FAQ.

Tax Guides

Tax Guide for SME Owners and Entrepreneurs in Indonesia

Small and medium enterprises (UMKM) with gross turnover up to IDR 4.8 billion per year may use the final PPh rate of 0.5% of monthly gross revenue under PP 55/2022. Larger businesses switch to the normal progressive or corporate rate.

Tax Guides

Tax Guide for Notaries and PPAT in Indonesia

Notaries (Notaris) and land deed officials (PPAT) in Indonesia earn fees (honorarium) subject to PPh 21 as expert professionals. PPAT also collect and remit BPHTB and PPh Pasal 25/29 on property transaction taxes on behalf of parties.

Tax Guides

Tax Guide for Photographers and Videographers in Indonesia

Photographers and videographers in Indonesia are taxed based on how they earn: as employees at a studio, as freelancers billing clients directly, or as business owners. Fees from Indonesian companies trigger PPh 21 expert withholding.

Tax Guides

Tax Guide for Influencers and Social Media Creators in Indonesia

Indonesian influencers and content creators earning from brand endorsements, sponsored posts, and platform monetisation are taxed as independent professionals. Brand deals paid by Indonesian companies attract PPh 21 withholding; foreign platform income must be self-reported.

Tax Updates

Indonesia's PMK 111/2025 Reshapes Taxpayer Compliance Supervision Effective 1 January 2026

Indonesia's Finance Minister Purbaya Yudhi Sadewa signed PMK 111/2025, splitting taxpayer compliance supervision into three layers: registered taxpayers, unregistered taxpayers, and territorial supervision. The rule also formalizes a seven-day extension right for SP2DK responses.

Tax Updates

PMK 28/2026 Overhauls Accelerated Tax Refund Rules, Effective 1 May 2026

Indonesia's MoF issued PMK 28/2026, revoking PMK 39/2018 through PMK 119/2024. New rules on advance refund of tax overpayment took effect on 1 May 2026.

Tax Guides

Indonesia VAT PMSE Guide: How Foreign Digital Product Tax Works

Tax Guides

PPh 21 Guide 2026: Calculation, TER Rates, and Worked Examples

A practical guide to calculating Indonesian income tax (PPh Article 21) for permanent employees in 2026 using the Average Effective Rate (TER) under PP 58/2023.