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.
This article is for education, not tax advice.
Example
In March, PKP A has Output Tax of Rp 50 million and Input Tax of Rp 30 million. VAT remitted to DJP = Rp 50 million - Rp 30 million = Rp 20 million.
Source: Article 1 paragraph 24 UU PPN
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