Search
Search
Search across guides, tax updates, and glossary.
Results for · 5 · Tax Glossary
Tax Glossary
BMAD (Anti-Dumping Import Duty)
Anti-Dumping Import Duty (BMAD) is an additional levy on imported goods whose export price is below the normal value in their country of origin and that cause material injury to a like domestic industry. Its legal basis is Article 23B of Law 17/2006 amending Law 10/1995 on Customs, with implementing rules in Government Regulation 34/2011. The Indonesian Anti-Dumping Committee (KADI) conducts investigations to confirm a dumping margin, injury, and causal link before the Minister of Finance fixes a rate by ministerial regulation (PMK). BMAD is calculated as a percentage of customs value (CIF) on top of the MFN duty. Rates are producer-specific and apply for a maximum of five years, subject to sunset review.
Tax Glossary
Cigarette Tax (Pajak Rokok)
Cigarette Tax (Pajak Rokok) is a regional levy in Indonesia imposed on cigarette excise at a single rate of 10 percent of the excise amount. Receipts belong to provincial governments and are further shared with districts and cities at a 70:30 ratio (districts/cities : province). The Directorate General of Customs and Excise collects it alongside cigarette excise from manufacturers and importers, then channels it to provincial regional general treasury accounts proportionally by population. The primary legal basis is Article 36 of Law Number 1 of 2022 on Financial Relations between the Central and Regional Governments (UU HKPD), with technical procedures in PMK Number 26 of 2026, effective 12 May 2026. PMK 26/2026 requires regional governments to earmark at least 50 percent of receipts, with 37.5 percent of the total mandated as contribution to the National Health Insurance Program (JKN).
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
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
Article 22 Income Tax (PPh 22)
PPh 22 (Article 22) is a tax collection on payments for goods supply and import activities, levied by government treasurers, certain business entities, and importers. Governed by Article 22 of the Income Tax Law and PMK No. 92/PMK.03/2019. Rates vary: 2.5% on general imports with an Importer Identification Number (API); 7.5% without API; 0.25% on certain industry raw material purchases; 0.45-1.5% on fuel station purchases, agricultural products, and others. PPh 22 is generally non-final and creditable.