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.
This article is for education, not tax advice.
Example
A consumer buys a laptop for Rp 10 million (VAT-inclusive). The VAT component is Rp 990,909. The store (PKP) collects this from the consumer and remits it to the DJP after deducting Input Tax.
Source: UU No. 8/1983 jo. UU No. 7/2021 (UU HPP)