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Tax Glossary
Taxable Services (JKP)
Taxable Services (JKP) are services subject to VAT under the PPN Law. Governed by Article 1 paragraph 6 and Article 4A of the VAT Law. Like BKP, all services are JKP by default unless explicitly exempt. Exempt services include: medical healthcare, social services, postage stamp mail delivery by PT Pos Indonesia, financial services, insurance, religious services, education, and public transportation. PKPs supplying JKP must issue a Tax Invoice; VAT is due at the point of service delivery.
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
Crypto Asset Miner
A crypto asset miner is a party that renders verification services for transactions on a blockchain network and receives compensation in the form of block rewards (newly minted crypto assets) or transaction fees. Under MoF Regulation No. 50 of 2025, verification services rendered by miners are classified as Taxable Services (JKP) and are subject to a specific-rate VAT of 2.2% of the converted value of crypto assets received. From tax year 2026, mining income is no longer collected via the 0.1% final PPh Article 22 mechanism; it is taxed under general PPh rates per Article 17 of the Income Tax Law: progressive 5 to 35 percent for individuals and a flat 22 percent for entities. The miner scope covers proof-of-work miners (Bitcoin), active proof-of-stake validators, and mining pool operators.
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 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 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
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.