Undang-Undang 2009 42-English

LAW OF THE REPUBLIC OF INDONESIA
NUMBER 42 OF 2009
ON
THIRD AMENDMENT OF LAW NUMBER 8 YEAR 1983

REGARDING VALUED ADDED TAX ON GOODS AND SERVICES
AND LUXURY SALES TAX
BY THE GRACE OF ALMIGHTY GOD

THE PRESIDENT OF THE REPUBLIC OF INDONESIA,
Considering:
a. that in order to further enhance legal certainty and justice, create a simpler tax
system, and secure state revenues to ensure that national development may be
carried out independently, it is necessary to amend Law Number 8 of 1983
regarding Valued Added Tax on Goods and Services and Luxury Sales Tax as
amended several times, most recently by Law Number 18 of 2000 on Second
Amendment of Law Number 8 of 1983 regarding Valued Added Tax on
Goods and Services and Luxury Sales Tax;
b. that based on the considerations mentioned in letter a, it is necessary to

establish a Law on Third Amendment of Law Number 8 of 1983 regarding
Valued Added Tax on Goods and Services and Luxury Sales Tax;
In view of:
1. Article 5 paragraph (1), Article 20, and Article 23A of the 1945 Constitution of
the Republic of Indonesia;
2. Law Number 6 of 1983 regarding General Provisions and Procedures for

Taxation (State Gazette of the Republic of Indonesia for 1983 Number 49,
Supplement to the State Gazette Number 3262) as amended several times, most
recently by Law Number 16 of 2009 on Establishment of Government
Regulation in Lieu of Law Number 5 of 2008 on Fourth Amendment of Law
Number 6 of 1983 regarding General Provisions and Procedures for Taxation As
a Law (State Gazette of the Republic of Indonesia for 2009 Number 62,
Supplement to the State Gazette Number 4999);
3. Law Number 8 of 1983 regarding Value Added Tax on Goods and Services and
Luxury Sales Tax (State Gazette of the Republic of Indonesia of 1983 Number
51, Supplement to the State Gazette Number 3264) as amended several times,
most recently by Law Number 18 of 2000 on Second Amendment of Law
Number 8 of 1983 regarding Value Added Tax on Goods and Services and
Luxury Sales Tax (State Gazette of the Republic of Indonesia for 2000 Number
128, Supplement to the State Gazette Number 3986);
With the joint approval of

THE HOUSE OF REPRESENTATIVES OF THE REPUBLIC OF INDONESIA
and
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
HAS DECIDED:
To stipulate: LAW REGARDING THE THIRD AMENDMENT OF LAW

NUMBER 8 OF 1983 REGARDING VALUE ADDED TAX ON
GOODS AND SERVICES AND LUXURY SALES TAX.
Article I
A number of provisions in Law Number 8 of 1983 regarding Value Added Tax on

Goods and Services and Luxury Sales Tax (State Gazette of the Republic of Indonesia
of 1983 Number 51, Supplement to the State Gazette Number 3264), which has been
amended several times through Laws:
a. Number 11 of 1994 (State Gazette of the Republic of Indonesia for 1994 Number
b. Number 18 of 2000 (State Gazette of the Republic of Indonesia for 2000 Number
shall be amended as follows:
1. The provisions in Article 1 shall be amended to read as follows:
Article 1
In this Law, the following terms shall have the following definitions:
1. The Customs Zone shall be the territory of the Republic of Indonesia

covering the land, water and airspace above it, as well as certain places
within the Exclusive Economic Zone and the continental shelf where
the Laws that regulate customs matters shall apply.
2. Goods shall be tangible goods, which by nature or by law are in the

form of movable goods or immovable goods, and intangible goods.
3. Taxable Goods shall be goods that are subject to tax pursuant to this
Law.
4. A Delivery of Taxable Goods shall be any activity of delivering

Taxable Goods.
5. Services shall be any activities of services conducted pursuant to a

commitment or legal act that causes certain goods, facilities or rights to
be available for use, including services carried out in order to produce
goods based on an order or request with materials from and on the
instructions of the party making the order.
6. Taxable Services shall be services that are subject to tax pursuant to

this Law.
7. The rendering of Taxable Services shall be any activity of rendering
Taxable Services.
8. The use of Taxable Services from outside the Customs Zone shall be
any activity of using Taxable Services from outside the Customs Zone
within the Customs Zone.
9. An Import shall be any activity of bringing goods from outside

Customs Zone into the Customs Zone.
10. The use of Intangible Taxable Goods from outside the Customs Zone
shall be any activity of using Intangible Taxable Goods from outside
the Customs Zone within the Customs Zone.
11. An Export of Tangible Taxable Goods shall be any activity of

releasing Tangible Taxable Goods from within the Customs Zone to
outside the Customs Zone.
12. Trade shall be business activity of buying and selling, including the
exchange of goods, without changing the form or nature of such.
13. An Entity shall be a group of people and/or capital which forms a unit,
whether involved in business activities or not, including limited
liability companies, limited partnerships, other companies, State- and
Regionally-Owned Enterprises in any name or form, firms, commercial
associations, cooperatives, pension funds, partnerships, groups,
foundations, mass organizations, sociopolitical organizations and other
similar organizations, institutions and other forms of entities including
collective investment contracts and permanent establishments.
14. An Entrepreneur shall be an individual or entity in any form

whatsoever that in its business activities or employment produces
goods, imports goods, exports goods, trades, uses intangible goods
from outside the Customs Zone, renders services including the export
of services, or uses services from outside the Customs Zone.
15. A Taxable Entrepreneur shall be an Entrepreneur that delivers Taxable

Goods and/or renders Taxable Services that are subject to tax pursuant
to this Law.
16. Production shall be the activity of processing to change the form

and/or characteristics of certain goods from their original form to
become new goods or goods with a new use or activity to process
natural resources, including asking other individuals or entities to
undertake said activities.
17. The Tax Assessment Base shall be the amount of the Selling Price,
Service Fee, Import Value, Export Value or other value used as the
basis for calculating the tax payable.
18. The Selling Price shall be the money value of the Taxable Goods
delivered, including all costs which are charged or should be charged
by the seller but not including the Value Added Tax collected pursuant
to this Law and any discount stated on the Tax Invoice.
19. The Service Fee shall be the money value of Taxable Services
rendered, export of Taxable Services, or export of Intangible Taxable
Goods, including all costs which are charged or should be charged by
the service provider but not including the tax collected pursuant to this
Law and any discount stated on the Tax Invoice or the money value
that is paid or should be paid by the Service Recipient for the use of
Taxable Services and/or by the beneficiary of Intangible Taxable
Goods for the use of Intangible Taxable Goods from outside the
Customs Zone within the Customs Zone.
20. The Import Value shall be the money value of the imported Taxable
Goods which constitutes the base for assessing the import duty plus
other charges based on the provisions of customs and excise
legislation, but not including Value Added Tax and Sales Tax on
Luxury Goods collected according to this Law.
21. A Buyer shall be an individual or entity that receives or should receive

a delivery of Taxable Goods and that pays or should pay the price of
said Taxable Goods.
22. A Service Recipient shall be an individual or entity that receives or

should receive Taxable Services rendered and that pays or should pay a
Service Fee for said Taxable Services.
23. A Tax Invoice shall be proof of tax collection and shall be made by a
Taxable Entrepreneur delivering Taxable Goods or rendering Taxable
Services.
24. Input Tax shall be the Value Added Tax which should have been paid
by a Taxable Entrepreneur as a result of an acquisition of Taxable
Goods and/or a receipt of Taxable Services and/or the use of Intangible
Taxable Goods from outside the Customs Zone and/or the use of
Taxable Services from outside the Customs Zone and/or the import of
Taxable Goods.
25. Output Tax shall be the Valued Added Tax payable which must be
collected by a Taxable Entrepreneur delivering Taxable Goods,
rendering Taxable Services, exporting Tangible Taxable Goods,
exporting Intangible Taxable Goods, and/or exporting Taxable
Services.
26. The Export Value shall be the money value, including all costs which
are charged or should be charged by the exporter.
27. A Collector of Value Added Tax shall be a government treasurer, an
entity, or a government agency appointed by the Minister of Finance to
collect, deposit and report the tax payable by a Taxable Entrepreneur
on the delivery of Taxable Goods and/or the rendering of Taxable
Services to said government treasurer, entity or government agency.
28. Export of Intangible Taxable Goods shall be every activity of use of

Intangible Taxable Goods from within the Customs Zone outside the
Customs Zone.
29. Export of Taxable Services shall be every activity of rendering of

Taxable Services outside the Customs Zone.
2. The provisions of Article 1A shall be revised to read as follows:
Article 1A
(1) The definition of the delivery of Taxable Goods shall cover:

a. the delivery of title to Taxable Goods based on a contract;
b. the transfer of Taxable Goods based on a leasing agreement;
c. the delivery of Taxable Goods to a broker or through an
auctioneer;
d. own use and/or donation of Taxable Goods free of charge;
e. Taxable Goods in the form of inventory and/or assets that were
not originally intended for trading, which remain at the time a
company is dissolved;
f. the delivery of Taxable Goods from a head office to a branch or
vice versa and/or the delivery of Taxable Goods between
branches;
g. the delivery of Taxable Goods through consignment; and
h. the delivery of Taxable Goods by a Taxable Entrepreneur in the
context of a financing agreement conducted on the basis of
sharia principles, which delivery is considered to be directly
from the Taxable Entrepreneur to the party that needs the
Taxable Goods.
(2) The definition of a delivery of Taxable Goods shall not include:

a. the delivery of Taxable Goods to a broker as intended under the
Commercial Code;
b. the delivery of Taxable Goods as collateral for a loan;
c. the delivery of Taxable Goods as intended under paragraph (1)
letter f if a Taxable Entrepreneur performs centralization of the
location at which tax is payable;
d. the transfer of Taxable Goods in the context of a business
merger, consolidation, expansion, split, or takeover provided
that the party making the transfer and the party receiving the
transfer are Taxable Entrepreneurs; and
e. Taxable Goods in the form of assets that were not originally
intended to be traded, which remain at the time a company is
dissolved, and the Input Tax on whose acquisition was not
creditable as mentioned in Article 9 paragraph (8) letter b and
letter c.
3. The provisions in Article 3A shall be amended to read as follows:
Article 3A
(1) An Entrepreneur that makes a delivery as intended under Article 4

paragraph (1) letter a, letter c, letter f, letter g, or letter h, except for a
small-scale entrepreneur, the limitations for which shall be stipulated
by the Minister of Finance, must report its business in order to be
confirmed as a Taxable Entrepreneur and must collect, deposit and
report the Value Added Tax and Luxury Sales Tax payable.
(1a) A small-scale entrepreneur as mentioned in paragraph (1) may choose

to be confirmed as a Taxable Entrepreneur.
(2) A small-scale entrepreneur that chooses to be confirmed as a Taxable

Entrepreneur must implement the provisions as mentioned in
paragraph (1).
(3) An individual or entity using Intangible Taxable Goods from outside

the Customs Zone as intended under Article 4 paragraph (1) letter d
and/or using Taxable Services from outside the Customs Zone as
intended under Article 4 paragraph (1) letter e must collect, deposit and
report the Valued Added Tax payable, the assessment and procedure of
which shall be stipulated through a Regulation of the Minister of
Finance.
Article 4
(1) Value Added Tax shall be imposed on:

a. the delivery of Taxable Goods within the Customs Zone by an
entrepreneur;
b. the import of Taxable Goods;
c. the rendering of Taxable Services within the Customs Zone by an
entrepreneur;
d. the use within the Customs Zone of Intangible Taxable Goods
from outside the Customs Zone;
e. the use within the Customs Zone of Taxable Services from
outside the Customs Zone;
f. the export of Tangible Taxable Goods by a Taxable Entrepreneur;
g. the export of Intangible Taxable Goods by a Taxable
Entrepreneur; and
h. the export of Taxable Services by a Taxable Entrepreneur.
(2) Provisions regarding the limits of activities and types of Taxable Services
whose export is subject to Value Added Tax as mentioned in paragraph (1)
letter h shall be stipulated through a Regulation of the Minister of Finance.
Article 4A
(1) Deleted.
(2) The types of goods exempt from Value Added Tax shall be certain
goods in the following classifications of goods:
a. goods produced from mining or from drilling that are extracted
directly from the source;
b. basic commodities vital to the general public;
c. food and beverages served at hotels, restaurants, cafés, food
stalls and so forth, including food and beverages whether
consumed on the premises or not, including food and beverages
delivered by catering businesses; and
d. money, gold bars and commercial papers.
(3) The types of service exempt from Value Added Tax shall be certain
services in the following classifications of services:
a. medical health care services;
b. social services;
c. postal services using stamps;
d. financial services;
e. insurance services;
f. religious services;
g. educational services;
h. artistic and entertainment services;
i. non-commercial broadcasting services;
j. public transportation services on land and water as well as
domestic air transportation services that are an inseparable part
of foreign air transportation services;
k. employment services;
l. hotel services;
m. services provided by the government in respect of carrying out
general administration;
n. parking space provision services;
o. public telephone services using coins;
p. money transfer services using postal money orders; and
q. catering services.
Article 5
(1) In addition to the Value Added Tax imposed as mentioned in Article 4

paragraph (1), Luxury Sales Tax shall also be imposed on:
a. the delivery of Taxable Goods categorized as luxuries by the
entrepreneur producing said goods within the Customs Zone in
respect of its business or occupation; and
b. the import of Taxable Goods categorized as luxuries.
(2) Luxury Sales Tax shall be imposed only once at the time of the
delivery of the Luxury Taxable Goods by the producing entrepreneur
or at the time of import of the Luxury Taxable Goods.
Article 5A
(1) Value Added Tax or Value Added Tax and Sales Tax on Luxury Goods on
the delivery of Taxable Goods that are returned may be deducted from
the Value Added Tax or Value Added Tax and Sales Tax on Luxury
Goods owed in the Tax Period when the return of said Taxable Goods
occurs.
(2) Value Added Tax on rendering of Taxable Services that are cancelled,
either in whole or in part, may be deducted from the Value Added Tax
owed in the Tax Period when said cancellation occurs.
(3) Provisions regarding the procedure for deduction of Value Added Tax or
Value Added Tax and Sales Tax on Luxury Goods as mentioned in
paragraph (1) and deduction of Value Added Tax as mentioned in
paragraph (2) shall be stipulated through Regulation of the Minister of
Finance.
8. The provisions in Article 7 paragraph (2) and paragraph (3) shall be amended
such that Article 7 reads as follows:
Article 7
(1) The Value Added Tax Tariff shall be 10% (ten percent).
(2) A Value Added Tax Tariff of 0% (zero percent) shall be applied on:
a. export of Tangible Taxable Goods;
b. export of Intangible Taxable Goods; and
c. export of Taxable Services.
(3) The tax tariff as mentioned in paragraph (1) may be revised to a
minimum of 5% (five percent) and a maximum of 15% (fifteen
percent), which changes in rate shall be stipulated through a
Government Regulation
Article 8
(1) The Luxury Sales Tax tariff shall be set at no lower than 10% (ten
percent) and no higher than 200% (two hundred percent).
(2) Tax with a tariff of 0% (zero percent) shall be imposed on the export of
Luxury Taxable Goods.
(3) Provisions on the classifications of Taxable Goods categorized as

luxuries that are subject to Luxury Sales Tax at the tariffs as mentioned
in paragraph (1) shall be stipulated through a Government Regulation.
(4) Provisions on the types of goods subject to Sales Tax on Luxury

Goods as mentioned in paragraph (3) shall be stipulated through or on
the basis of a Regulation of the Minister of Finance.
10. Between Article 8 and Article 9 one (1) new article shall be inserted, Article
8A, which shall read as follows:
Article 8A
(1) Value Added Tax payable shall be calculated by multiplying the tariffs
as mentioned in Article 7 by the Tax Assessment Base, which includes
Selling Price, Service Fee, Import Value, Export Value or other value.
(2) Provisions regarding other value as mentioned in paragraph (1) shall be

stipulated through or on the basis of a Regulation of the Minister of
Finance.
11. The provisions in Article 9 paragraph (1) shall be deleted, paragraph (2),
paragraph (2a), paragraph (3), paragraph (4), paragraph (5), paragraph (6),
paragraph (7), paragraph (8), paragraph (13) and paragraph (14) shall be
amended, one new paragraph shall be inserted between paragraph (2a) and
paragraph (3) to become paragraph (2b), six new paragraphs shall be inserted
between paragraph (4) and paragraph (5) to become paragraph (4a) through
paragraph (4f), two new paragraphs shall be inserted between paragraph (6)
and paragraph (7) to become paragraph (6a) and paragraph (6b), and two new
paragraphs shall be inserted between paragraph (7) and paragraph (8) to
become paragraph (7a) and paragraph (7b), such that Article 9 shall read as
follows:
Article 9
(1) Deleted.
(2) The Input Tax in any one Tax Period shall be credited with the Output
Tax in the same Tax Period.
(2a) For a Taxable Entrepreneur that is not yet producing such that it has
not yet made deliveries on which tax is payable, the Input Tax on
procurement and/or import of capital goods shall be creditable.
(2b) The Input Tax that is credited must use a Tax Invoice that fulfills the
requirements as mentioned in Article 13 paragraph (5) and paragraph
(9).
(3) If the Output Tax is greater than the Input Tax during any one Tax
Period, the difference shall constitute the Value Added Tax which the
Entrepreneur must pay.
(4) If the creditable Input Tax is greater than the Output Tax in any Tax
Period, the difference shall constitute overpaid tax which may be set
off against the tax in the subsequent Tax Period.
(4a) For overpaid Input Tax as mentioned in paragraph (4), a request for
refund may be submitted at the end of the fiscal year.
(4b) Notwithstanding the provisions as mentioned in paragraph (4) and

paragraph (4a), a request for refund of overpaid Input Tax may be
submitted in each Tax Period by:
a. a Taxable Entrepreneur that makes exports of Tangible Taxable
Goods;
b. a Taxable Entrepreneur that makes deliveries of Taxable Goods
and/or renders Taxable Services to a Value Added Tax Collector;
c. a Taxable Entrepreneur that makes deliveries of Taxable Goods
and/or renders Taxable Services on which Value Added Tax is not
collected;
d. a Taxable Entrepreneur that makes exports of Intangible Taxable
Goods;
e. a Taxable Entrepreneur that makes exports of Taxable Services;
and/or
f. A Taxable Entrepreneur in the pre-production stage as mentioned
in paragraph (2a).
(4c) Refund of overpaid Input Tax to a Taxable Entrepreneur as mentioned

in paragraph (4b) letter a through letter e, which has the criteria as a
low-risk Taxable Entrepreneur, shall be done through a preliminary
refund of overpaid tax as mentioned in Article 17C paragraph (1) of
Law Number 6 of 1983 on General Provisions and Procedures for
Taxation and its amendments.
(4d) Provisions regarding low-risk Taxable Entrepreneurs who shall be

granted preliminary refund of overpaid tax as mentioned in paragraph
(4c) shall be stipulated through Regulation of the Minister of Finance.
(4e) The Director General of Taxation may conduct audits of Taxable

Entrepreneurs as mentioned in paragraph (4c) and issue tax assessment
notices after making preliminary refunds of overpaid tax.
(4f) If, based on the results of an audit as mentioned in paragraph (4e), the
Director General of Taxation issues an Underpaid Tax Assessment
Notice, the amount of tax underpayment shall be increased by
administrative penalty in the form of interest as mentioned in Article
13 paragraph (2) of Law Number 6 of 1983 on General Provisions and
Procedures for Taxation and its amendments.
(5) If, in any one Tax Period, a Taxable Entrepreneur not only makes a
delivery on which tax is payable, but also a delivery on which tax is
not payable, provided that the part of the delivery on which tax is
payable can be ascertained exactly from the accounts, the amount of
the creditable Input Tax shall be the Input Tax in connection with the
delivery on which tax is payable.
(6) If, in any one Tax Period, a Taxable Entrepreneur not only makes a
delivery on which tax is payable, but also a delivery on which tax is
not payable, while the Input Tax for the delivery on which tax is
payable cannot be ascertained exactly, the amount of the creditable
Input Tax shall be calculated using guidelines stipulated in a
Regulation of the Minister of Finance.
(6a) Input Tax that has been credited as mentioned in paragraph (2a) and
that has been refunded must be repaid by the Taxable Entrepreneur in
the case that the Taxable Entrepreneur experiences failure to produce
within a maximum of three (3) years from the start of the Tax Period
when the Input Tax was credited.
(6b) Provisions regarding determination of times, calculations, and

procedures for repayment as mentioned in paragraph (6a) shall be
stipulated through or on the basis of a Regulation of the Minister of
Finance.
(7) The amount of the Input Tax creditable by a Taxable Entrepreneur
whose turnover during one (1) year does not exceed a certain amount,
except for a Taxable Entrepreneur as mentioned in paragraph (7a), may
be calculated using guidelines for calculating the crediting of Input
Tax.
(7a) The amount of the Input Tax creditable by a Taxable Entrepreneur that
conducts certain business activities shall be calculated using guidelines
for calculating the crediting of Input Tax.
(7b) Provisions regarding turnover as mentioned in paragraph (7), certain

business activities as mentioned in paragraph (7a), and guidelines for
calculating the crediting of Input Tax as mentioned in paragraph (7)
and paragraph (7a) shall be stipulated through or on the basis of a
(8) Crediting of Input Tax as mentioned in paragraph (2) shall not apply
for expenditures for:
a. the acquisition of Taxable Goods or Taxable Services prior to
the entrepreneur being confirmed as a Taxable Entrepreneur;
b. the acquisition of Taxable Goods or Taxable Services not
directly related to business activities;
c. the acquisition and maintenance of sedans and station wagons,
unless these constitute goods for trade or rental;
d. the use of Intangible Taxable Goods or use of Taxable Services
from outside the Customs Zone prior to the entrepreneur being
confirmed as a Taxable Entrepreneur;
e. deleted;
f. the acquisition of Taxable Goods or Taxable Services whose
Tax Invoice does not fulfill the provisions as mentioned in
Article 13 paragraph (5) or paragraph (9) or does not state the
name, address, and Tax ID Number of the purchaser of the
Taxable Goods or recipient of the Taxable Services;
g. the use of Intangible Taxable Goods or the use of Taxable
Services from outside the Customs Zone whose Tax Invoice
does not fulfill the provisions as mentioned in Article 13
paragraph (6);
h. the acquisition of Taxable Goods or Taxable Services whose
Input Tax is collected through the issuance of a tax assessment;
i. the acquisition of Taxable Goods or Taxable Services whose
Input Tax is not reported in the Periodic Value Added Tax
Returns, which fact is discovered at the time of an audit; and
j. the acquisition of Taxable Goods other than capital goods or
Taxable Services before the Taxable Entrepreneur starts
production as mentioned in paragraph (2a).
(9) Input Tax which is creditable but which has not been credited with the
Output Tax in the same Tax Period may be credited in a subsequent
Tax Period no later than 3 (three) months after the end of the Tax
Period concerned, provided that it has not been charged as a cost and
no audit has been conducted.
(10) deleted.
(11) deleted.
(12) deleted.
(13) Provisions regarding the calculation and procedure for refunds of

overpaid Input Tax as mentioned in paragraph (4a), paragraph (4b),
and paragraph (4c) shall be stipulated through or on the basis of a
Regulation of the Director General of Taxation.
(14) In the event of transfer of Taxable Goods in the context of a business

merger, consolidation, expansion, breakup, or takeover, Input Tax on
the Taxable Goods that are transferred which has not been credited by
the Taxable Entrepreneur making the transfer may be credited by the
Taxable Entrepreneur receiving the transfer, provided that the Tax
Invoices are received after the transfer takes place and the Input Tax
has not been charged as a cost or capitalized.
12. The provisions in Article 11 paragraph (1) and the Elucidation of paragraph
(2) shall be amended so that Article 11 reads as follows:
Article 11
(1) Tax shall be payable at the time of:

a. a delivery of Taxable Goods;
b. an import of Taxable Goods;
c. a delivery of Taxable Services;
d. the use of Intangible Taxable Goods from outside the Customs
Zone;
e. the use of Taxable Services from outside the Customs Zone;
f. the export of Tangible Taxable Goods;
g. the export of Intangible Taxable Goods; or
h. the export of Taxable Services.
(2) If payment is received prior to the delivery of the Taxable Goods or the
delivery of Taxable Services, or if the payment is made prior to the
commencement of the use of Intangible Taxable Goods or Taxable
Services from outside the Customs Zone, the time at which tax shall be
payable shall be the time of payment.
(3) Deleted.
(4) The Director General of Taxation may stipulate another time as the
time at which tax is payable, if it is difficult to stipulate the time at
which tax is payable or if a change in the provisions might result in
injustice.
(5) Deleted.
13. The provisions in Article 12 paragraph (1), paragraph (2), and paragraph (4)
shall be amended so that Article 12 shall read as follows:
Article 12
(1) A Taxable Entrepreneur that makes a delivery as intended under

Article 4 paragraph (1) letter a, letter c, letter f, letter g, and/or letter h
shall be liable for tax in the place of residence or domicile and/or the
place where business activities are conducted or another place other
than the place of residence or domicile and/or the place where business
activities are conducted that is designated through a Regulation of the
Director General of Taxation.
(2) Based on a written notification from a Taxable Entrepreneur, the

Director General of Taxation may designate one or more places as the
location at which tax is payable.
(3) In the case of an import, the tax shall be payable at the location at
which the Taxable Goods are imported, and shall be collected through
the Directorate General of Customs and Excise.
(4) An individual or entity that uses Intangible Taxable Goods and/or

Taxable Services from outside the Customs Zone within the Customs
Zone as intended under Article 4 paragraph (1) letter d and letter e
shall be liable for tax in the place of residence or domicile and/or the
place of business activities.
14. The provisions in Article 13 shall be amended so that Article 13 reads as

follows:
Article 13
(1) A Taxable Entrepreneur must make out a Tax Invoice for each:
a. delivery of Taxable Goods as intended under Article 4 paragraph
(1) letter a or letter f and/or Article 16D;
b. delivery of Taxable Services as intended under Article 4
paragraph (1) letter c;
c. export of Intangible Taxable Goods as intended under Article 4
paragraph (1) letter g; and/or
d. export of Taxable Services as intended under Article 4 paragraph
(1) letter h.
(1a) The Tax Invoice as mentioned in paragraph (1) must be produced at:
a. the time of delivery of Taxable Goods and/or delivery of Taxable
Services;
b. the time of receipt of payment, in the case that payment is received
before the delivery of Taxable Goods and/or delivery of Taxable
Services;
c. the time of receipt of installment payment in the case of delivery of
each stage of work; or
d. other time, which shall be stipulated through or on the basis of a
(2) Notwithstanding the provisions as mentioned in paragraph (1), a

Taxable Entrepreneur may make out one Tax Invoice to cover all
deliveries made to the same buyer of Taxable Goods or recipient of
Taxable Services in one calendar month.
(2a) The Tax Invoice as mentioned in paragraph (1) must be produced no

later than the end of the month of the deliveries.
(3) Deleted.
(4) Deleted.
(5) A Tax Invoice must state information on the delivery of Taxable

Goods and/or the delivery of Taxable Services which shall include at
least the following:
a. The name, address and Registration Number of the Taxpayer
delivering the Taxable Goods or Taxable Services;
b. The name, address and Registration Number of the Taxpayer
buying the Taxable Goods or receiving the Taxable Services;
c. The types of goods or services, the Selling Price or Service Fee,
and any discount;
d. The Value Added Tax collected;
e. The Luxury Sales Tax collected;
f. The code, series number and date on which the Tax Invoice is
made;
g. The name and signature of the person authorized to sign the
Tax Invoice.
(6) The Director General of Taxation may designate certain documents as

having the same status as Tax Invoices.
(7) Deleted.
(8) Further provisions regarding the procedures for producing Tax
Invoices and the procedures for correcting or replacing Tax Invoices
shall be stipulated through or on the basis of a Regulation of the
15. Between Article 15 and Article 16 one (1) new article shall be inserted, Article
15A, which shall read as follows:
Article 15A
(1) Deposits of Value Added Tax by a Taxable Entrepreneur as mentioned

in Article 9 paragraph (3) must be made no later than the end of the
following month after the end of the Tax Period and before the
Periodic Value Added Tax Return is lodged.
(2) Periodic Value Added Tax Returns shall be lodged no later than the
end of the following month after the end of the Tax Period.
16. The provisions in Article 16B paragraph (1) shall be amended so that Article
16B shall read as follows:
Article 16B
(1) Non-collection of either part or all of the tax payable, or exemption

from tax assessment, either temporarily or permanently, for:
a. activities in certain areas or certain places within the Customs
Zone;
b. the delivery of certain Taxable Goods or the delivery of certain
Taxable Services;
c. the import of certain Taxable Goods;
d. the use of certain Intangible Taxable Goods from outside the
Customs Zone within the Customs Zone; and
e. the use of certain Taxable Services from outside the Customs
Zone within the Customs Zone,
shall be stipulated through Government Regulation.
(2) The Input Tax paid for the acquisition of Taxable Goods and/or the
acquisition of Taxable Services on the delivery of which Value Added
Tax is not collected shall be creditable.
(3) The Input Tax paid for the acquisition of Taxable Goods and/or the
acquisition of Taxable Services whose delivery is exempt from Value
Added Tax shall not be creditable.
17. The provisions in Article 16D shall be amended to read as follows:

Article 16D
Value Added Tax shall be imposed on the delivery of Taxable Goods in the
form of assets that were not originally intended to be traded by the Taxable
Entrepreneur, except for deliveries of assets whose Input Tax is not creditable
as mentioned in Article 9 paragraph (8) letter b and letter c.
18. Between Article 16D and Article 17 two (2) new articles shall be inserted,
Article 16E and Article 16F, which shall read as follows:
Article 16E
(1) Value Added Tax and Luxury Sales Tax that has been paid on the
purchase of Taxable Goods that are taken outside the Customs Zone by
an individual who holds a foreign passport may be requested to be
refunded.
(2) The Value Added Tax and Luxury Sales Tax that may be requested to be
refunded as mentioned in paragraph (1) must fulfill the following
conditions:
a. the value of the Value Added Tax shall be at least Rp 500,000
(five hundred thousand rupiah) and may be adjusted through
Government Regulation;
b. the purchase of the Taxable Goods was made within a period of
one (1) month before departure from the Customs Zone; and
c. the Tax Invoices shall fulfill the provisions as mentioned in
Article 13 paragraph (5), except that the Taxpayer Registration
Number column and buyer’s address column shall be filled in with
the passport number and the full address in the country that issued
the passport for sales to an individual foreign passport holder who
does not have a Taxpayer Registration Number.
(3) The request for refund of Value Added Tax and Luxury Sales Tax as
mentioned in paragraph (1) shall be made at the time the individual
foreign passport holder leaves Indonesia and shall be submitted to the
Director General of Taxation through the Directorate General of
Taxation Office at airports designated by the Minister of Finance.
(4) The documents that must be shown at the time of request for refund of
Value Added Tax and Luxury Sales Tax are as follows:
a. passport
b. boarding pass for the departure of the individual as mentioned
in paragraph (1) to outside the Customs Zone; and
c. Tax Invoice as mentioned in paragraph (2) letter c.
(5) Provisions regarding the procedure for submitting and settling requests for
refund of Value Added Tax and Luxury Sales Tax as mentioned in
paragraph (1) shall be stipulated through or on the basis of Regulation
of the Minister of Finance.
Article 16F
Buyers of Taxable Goods or recipients of Taxable Services are jointly and

severally responsible for payment of tax, unless they can show evidence that
the tax has been paid.
ARTICLE II
This law shall come into effect as of 1 April 2010.
For the purposes of public cognizance, this Law shall be promulgated in the State
Gazette of the Republic of Indonesia.
Stipulated in Jakarta
on 15 October 2009
PRESIDENT OF THE REPUBLIC OF INDONESIA,
signed
DR. H. SUSILO BAMBANG YUDHOYONO
Enacted in Jakarta
on 15 October 2009
MINISTER OF JUSTICE AND HUMAN RIGHTS

OF THE REPUBLIC OF INDONESIA
signed
ANDI MATTALATTA
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2009 NUMBER 1150

ELUCIDATION
OF
LAW OF THE REPUBLIC OF INDONESIA
NUMBER 42 OF 2009
REGARDING
THE THIRD AMENDMENT OF LAW NUMBER 8 OF 1983

REGARDING VALUE ADDED TAX ON GOODS AND SERVICES
AND LUXURY SALES TAX
I. GENERAL
Value Added Tax is a tax on the consumption of goods and services in the Customs
Zone that is imposed in stages in each channel of production or distribution. The
imposition of Value Added Tax is strongly influenced by developments in business
transactions and by the consumption patterns of the society that is the object of the
Value Added Tax. The highly dynamic economic changes at the national, regional,
and international levels and continually creating new types and patterns of business
transactions. For example, in the services sector, many new types of service
transactions have emerged, or modifications of previous transactions, for which the
imposition of Value Added Tax is not yet stipulated in the Law on Value Added Tax.
In order to respond to these extremely rapid changes, revisions and refinements to the
Value Added Tax Law are needed. The reform of the consumption tax system began
with the issuance of Law Number 8 of 1983 on Value Added Tax on Goods and
Services and Sales Tax on Luxury Goods. Steps for revision and refinement were
continuously and consistently undertaken with the issuance of Law Number 11 of
1994 and most recently in 2000 with the issuance of Law Number 18 of 2000.
These changes to the Value Added Tax Law have the following objectives:
1. To increase legal certainty and justice in the imposition of Value Added Tax.
Developments in business transactions, especially for services, have created new
types and patterns of transactions whose assessment needs to be further
confirmed in the Value Added Tax Law.
2. To simplify the Value Added Tax system.

Simplification of the Value Added Tax system is done by altering or refining the
provisions in the Value Added Tax Law that create difficulties for Taxpayers in
implementing their tax rights and obligations
3. To reduce compliance costs.

It is also hoped that the simplification of the Value Added Tax system will
reduce costs, both administrative costs for Taxpayers in implementing their
rights and obligations and the oversight costs expended by the Government in
supervising Taxpayer compliance.
4. To increase Taxpayer compliance.

It is hoped that the achievement of this objective will increase the level of
voluntary compliance by Taxpayers. A high level of voluntary compliance is
expected to increase tax revenues, as reflected in an increase in the tax ratio.
5. Not to disrupt Value Added Tax revenues.

In addition to the objectives above, the function of taxes as a source of state
revenues remains an important consideration.
6. To reduce distortion and increase economic activity.
II. ARTICLE BY ARTICLE
ARTICLE I
Number 1
Article 1
Self-explanatory
Number 2
Article 1A
Paragraph (1)
Letter a
The agreements as intended under this provision cover
sales agreements, exchange agreements, installment
sales agreements or any other agreement resulting in a
transfer of rights to goods.
Letter b
The delivery of Taxable Goods may also occur as a
result of a hire-purchase agreement and/or a leasing
agreement.
The meaning of “delivery of Taxable Goods resulting
from a leasing agreement” shall be a delivery of
Taxable Goods resulting from a leasing agreement with
option rights.
In the case of a delivery of Taxable Goods by a Taxable
Entrepreneur in the context of a leasing agreement with
option rights, the Taxable Goods are deemed to have
been delivered directly from the Taxable Entrepreneur
that is the supplier to the party that needs the goods
(lessee).
Letter c
The meaning of “dealer-broker” shall be an individual
or entity that, in respect of its business or occupation,
on its own behalf, enters into an agreement or makes a
commitment secured by another for a specified
remuneration or service fee, such as a commissioner.
The meaning of “auctioneer” shall be a Government
auctioneer or one appointed by the Government.
Letter d
“Own use” shall be defined as use for the entrepreneur’s
own interest or that of its management or employees, of
either self-produced goods or non-self produced goods.
“Donation free of charge” shall be defined as a donation
made without payment of either self-produced goods or
non-self-produced goods, such as providing samples of
goods for promotional purposes to clients or buyers.
Letter e
Taxable Goods in the form of inventory and/or assets
that were not originally intended for trade which remain
unused at the time of the company’s dissolution shall be
treated in the same way as own use, with the result that
they shall be considered a delivery of Taxable Goods.
Exempted from the provision of this letter e are
deliveries as mentioned in Article 1A paragraph (2)
letter 3.
Letter f
If any company has more than one location at which tax
is payable, whether this is a head office or a branch of
the company, the transfer of Taxable Goods between
these places constitutes a delivery of Taxable Goods.
The meaning of “head office” shall be the place of
residence or place of domicile.
The meaning of “branch” shall include a business
location, a representative office, a marketing unit, and
similar places of business activities.
Letter h
Example:
In a murabahah transaction, the sharia bank acts as the
provider of funds to buy a motor vehicle from Taxable
Entrepreneur A upon the order of a customer of the
sharia bank (Mr. B). Although, based on sharia
principles, the sharia bank must first buy the motor
vehicle and then sell it to Mr. B, pursuant to this Law
the delivery of the motor vehicle is considered to be
done directly by Taxable Entrepreneur A to Mr. B.
Paragraph (2)
Letter a
The meaning of “broker” shall be a broker as intended
under the Commercial Code, namely an intermediary
trader appointed by the President or by an official
authorized by the President for said purpose. They
operate by working for a specific remuneration or
commission, on the basis of a mandate and on behalf of
other people with whom they have no working
relationship.
Letter b
Self-explanatory
Letter c
If a Taxable Entrepreneur has more than one business
location, whether as the head office or branches of the
company, and said Taxable Entrepreneur has submitted
written notification to the Director General of Taxation,
the movement of Taxable Goods from one business
location activity to another business location (head
office to branch or vice versa, or between branches)
shall be considered not to be included in the definition
of a delivery of Taxable Goods, except for Taxable
Goods moved between locations at which tax is
payable.
Letter d
The meaning of “business split” shall be a business
separation as mentioned in the Law that regulates
limited companies.
Letter e
Taxable Goods in the form of assets that were not
originally intended to be traded, which remain at the
time a company is dissolved and the Input Tax on
whose acquisition was not creditable because of not
being directly related to business activities as mentioned
in Article 9 paragraph (8) letter b and and/or assets in
the form of sedans or station wagons the Input Tax on
whose acquisition was not creditable as mentioned in
Article 9 paragraph (8) letter c are not included in the
definition of delivery of Taxable Goods.
Number 3
Article 3A
Paragraph (1)
An Entrepreneur delivering Taxable Goods and/or rendering
Taxable Services within the Customs Zone and/or exporting
Tangible Taxable Goods, Taxable Services, and/or Intangible
Taxable Goods must:
a. report its business in order to be confirmed as a Taxable
Entrepreneur;
b. collect the tax payable;
c. deposit the Value Added Tax yet to be paid, if the
Output Tax is greater than the creditable Input Tax, and
deposit the Luxury Sales Tax payable; and
d. report the tax calculation.
The obligations above do not apply to small-scale

entrepreneurs, the limits for which shall be determined by the
Minister of Finance.
Paragraph (1a)
Self-explanatory.
Paragraph (2)
A small-scale entrepreneur shall be permitted to choose to be
confirmed as a Taxable Entrepreneur. If a small-scale
entrepreneur elects to become a Taxable Entrepreneur, this Law
shall be fully effective for said small-scale entrepreneur.
Paragraph (3)
The Value Added Tax payable on the use of Intangible Taxable
Goods and/or the use of Taxable Services from outside the
Customs Zone must be collected by the individual or entity
using said Intangible Taxable Goods and/or Taxable Services.
Number 4
Article 4
Paragraph (1)
Letter a
Entrepreneurs delivering Taxable Goods shall include
Entrepreneurs already confirmed as Taxable
Entrepreneurs as intended under Article 3A paragraph
(1) and Entrepreneurs that should be confirmed as
Taxable Entrepreneurs but that have not yet been
confirmed as such.
A delivery of goods which incurs tax must meet the
following requirements:
a. the tangible goods delivered constitute Taxable
Goods;
b. the intangible goods delivered constitute Intangible
Taxable Goods;
c. the delivery is made within the Customs Zone; and
d. the delivery is made in respect of its business
activities or occupation.
Letter b
Tax shall also be collected at the time of the import of
the Taxable Goods. The collection shall be made
through the Directorate General of Customs and
Excise.
Unlike a delivery of Taxable Goods as intended under
letter a, whosoever imports Taxable Goods into the
Customs Zone, irrespective of whether or not this is in
respect of its business activities or occupation, shall
remain subject to tax.
Letter c
Entrepreneurs delivering Taxable Services shall
include both entrepreneurs already confirmed as
Taxable Entrepreneurs as intended under Article 3A
paragraph (1) and entrepreneurs that should be
confirmed as Taxable Entrepreneurs but that have not
yet been confirmed as such.
A delivery of services that incurs tax must meet the
following requirements:
a. the services delivered are Taxable Services,
b. the delivery is made within the Customs Zone,
and
c. the delivery is made in respect of its business
activities or occupation.
Included in the definition of delivery of Taxable
Services are Taxable Services used for one's own
interest and/or Taxable Services given free of charge.
Letter d
In order to provide the same tax assessment treatment
as that for the import of Taxable Goods, Intangible
Taxable Goods originating from outside the Customs
Zone that are used by any party whatsoever within the
Customs Zone shall also be subject to Value Added
Tax.
Example:
Entrepreneur A, domiciled in Jakarta, obtains the right
to use a brand belonging to Entrepreneur B, domiciled
in Hong Kong. Value Added Tax shall be payable on
the use of said brand by Entrepreneur A within the
Customs Zone.
Letter e
Services originating from outside the Customs Zone
which are used by any party whatsoever within the
Customs Zone shall be subject to Value Added Tax.
For example, Taxable Entrepreneur C in Surabaya uses
Taxable Services from Entrepreneur D, domiciled in
Singapore. Value Added Tax shall be payable on the
use of said Taxable Services.
Letter f
Unlike entrepreneurs that conduct activities as
intended under letter a and/or letter c, entrepreneurs
exporting Tangible Taxable Goods shall be only
entrepreneurs already confirmed as Taxable
Entrepreneurs as intended under Article 3A paragraph
(1).
Letter g
As with the activity of exporting Tangible Taxable
Goods, entrepreneurs that export Intangible Taxable
Goods shall be only entrepreneurs already confirmed
as Taxable Entrepreneurs as intended under Article 3A
paragraph (1).
The meaning of “Intangible Taxable Goods” shall be:
1. the use of or right to use copyright in the sectors
of literature, arts or scientific works, patents,
designs or models, plans, secret formulas or
processes, trademarks, or other similar forms of
intellectual/ industrial property rights or other
similar rights;
2. the use of or right to use industrial, commercial,
or scientific equipment/ apparatus;
3. the provision of knowledge or information in the
scientific, technical, industrial, or commercial
sectors;
4. the provision of additional or complementary
assistance in connection with the use of or right to
use the rights mentioned in number 1, the use of
or right to use equipment/apparatus mentioned in
number 2, or the provision of knowledge or
information mentioned in number 3, in the form
of:
a. receipt of or the right to receive picture
recordings or sound recordings or both,
which are distributed to the public by
satellite, cable, fiber optics, or similar
technology;
b. use of or the right to use picture recordings
or sound recordings or both, for television or
radio broadcasts that are broadcast/ relayed
through satellite, cable, fiber optics, or
similar technology; and
c. the use of or right to use part or all of a
communication radio spectrum;
5. the use of or right to use motion picture films,
video films or tapes for television broadcast, or
audio tapes for radio broadcast; and
6. the release of all or part of rights associated with
the granting of intellectual/ industrial property
rights or other rights as mentioned above.
letter h
Included in the definition of export of Taxable Services
shall be the delivery of Taxable Services from within
the Customs Zone to outside the Customs Zone by a
Taxable Entrepreneur that exports Tangible Taxable
Goods on the basis or orders or requests with material
from and on the instruction of an orderer from outside
the Customs Zone.
Paragraph (2)
Self-explanatory
Number 5
Article 4A
Paragraph (1)
Self-explanatory
Paragraph (2)
Letter a
The meaning of goods from mining or drilling which
are extracted directly from the source shall include:
a. crude oil;
b. natural gas, not including natural gas such as LPG
that is ready to be immediately consumed by the
public;
c. geothermal energy;
d. asbestos, slate, semiprecious stones, limestone,
pumice, precious stones, bentonite, dolomite,
feldspar, halite, graphite, granite/andesite, gypsum,
calcite, kaolin, leucite, magnesite, mica, marble,
nitrate, obsidian, ochre, sand and gravel, quartz
sand, perlite, phosphate, talc, fuller’s earth,
diatomaceous earth, clay, alum, trass, jarosite,
zeolite, basalt, and trachyte;
e. coal not yet processed into coal briquettes;
f. iron ore, tin ore, gold ore, copper ore, nickel ore,
silver ore, and bauxite ore.
Letter b
The meaning of basic commodities vital to the general
public shall include:
a. polished rice;
b. unhusked rice;
c. corn;
d. sago;
e. soybeans;
f. salt, whether iodized or non-iodized salt;
g. meat, that is, fresh meat that has not been processed
into a processed product but including meat that has
been slaughtered, skinned, cut, cooled, frozen,
packaged or not, salted, treated with lime,
marinated, preserved in other ways, and/or boiled;
h. eggs, that is, eggs that have not been processed,
including eggs that have been cleaned, salted, or
packaged;
i. milk, that is, expressed milk, including milk that has
undergone a process of cooling or heating, does not
include the addition sugar or other materials, and/or
packaged or not packaged;
j. fruit, that is, fresh fruits that have been picked,
which may have been washed, sorted, peeled, cut,
sliced, graded, and/or packaged or not packaged;
and
k. vegetables, that is, fresh vegetables that have been
picked, washed, rinsed, and/or stored at low
temperature, including minced fresh vegetables.
Letter c
The intention of this provision is to avoid double
taxation because they are already objects of Local Tax.
Letter d
Self-explanatory
Paragraph (3)
Letter a
Medical health care services shall include:
1. services of general practitioner
doctors, specialist doctors, and dentists;
2. services of veterinarians;
3. services of other expert health
practitioners such as acupuncturists, dental
technicians, nutritionists, and physiotherapists;
4. obstetric or midwife services;
5. paramedical and nursing services;
6. services of hospitals, maternity
hospitals, medical clinics, medical laboratories, and
sanatoria;
7. services of psychologists and
psychiatrists; and
8. alternative medical treatment
services, including those performed by paranormals.
Letter b
Social welfare services shall include:
1. services of orphanages and old age homes;
2. fire-fighting services;
3. accident assistance services;
4. services of rehabilitation institutions;
5. services of providing houses of mourning or burial
services, including crematoria; and
6. services in the sports and exercise, except those of a
commercial nature.
Letter c
Postal services using stamps shall include the services
of delivering letters using adhesive postage stamps or
using other means in place of postage stamps.
Letter d
Financial services shall include:
1. services of collecting funds from the public in the
form of demand deposit, time deposit, deposit
certificate, savings, and/or other equivalent forms;
2. services of placing funds, borrowing funds, or
lending funds to other parties using documents,
telecommunication facilities, or using sight drafts,
checks, or other facilities;
3. financing services, including financing based on
sharia principles, in the form of:
a. capital leasing;
b. factoring;
c. credit card businesses; and/or
d. consumer financing;
4. loan disbursement services based on the law of
collateral, including sharia pawn services and
fiduciary services; and
5. underwriting services.
Letter e
The meaning of “insurance services” shall be insurance
coverage services including loss insurance, life
insurance, and reinsurance, performed by insurance
companies to holders of insurance policies, not
including insurance support services such as insurance
agents, insurance claims adjusters, and insurance
consultants.
Letter f
Religious services shall include:
1. services of houses of worship;
2. services of providing sermons or proselytism
3. services of conducting religious activities;
and
4. other services in the religious sector.
Letter g
Educational services shall include:
1. services of operating school education, such as
services operating general education, vocational
education, special education, official service
education, religious education, academic education,
and professional education; and
2. services of providing non-school education.
Letter h
Artistic and entertainment services shall include all
types of services performed by artistic or entertainment
workers.
Letter i
Non-commercial broadcasting services shall include
services of radio or television broadcasting performed
by a government or private agency that do not constitute
advertising and are not financed by a sponsor for
commercial purposes.
Letter j
Self-explanatory.
Letter k
Employment services shall include:
1. employment services;
2. labor supply services as long as the labor supply
enterprise is not responsible for the output of the
work from the workforce concerned; and
3. services of providing workforce training.
Letter l
Hotel services shall include:
1. services of renting rooms, including ancillary
services at hotels, inns, motels, lodgings, hostels,
and facilities related to hotel services for staying
guests; and
2. services of renting spaces for events or meetings at
hotels, inns, motels, lodgings, and hostels.
Letter m
The services provided by governments in the context of
conducting governmental affairs generally include the
types of services executed by government agencies,
including issuance of Building Permits, issuance of
Trading Business Permits, issuance of Taxpayer
Registration Numbers, and production of Resident
Identity Cards.
Letter n
The meaning of “services of providing parking places”
is services of providing places for parking that are
conducted by the owner of the parking places and/or an
entrepreneur to the users of the parking places, with
payment collected.
Letter o
The meaning of “public telephone services using coins”
is public telephone services using coins or tokens,
operated by the government or the private sector.
Letter p
Self-explanatory.
Letter q
Self-explanatory.
Number 6
Article 5
Paragraph (1)
The delivery of Taxable Goods categorized as luxurious by a
producer or the import of Taxable Goods that are categorized as
luxurious, in addition to being subject to Value Added Tax,
shall also be subject to Luxury Sales Tax, based on the
considerations that:
a. a balance is needed in the imposition of tax on low
income consumers and high-income consumers;
b. control is needed over the pattern of the consumption of
Luxury Taxable Goods;
c. it is necessary to protect small-scale and traditional
producers;
d. it is necessary to safeguard state revenues,
The meaning of Luxury Taxable Goods shall be:

1. goods that are not basic commodities; or
2. goods consumed by certain elements of the community;
3. goods generally consumed by high income elements of
the community; and/or
4. goods consumed to indicate status.
Luxury Sales Tax on the import of Luxury Taxable Goods shall
be imposed irrespective of who imports the Taxable Goods and
irrespective of whether the import is carried out continuously or
only once.
In addition, Luxury Sales Tax on the delivery of Luxury
Taxable Goods shall be imposed irrespective of whether any
part of said Taxable Goods has already been subject to Luxury
Sales Tax at the time of a previous transaction.
Included in the definition of production under this paragraph
are the activities of:
a. assembly: combining knocked down parts of a certain
item to become semi-finished goods or finished goods,
such as assembling cars, electronic goods, home
appliances and so forth;
b. cooking: processing goods by means of heating,
whether or not these are mixed with other ingredients;
c. mixing: combining two or more elements (substances)
to produce one or more other item(s);
d. packaging: placing a certain item into an object that
protects the good from damage and/or aids its
marketing;
e. bottling: putting drinks or liquids into bottles that are
sealed in certain ways;
and other equivalent activities, or asking other individuals or
entities to undertake said activities.
Paragraph (2)
The general definition of Input Tax shall only be effective for
Value Added Tax and shall be unknown for Luxury Sales Tax.
Therefore, Luxury Sales Tax already paid shall not be
creditable against the Luxury Sales Tax payable.
Therefore, the principle of its collection shall be effective only
once, namely at the time of:
a. a delivery by a manufacturer or producer of Luxury
Taxable Goods; or
b. an import of Luxury Taxable Goods.
A delivery at a subsequent stage shall no longer be subject to
Luxury Sales Tax.
Number 7
Article 5A
Paragraph (1)
In the event that Taxable Goods that have been delivered are
returned by the buyer, the Value Added Tax and Luxury Sales
Tax that is returned shall reduce the amount of the Output Tax
and Luxury Sales Tax owed by the seller/ Taxable Entrepreneur
and shall reduce:
a. the Input Tax of the Taxable Entrepreneur/ buyer, in the
case that the Input tax on the Taxable Goods that are
returned has been credited;
b. the expense or assets of the Taxable Entrepreneur/ buyer, in
the case that the tax on the Taxable Goods that are returned
has not been credited and has been charged as expense or
capitalized in the acquisition cost of assets; or
c. the expense or assets of a buyer that is not a Taxable
Entrepreneur, in the case that the tax on the Taxable Goods
that are returned has been charged as expense or capitalized
in the acquisition cost of the assets.
Paragraph (2)
The meaning of “Taxable Services that are canceled” is the
cancellation of all or part of the rights or facilities or amenities
by the recipient of the Taxable Services.
In the case that Taxable Services that are delivered are
canceled, whether in part or in whole by the recipient of
Taxable Services, the Value Added Tax of the Taxable Services
that are cancelled shall reduce the Output Tax owed by the
Taxable Entrepreneur/ provider of Taxable Services and shall
reduce:
a. the Input Tax of the Taxable Entrepreneur/ recipient of
Taxable Services, in the case that the Input tax on the
Taxable Services that are canceled has been credited;
b. the expense or assets of the Taxable Entrepreneur/ recipient
of Taxable Services, in the case that the tax on the Taxable
Services that are canceled has not been credited and has
been charged as expense or capitalized in the acquisition
cost of assets; or
c. the expense or assets of a buyer that is not a Taxable
Entrepreneur, in the case that the tax on the Taxable
Services that are canceled has been charged as expense or
capitalized in the acquisition cost of the assets.
Paragraph (3)
Self-explanatory.
Number 8
Article 7
Paragraph (1)
Self-explanatory.
Paragraph (2)
Value Added Tax is a tax that is imposed on the consumption
of Taxable Goods within the Customs Zone. Therefore,
a. Tangible Taxable Goods that are exported;
b. Intangible Taxable Goods from within the Customs Zone
that are used outside the Customs Zone; or
c. Taxable Services that are exported, including Taxable
Services that are delivered by a Taxable Entrepreneur that
produces and exports Taxable Goods based on order or
request using material from and on the instructions of an
orderer from outside the Customs Zone,
shall be subject to Value Added Tax at a rate of 0% (zero
percent).
The imposition of the 0% (zero percent) rate does not mean
exemption from imposition of Value Added Tax. Therefore, the
Input Tax that has been paid for the acquisition of Taxable
Goods and/or Taxable Services in connection with these
activities may be credited.
Paragraph (3)
Based on considerations of economic developments and/or
increased demand for funds for development, the Government
is granted the authority to change the Value Added Tax tariff to
no lower than 5% (five percent) and no higher than 15%
(fifteen percent), still using the single-rate principle. Tariff
changes as mentioned in this paragraph shall be presented by
the Government to the House of Representatives in the context
of discussion and drafting of the Draft State Budget.
Number 9
Paragraph (1)
The Luxury Sales Tax tariff may be stipulated in several tariff
brackets, namely the lowest tariff shall be 10% (ten percent)
and the highest tariff shall be 200% (two hundred percent). The
differences between said tariff brackets shall be based on the
classifications of Luxury Taxable Goods whose delivery is
subject to Luxury Sales Tax as intended under Article 5
paragraph (1).
Paragraph (2)
Luxury Sales Tax is a tax that is imposed on the consumption
of Luxury Taxable Goods within the Customs Zone. Therefore,
Luxury Taxable Goods exported or consumed outside the
Customs Zone shall be subject to Luxury Sales Tax at a tariff
of 0% (zero percent). Luxury Sales Tax already paid on the
acquisition of such exported Luxury Taxable Goods may be
claimed back.
Paragraph (3)
With reference to the considerations stated in the elucidation to
Article 5 paragraph (1), the classifications of goods subject to
Luxury Sales Tax shall be based primarily on the capacity of
the segment of society that uses said goods, in addition to being
based on its utilitarian value to the public in general.
Accordingly, a high tariff shall be imposed on goods consumed
only by high income segments of society. If goods that are
widely consumed in society need to be subject to Luxury Sales
Tax, a low tariff shall be applied. The classification of goods
that are subject to Luxury Sales Tax shall be done after
consulting with the body of the House of Representatives that
deals with finances.
Paragraph (4)
Self-explanatory
Number 10
Article 8A
Paragraph (1)
This paragraph stipulates the method for calculating Value
Added Tax that is payable. For the sake of clarity, the
following sample calculations are provided.
Examples:
a. Taxable Entrepreneur A sells for cash Taxable Goods with
a Selling Price of Rp 25,000,000.
Value Added Tax payable = 10% x Rp 25,000,000 =
Rp 2,500,000
The Value Added Tax of Rp 2,500,000 constitutes Output
Tax that is collected by Taxable Entrepreneur A.
b. Taxable Entrepreneur B renders Taxable Services and
receives a Service Fee of Rp 20,000,000.
Value Added Tax payable = 10% x Rp 20,000,000 =
Rp 2,000,000
The Value Added Tax of Rp 2,000,000 constitutes Output
Tax that is collected by Taxable Entrepreneur B.
c. A person imports Taxable Goods from outside the Customs
Zone with an Import Value of Rp 15,000,000.
Value Added Tax collected through the Director General of
Customs and Excise = 10% x Rp 15,000,000 =
Rp 1,500,000
d. Taxable Entrepreneur D exports Taxable Goods with an
Export Value of Rp 10,000,000.
Value Added Tax payable = 0% x Rp 10,000,000 = Rp 0
This Value Added Tax of Rp 0 constitutes Output Tax.
Paragraph (2)
A Tax Assessment Base in the form of another value shall
be stipulated through or on the basis of a Minister of
Finance Regulation only to ensure a sense of justice in the
following cases:
a. it is difficult to determine the Selling Price, Service Fee
Value, Import Value, or Export Value; and/or
b. the delivery of Taxable Goods is needed by the public at
large, such as drinking water and electricity.
Number 11
Article 9
Paragraph (1)
Self-explanatory.
Paragraph (2)
A buyer of Taxable Goods, recipient of Taxable Services,
importer of Taxable Goods, party that uses Intangible Taxable
Goods from outside the Customs Zone, or party that uses
Taxable Services from outside the Customs Zone must pay
Value Added Tax and is entitled to receive tax collection
evidence. The Value Added Tax that should have been paid
constitutes Input Tax for a buyer of Taxable Goods, recipient of
Taxable Services, importer of Taxable Goods, party that uses
Intangible Taxable Goods from outside the Customs Zone, or
party that uses Taxable Services from outside the Customs
Zone with status as a Taxable Entrepreneur.
The Input Tax that must be paid by the Taxable Entrepreneur
may be credited against the Output Tax collected by the
Taxable Entrepreneur in the same Tax Period.
Paragraph (2a)
Basically, Input Tax shall be credited against Output Tax in the
same Tax Period. However, for a Taxable Entrepreneur that has
not yet commenced production, the Input Tax on acquisition
and/or import of capital goods shall be allowed to be credited
as mentioned in Article 9 paragraph (2), except for Input Tax as
mentioned in Article 9 paragraph (8).
Paragraph (2b)
For the purposes of crediting Input Tax, a Taxable Entrepreneur
shall use a Tax Invoice that fulfils the requirements as
In addition, the Input Tax that is to be credited must also fulfill
the requirements of formal and material correctness as
Paragraph (3)
Self-explanatory.
Paragraph (4)
The Input Tax as intended under this paragraph shall be the
creditable Input Tax.
It is possible that, in any one Tax Period, the creditable Input
Tax may be greater than the Output Tax. This overpaid Input
Tax may be claimed back or set off in the following Tax
Period.
Example:
May 2010 Tax Period:
Output Tax = Rp 2,000,000

Creditable Input Tax = Rp 4,500,000 -
Tax overpaid = Rp 2,500,000
The overpaid tax may be claimed back or set off in the June
2010 Tax Period.
June 2010 Tax Period:

Creditable Input Tax = Rp 2,000,000 -
Tax underpaid = Rp 1,000,000
Tax overpaid from the May 2010
Tax Period carried over to
June 2010 Tax Period = Rp 2,500,000 -
Tax overpaid in June 2010 = Rp 1,500,000
This overpaid tax may be carried over to the July 2010 Tax Period.
Paragraph (4a)
The overpaid Input Tax from a certain Tax Period in
accordance with the provisions in paragraph (4) shall be carried
over to the next Tax Period. However, if overpayment of Input
Tax occurs at the end of a fiscal year, a refund of the overpaid
Input Tax may be requested.
The definition of end of a fiscal year as intended in this
provision includes the time when a Taxpayer winds up its
business (is dissolved).
Paragraph (4b)
Self-explanatory.
Paragraph (4c)
Self-explanatory.
Paragraph (4d)
Self-explanatory.
Paragraph (4e)
To reduce misuse of the granting of the facility of accelerated
restitution of overpaid tax, the Director General of Taxation
may conduct audits after granting preliminary restitution of
overpaid tax.
Paragraph (4f)
In the event that, after conducting an audit, the Director
General of Taxation issues an Underpaid Tax Assessment
Notice, a penalty surcharge as mentioned in Article 17C
paragraph (5) of Law Number 6 of 1983 on General Provisions
and Procedures for Taxation and its amendments shall not be
applied, even if in the previous stage an Order Letter for
Preliminary Restitution of Overpaid Tax has been issued.
Instead, the administrative penalty that is imposed shall be
interest of 2% (two percent) per month for a maximum of 24
(twenty-four) months as mentioned in Article 13 paragraph (2)
of Law Number 6 of 1983 on General Provisions and
Procedures for Taxation and its amendments
If the audit finds indications of criminal acts in the tax sector,
this provision shall not apply.
Paragraph (5)
The meaning of “delivery on which tax is payable” shall be a
delivery of goods or services which in accordance with the
provisions in this Law shall be subject to Value Added Tax.
The meaning of “delivery on which tax is not payable” shall be
a delivery of goods or services which is not subject to Value
Added Tax as intended under Article 4A or which is exempt
from Value Added Tax as intended under Article 16B.
A Taxable Entrepreneur which, in any Tax Period, makes a
delivery on which tax is payable and a delivery on which tax is
not payable may only credit the Input Tax related to the
delivery on which tax is payable. It must be possible to
ascertain from the Taxable Entrepreneur's accounts the part of
the delivery on which tax is payable.
Example:
A Taxable Entrepreneur makes several types of delivery,

namely:
a. deliveries on which
tax is payable = Rp 25,000,000
b. deliveries on which
VAT is not payable = Rp 5,000,000
Output Tax = zero
c. deliveries exempt
from VAT = Rp 5,000,000
Output Tax = zero
Input Tax paid on the acquisition of:

a. Taxable Goods and Taxable Services related to
deliveries on which tax is payable = Rp 1,500,000
b. Taxable Goods and Taxable Services related to
deliveries on which VAT is not payable = Rp 300,000
c. Taxable Goods and Taxable Services related to
deliveries exempt from VAT = Rp 500,000
According to this provision, the Input Tax creditable against the
Output Tax of Rp 2,500,000 shall be only Rp 1,500,000.
Paragraph (6)
If it is not possible to ascertain exactly the Input Tax on
deliveries on which tax is payable, the crediting of the Input
Tax shall be calculated using guidelines stipulated through a
Regulation of the Minister of Finance, which is intended to
facilitate and provide assurance for the Taxable Entrepreneur.
Example:
A Taxable Entrepreneur makes two types of delivery, namely:

a. deliveries on which tax is payable = Rp 35,000,000
b. deliveries on which tax is not payable = Rp 15,000,000

Output Tax = zero
The Input Tax paid for acquisition of Taxable Goods and/or

Taxable Services related to all deliveries comes to
Rp 2,500,000, while the Input Tax related to deliveries on
which tax is payable cannot be ascertained exactly. According
to this provision, the Input Tax of Rp 2,500,000 shall not be
fully creditable against the Output Tax of Rp 3,500,000. The
amount of the creditable Input Tax shall be calculated based on
the guidelines stipulated in a Regulation of the Minister of
Finance.
Paragraph (6a)
In order to be creditable, the Input Tax on expenditures in the
context of import and/or acquisition of capital goods must also
fulfill the requirement that the expenditure must be related to
the existence of deliveries on which Value Added Tax is
payable.
In the event that a Taxable Entrepreneur experiences failure to
start production, there is no delivery on which tax is payable
and therefore no creditable Output Tax. Therefore, as a
consequence, the Input Tax on import and/or acquisition of
capital goods that has previously been restituted must be paid
back.
Paragraph (6b)
Self-explanatory.
Paragraph (7)
In order to simplify the calculation of the Value Added Tax that
must be deposited, a Taxable Entrepreneur whose turnover in
one (1) year does not exceed a certain amount may calculate
the amount of its creditable Input Tax using the guidelines for
calculation of Input Tax crediting.
Paragraph (7a)
In order to provide convenience in calculating the Value Added
Tax that must be deposited, a Taxable Entrepreneur that
engages in certain business activities may calculate the amount
of its creditable Input Tax using the guidelines for calculation
of Input Tax crediting.
Paragraph (7b)
Self-explanatory.
Paragraph (8)
Basically, the Input Tax shall be creditable against the Output
Tax, but the Input Tax on the expenditures as intended under
this paragraph shall not be creditable.
Letter a
This provision provides legal certainty that the Input
Tax acquired before an entrepreneur is confirmed as a
Taxable Entrepreneur shall not be creditable.
Example:
Entrepreneur A reports its business in order to be
confirmed as a Taxable Entrepreneur on 19 April 2010.
The confirmation as Taxable Entrepreneur is granted on
20 April 2010 and is retroactively effective as of 19
April 2010. The Input Tax acquired before 19 April
2010 shall not be creditable pursuant to this provision.
Letter b
The meaning of expenditure directly related to business
activities shall be expenditures for production,
distribution, marketing and management. This provision
is applicable for all business sectors. In order to be
creditable, the Input Tax must also fulfill the
requirement that the expenditure is related to the
existence of deliveries on which Value Added Tax is
payable. Therefore, even if a certain expenditure meets
the requirement of being directly related to business
activities, there is still a possibility that this Input Tax is
not creditable if the expenditure is not related to
deliveries on which Value Added Tax was payable.
Letter c
Self-explanatory
Letter d
This provision provides legal certainty that the Input
Tax acquired before an entrepreneur is confirmed as a
Taxable Entrepreneur shall not be creditable.
Example:
Entrepreneur A reports its business in order to be
confirmed as a Taxable Entrepreneur on 19 April 2010.
The confirmation as Taxable Entrepreneur is granted on
20 April 2010 and is retroactively effective as of 19
April 2010. The Input Tax acquired before 19 April
2010 shall not be creditable pursuant to this provision.
Letter e
Self-explanatory
Letter f
Self-explanatory
Letter g
Self-explanatory
Letter h
In certain circumstances it may happen that a Taxable
Entrepreneur only pays the Value Added Tax payable
on the acquisition or use of Taxable Goods or Taxable
Services after the tax assessment is issued. The Value
Added Tax paid on the basis of said tax assessment
shall not constitute creditable Input Tax.
Letter i
In accordance with the self-assessment system, a
Taxable Entrepreneur must report all its business
activities in Periodic Value Added Tax Returns. In
addition, the Taxable Entrepreneur is also given the
opportunity to correct Periodic Value Added Tax
Returns, with the result that it is reasonable that any
Input Tax not reported in the Periodic Value Added Tax
Returns shall not be creditable.
Example:
A Periodic Tax Return reports:

Input Tax = Rp 8,000,000
An audit shows:
Input Tax = Rp 11,000,000
In this case, the creditable Input Tax is not

Rp 11,000,000 but Rp 8,000,000, in accordance with
the amounts reported in the Periodic Value Added Tax
Return.
Therefore, the calculation resulting from the audit is:

Input Tax = Rp 8,000,000 (-)
Underpaid tax according to

result of audit = Rp 7,000,000
Underpaid tax according to

Tax Return = Rp 2,000,000 (-)
Outstanding
underpaid tax = Rp 5,000,000
Letter j
Self-explanatory
Paragraph (9)
This paragraph enables a Taxable Entrepreneur to credit Input
Tax against the Output Tax in a different Tax Period, which is
caused, among other matters, by the Tax Invoice being received
late. Said crediting of Input Tax in a different Tax Period shall
only be permitted in a following Tax Period no later than 3
(three) months after the end of the Tax Period concerned. If
said period has elapsed, the crediting of Input Tax may be done
by correcting the Periodic Value Added Tax Return concerned.
Both these methods of crediting may only be done if the Input
Tax has neither been charged as a cost nor added (capitalized)
to the acquisition price of the Taxable Goods or Taxable
Services concerned and the Taxable Entrepreneur has not been
audited.
Example:
Input Tax on the acquisition of Taxable Goods whose Tax
Invoice is dated 7 July 2010 may be credited against the Output
Tax in the July 2010 Tax Period or in the following Tax
Periods, no later than the October 2010 Tax Period.
Paragraph (10)
Self-explanatory
Paragraph (11)
Self-explanatory
Paragraph (12)
Self-explanatory
Paragraph (13)
Self-explanatory
Paragraph (14)
Self-explanatory
Number 12
Article 11
Paragraph (1)
The collection of Value Added Tax and Luxury Sales Tax
follows the accrual method, meaning that tax shall be payable
at the time the Taxable Goods are delivered or the Taxable
Services are rendered, even though the payment for said
delivery has yet to be fully or partially received, or at the time
the Taxable Goods are imported. The time at which tax shall be
payable for transactions through electronic commerce shall
comply with this paragraph.
Letter a
Self-explanatory
Letter b
Self-explanatory
Letter c
Self-explanatory
Letter d
If an individual or entity uses Intangible Taxable Goods
from outside the Customs Zone within the Customs
Zone or uses Taxable Services from outside the
Customs Zone within the Customs Zone, the tax shall
be payable at the time the individual or entity starts to
use the Intangible Taxable Goods or Taxable Services
within the Customs Zone. This matter is related to the
fact that the party delivering the Intangible Taxable
Goods or Taxable Services is outside the Customs Zone
and therefore cannot be confirmed as a Taxable
Entrepreneur. Accordingly, the time at which tax is
payable is no longer related to the time of delivery, but
to the time of use.
Letter e
Self-explanatory
Letter f
Self-explanatory
Letter g
Self-explanatory
Letter h
Self-explanatory
Paragraph (2)
If payment is received prior to the delivery of the Taxable
Goods as intended under Article 4 paragraph (1) letter a, prior
to the delivery of Taxable Services as intended under Article 4
paragraph (1) letter c, prior to the commencement of the use of
Intangible Taxable Goods from outside the Customs Zone as
intended under Article 4 paragraph (1) letter d, or prior to the
commencement of the use of Taxable Services from outside the
Customs Zone as intended under Article 4 paragraph (1) letter
e, the time at which the tax shall be payable shall be the time of
payment.
Paragraph (3)
Self-explanatory
Paragraph (4)
Self-explanatory
Paragraph (5)
Self-explanatory
Number 13
Article 12
Paragraph (1)
An individual Taxable Entrepreneur shall pay tax at his/her
place of residence and/or business location, while an entity
Taxable Entrepreneur shall pay tax at its place of domicile and
business location.
If a Taxable Entrepreneur has more than one business location
other than his/her place of residence or its place of domicile,
each of these places shall constitute a location at which tax is
payable and the Taxable Entrepreneur must report its
businesses in order to be confirmed as a Taxable Entrepreneur.
If a Taxable Entrepreneur has more than one location at which
tax is payable located in the jurisdiction of one Office of the
Directorate General of Taxation, the Taxable Entrepreneur shall
choose one business location as the location at which tax is
payable, which shall be responsible for all of these business
locations at which tax is payable, except that if the Taxable
Entrepreneur wishes to have more than one place where tax is
payable, the Taxable Entrepreneur must notify the Director
General of Taxation.
In certain circumstances, the Director General of Taxation may
designate another place other than the residence, place of
domicile or business location as the place where tax is payable.
Example 1:
An individual A, who resides in Bogor, has a business in
Cibinong. If no Taxable Goods and/or Taxable Services are
delivered at individual A’s residence, individual A only needs
to report its business to be confirmed as a Taxable Entrepreneur
at the Cibinong Tax Service Office because the location at
which tax is payable for individual A is at Cibinong. In
contrast, if the delivery of Taxable Goods and/or the rendering
of Taxable Services by individual A is carried out only at the
residence, individual A only needs to register at the Bogor Tax
Service Office. However, if individual A delivers Taxable
Goods and/or Taxable Services both at his/her place of
residence and at the business location, individual A must
register at the Bogor Tax Service Office and the Cibinong Tax
Service Office because the locations at which tax is payable are
in Bogor and Cibinong.
Unlike individuals, entity Taxable Entrepreneurs must register

themselves both in the place of domicile and in the business
location because an entity Taxable Entrepreneur is deemed to
make deliveries of Taxable Goods and/or Taxable Services in
both these places.
Example 2:
PT A has three business locations, located in Bengkulu,
Bintuhan and Manna, all three of which are under the
jurisdiction of the same tax service office, i.e. the Bengkulu
Tax Service Office. These three business locations all deliver
Taxable Goods and/or Taxable Services and each has sales and
financial administration, with the result that PT A pays tax in
these three places or cities. Accordingly, PT A must choose one
of the business locations, for example the business location in
Bengkulu, in order to report its business in order to be
confirmed as a Taxable Entrepreneur. PT A’s business location
in Bengkulu is responsible for reporting all business activities
of the three branches of the company.
In the event that PT A wishes the business locations in
Bengkulu and Bintuhan to be designated as places where tax is
payable for all its business activities, PT A must notify the
Head of the Bengkulu Tax Service Office.
Paragraph (2)
If a Taxable Entrepreneur pays tax in more than one business
location, said Taxable Entrepreneur in fulfilling its tax
obligations may submit a written notification to the Director
General of Taxation in order to choose one or more place(s) as
the place at which tax is payable.
Paragraph (3)
Self-explanatory
Paragraph (4)
An individual or entity, whether a Taxable Entrepreneur or not
a Taxable Entrepreneur, which uses Intangible Taxable Goods
from outside the Customs Zone within the Customs Zone
and/or uses Taxable Services from outside the Customs Zone
within the Customs Zone shall still pay tax at the place of
residence and/or business location of the individual or the place
of domicile and/or business location of the entity.
Number 14
Article 13
Paragraph (1)
If Taxable Goods and/or Taxable Services are delivered, the
Taxable Entrepreneur delivering the Taxable Goods and/or
rendering the Taxable Services must collect the Value Added
Tax payable and give a Tax Invoice as proof of tax collection.
The Tax Invoice need not be made specially or differently from
the bill of sale. The Tax Invoice may be in the form of a bill of
sale or a specific document designated as a Tax Invoice by the
Pursuant to this provision, for every delivery of Taxable Goods
in the form of assets that are not originally intended to be
traded as mentioned in Article 16D, a Tax Invoice must be
issued.
Paragraph (1a)
In principle, a Tax Invoice must be made at the time of delivery
or at the time of receipt of payment in the case that payment
was made before delivery. In certain circumstances, it is
possible that the time of producing the Tax Invoice may not be
the same as those times, for example in the cases of delivery of
Taxable Goods and/or rendering of Taxable Services to a
government treasurer. Therefore, the Minister of Finance shall
have the authority to stipulate other times as times for
producing Tax Invoices.
Paragraph (2)
Notwithstanding the provisions as intended under paragraph
(1), in order to relieve administrative burdens, a Taxable
Entrepreneur shall be permitted to make one Tax Invoice
covering all Taxable Goods delivered and/or Taxable Services
rendered in one calendar month to the same buyer or same
receiver of Taxable Services, called a Combined Tax Invoice.
Paragraph (2a)
In order to relieve administrative burdens, a Taxable
Entrepreneur shall be permitted to make a Combined Tax
Invoice no later than the end of the month of delivery of the
Taxable Goods and/or rendering of Taxable Services even if
partial or full payment has already been made during the month
of delivery.
Example 1:
In the case that Taxable Entrepreneur A makes deliveries of
Taxable Goods to entrepreneur B on 1, 5, 10, 11, 12, 20, 25, 28
and 31 July 2010, but as of 31 July 2010 there has been no
payment whatsoever for the deliveries, Taxable Entrepreneur A
is allowed to produce one (1) combined Tax Invoice that covers
all the deliveries made during July, no later than 31 July 2010.
Example 2:
Taxable Entrepreneur A makes deliveries of Taxable Goods to
entrepreneur B on 2, 7, 9, 10, 12, 20, 26, 28, 29 and 30
September 2010. On 28 September 2010, there is a payment by
entrepreneur B for the delivery on 2 September 2010. In the
case that Taxable Entrepreneur A issues a combined Tax
Invoice, the combined Tax Invoice is produced on 30
September 2010 and covers all deliveries made during
September.
Example 3:
Taxable Entrepreneur A makes deliveries of Taxable Goods to
entrepreneur B on 2, 7, 9, 10, 12, 20, 26, 28, 29 and 30
September 2010. On 28 September 2010, there is a payment by
entrepreneur B for the delivery on 2 September 2010 and an
advance payment for a delivery to be made in October 2010. In
the case that Taxable Entrepreneur A issues a combined Tax
Invoice, the combined Tax Invoice is produced on 30
September 2010 and covers all deliveries and the advance
payment made during September.
Paragraph (3)
Self-explanatory
Paragraph (4)
Self-explanatory
Paragraph (5)
The Tax Invoice shall constitute proof of tax collection and
may be used as a means of crediting Input Tax. The Tax
Invoice must be completed completely, clearly and accurately
and be signed by a party appointed by the Taxable Entrepreneur
to sign it. However, information regarding the Luxury Sales
Tax shall only be completed if Luxury Sales Tax is payable on
the delivery of Taxable Goods. A Tax Invoice not completed in
accordance with the provisions in this paragraph may result in
the Value Added Tax stated therein not being credited in
accordance with the provisions in Article 9 paragraph (8) letter
f.
Paragraph (6)
Notwithstanding the provisions as intended under paragraph
(5), the Director General of Taxation may designate the
documents usually used in the business community as being
equivalent in status to Tax Invoices.
This provision is necessary, among other reasons, because:
a. the bills of sale used by entrepreneurs, such as
telephone payment receipts and airplane tickets, are
familiar to the general public;
b. to prove the collection of tax, there must be a Tax
Invoice, while the party that should make the Tax
Invoice, namely the party delivering the Taxable Goods
or Taxable Services, is outside the Customs Zone. For
example, if Taxable Services from outside the Customs
Zone are used, the Tax Deposit Statement may be
stipulated as the Tax Invoice; and
c. there are certain documents that are used in the import
or export of Tangible Taxable Goods
Paragraph (7)
Self-explanatory
Paragraph (8)
The Tax Invoices that shall be amended include Tax Invoices that are filled in
incorrectly or contain errors in writing. Included in the
definition of incorrect entries or errors in writing are
adjustments to Selling Price due to reduction in the quantity or
quality of Taxable Goods that reasonably occurs at the time of
delivery.
Paragraph (9)
A Tax Invoice shall meet the formal requirements if it is filled
in completely, clearly, and accurately in accordance with the
requirements mentioned in paragraph (5) or requirements
stipulated in a Director General of Taxation Regulation as
mentioned in paragraph (6).
Tax Invoices or certain documents whose status is considered
equivalent to Tax Invoices shall fulfill the material
requirements if they contain accurate information about the
delivery of Taxable Goods and/or rendering of Taxable
Services, export of Tangible Taxable Goods, export of
Intangible Taxable Goods, export of Taxable Services, import
of Taxable Goods or use within the Customs Zone of Taxable
Services and use of Intangible Taxable Goods from outside the
Customs Zone.
Thus, even if a Tax Invoice or certain other document whose
status is considered equivalent to a Tax Invoice meets the
formal requirements and its Value Added Tax has been paid, if
the information entered in the Tax Invoice or other document
whose status is considered equivalent to a Tax Invoice is not in
accordance with the actual facts regarding the delivery of
Taxable Goods and/or rendering of Taxable Services, export of
Tangible Taxable Goods, export of Intangible Taxable Goods,
export of Taxable Services, import of Taxable Goods or use
within the Customs Zone of Taxable Services and use of
Intangible Taxable Goods from outside the Customs Zone, then
the Tax Invoice or other document whose status is considered
equivalent to a Tax Invoice shall not met the material
requirements.
Number 15
Article 15A
In order to provide flexibility to Taxable Entrepreneurs to deposit their
underpaid tax and file their Periodic Value Added Tax Returns, this
Article specifically stipulates deadlines for payment and filing of
Periodic Value Added Tax Returns that differ from those stipulated in
Law Number 6 of 1983 on General Provisions and Procedures for
Taxation and its amendments.
In the event of delay in payment of tax payable according to a Periodic
Value Added Tax Return and/or delay in filing to a Periodic Value
Added Tax Return in accordance with the provisions stipulated in this
Article, the Taxable Entrepreneur shall still be subject to administrative
penalties as stipulated in Law Number 6 of 1983 on General Provisions
and Procedures for Taxation and its amendments.
Number 16
Article 16B
Paragraph (1)
One of the principles in the Tax Law that must be firmly
upheld is the enforcement and application of equal treatment to
all Taxpayers or to all tax cases which are essentially the same
by closely complying with the provisions in the laws and
regulations. Accordingly, each tax facility, if actually
necessary, must refer to the above mentioned principles and
care must be taken to ensure that its application does not
deviate from the goals and objectives of granting said facility.
The goal and objective of granting facilities is basically to
provide the tax facilities that are really necessary, especially in
order to ensure that the economic sectors given high national
priority succeed, boost the development of the business
community and increase competitiveness, support national
defense and facilitate national development.
The tax facilities set forth in this article are only granted:
a. to boost exports that constitute national priorities in
Bonded Storage or to develop other regions within the
Customs Zone especially established for said purpose;
b. to accommodate possible agreements with another
country or other countries in the sectors of trade and
investment, international conventions that have been
ratified, and other customary international practices;
c. to promote better public health through the procurement
of vaccines needed in respect of the national
immunization program;
d. to assure the availability of the equipment of the
Indonesian National Military/ Indonesian National
Police Force (TNI/POLRI) which is adequate to protect
the territory of the Republic of Indonesia from external
and internal threats;
e. to ensure the availability of border data and aerial
photographs of the territory of the Republic of
Indonesia needed by TNI to support national defense;
f. to improve the nation's education and intelligence by
helping the procurement of general text books, holy
books and religious books at prices affordable to the
public;
g. to promote the construction of places of worship;
h. to ensure the availability of housing affordable to low
income communities, namely simple houses, very
simple houses and simple flats;
i. to boost the development of the national fleet in the
sectors of land, sea and air transport;
j. to encourage national development by helping the
availability of strategic goods, such as raw material for
silver handicrafts;
k. to ensure the execution of government projects financed
by grants and/or foreign loans;
l. to accommodate customary international practice in the
importation of certain Taxable Goods that are exempted
from collection of Import Duty;
m. to assist the availability of Taxable Goods and/or
Taxable Services that are needed for mitigation of
natural disasters that are designated as national natural
disasters;
n. to ensure the availability of clean water and electricity,
which are urgently needed by the community; and/or
o. to ensure the availability of public transport in the air to
encourage the smooth flow of goods and persons in
certain regions where other suitable means of transport
is not available, where the ratio between the volume of
goods and persons that need to be moved to the
available means of transportation is very high.
Paragraph (2)
The special treatment in the form of the Value Added Tax
payable not being collected means that the Input Tax related to
the delivery of Taxable Goods and/or the rendering of Taxable
Services which obtains said special treatment shall remain
creditable, with the result that the Value Added Tax shall
remain payable but it is not collected.
Example:
Taxable Entrepreneur A produces Taxable Goods which obtain
a facility from the State, namely that the Value Added Tax
payable on the delivery of said Taxable Goods shall be
permanently not collected (not merely deferred).
In order to produce said Taxable Goods, Taxable Entrepreneur

A uses other Taxable Goods and/or Taxable Services as raw
materials, auxiliary materials, capital goods or other cost
components.
At the time said other Taxable Goods and/or Taxable Services

are purchased, Taxable Entrepreneur A shall pay the Value
Added Tax to the Taxable Entrepreneurs selling or delivering
the Taxable Goods or Taxable Services.
If the Value Added Tax paid by Taxable Entrepreneur A to the

supplying Taxable Entrepreneurs constitutes Input Tax
creditable against the Output Tax, the Input Tax shall remain
creditable against the Output Tax even though said Output Tax
is zero because of the facility of the non-collection of the Value
Added Tax by the State pursuant to the provisions as intended
under paragraph (1).
Paragraph (3)
Unlike the provisions in paragraph {2), the special treatment in
the form of exemption from Value Added Tax causes there to
be no Output Tax, with the result that Input Tax related to the
delivery of Taxable Goods and/or Taxable Services securing
the exemption facility shall not be creditable.
Example:
Taxable Entrepreneur B produces Taxable Goods securing a
facility from the state, namely the exemption from Value
Added Tax on the delivery of the goods.
In order to produce the Taxable Goods, Taxable Entrepreneur B
uses other Taxable Goods or Taxable Services as raw materials,
auxiliary materials, capital goods and other cost components.
At the time the Taxable Goods and/or Taxable Services are
bought, Taxable Entrepreneur B pays Value Added Tax to the
Taxable Entrepreneurs selling or delivering the Taxable Goods
or Taxable Services.
Even though the Value Added Tax paid by Taxable
Entrepreneur B to the supplier Taxable Entrepreneur constitutes
creditable Input Tax, the Input Tax shall not be creditable
because there is no Output Tax payable due to the granting of
the facility of exemption from tax as intended under paragraph
(1).
Number 17
Article 16D
Deliveries of Taxable Goods including such things as machinery,
structures, equipment, furniture, or other Taxable Goods that were not
originally intended to be traded by a Taxable Entrepreneur shall be
subject to tax.
However, Value Added Tax is not imposed on the transfer of Taxable
Goods that are not directly connected with business activities and
transfer of assets that were not originally intended to be traded, i.e.
sedans and station wagons, the Input Tax on the acquisition of which
assets, according to Article 9 paragraph (8) letter b and letter c, is not
creditable.
and Procedures for Taxation and its amendments.
Number 18
Article 16E
Paragraph (1)
In order to attract individuals holding foreign passports to visit
Indonesia, such individuals are given a tax incentive. The form
of this incentive is the refund of Value Added Tax and Luxury
Sales Tax that has been paid for the purchase of Taxable Goods
in Indonesia that will then be taken out of the Customs Zone by
such individuals.
Paragraph (2)
Taxable Goods that are purchased in the time period of one (1)
month before an individual foreign passport holder leaves
Indonesia are deemed to be intended to be consumed outside
the Customs Zone. Therefore, the Tax Invoices that may be
used as a basis for requesting refund of Value Added Tax and
Luxury Sales Tax are limited to only those Tax Invoices issued
within one (1) month before the individual foreign passport
holder leaves Indonesia.
For an individual foreign passport holder who does not have a
Taxpayer Registration Number, the Tax Invoices that may be
used to request refund of Value Added Tax and Luxury Sales
Tax must mention the individual’s identity in the form of name,
passport number, and full address of the individual in the
country that issued the passport.
Paragraph (3)
Self-explanatory.
Paragraph (4)
Self-explanatory.
Paragraph (5)
Self-explanatory.
Article 16 F
In line with the principle that the burden of tax payment for Value
Added Tax on Goods and Services and Sales Tax on Luxury Goods
lies with the buyer or consumer of the goods or recipient of the
services, for this reason the buyer or consumer of goods or recipient of
services should be jointly responsible for the payment of tax owed, if it
happens that the tax payable cannot be collected from the seller or
provider of services and the buyer or recipient of services cannot show
evidence that it has paid the tax to the seller or provider of services.
ARTICLE II
Self-explanatory
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA

NUMBER 5069

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LAW OF THE REPUBLIC OF INDONESIA

THIRD AMENDMENT OF LAW NUMBER 8 YEAR 1983

BY THE GRACE OF ALMIGHTY GOD

b. that based on the considerations mentioned in letter a, it is necessary to

2. Law Number 6 of 1983 regarding General Provisions and Procedures for

With the joint approval of

To stipulate: LAW REGARDING THE THIRD AMENDMENT OF LAW

A number of provisions in Law Number 8 of 1983 regarding Value Added Tax on

1. The provisions in Article 1 shall be amended to read as follows:

1. The Customs Zone shall be the territory of the Republic of Indonesia

2. Goods shall be tangible goods, which by nature or by law are in the

4. A Delivery of Taxable Goods shall be any activity of delivering

5. Services shall be any activities of services conducted pursuant to a

6. Taxable Services shall be services that are subject to tax pursuant to

9. An Import shall be any activity of bringing goods from outside

11. An Export of Tangible Taxable Goods shall be any activity of

14. An Entrepreneur shall be an individual or entity in any form

15. A Taxable Entrepreneur shall be an Entrepreneur that delivers Taxable

16. Production shall be the activity of processing to change the form

21. A Buyer shall be an individual or entity that receives or should receive

22. A Service Recipient shall be an individual or entity that receives or

28. Export of Intangible Taxable Goods shall be every activity of use of

29. Export of Taxable Services shall be every activity of rendering of

2. The provisions of Article 1A shall be revised to read as follows:

(1) The definition of the delivery of Taxable Goods shall cover:

(2) The definition of a delivery of Taxable Goods shall not include:

3. The provisions in Article 3A shall be amended to read as follows:

(1) An Entrepreneur that makes a delivery as intended under Article 4

(1a) A small-scale entrepreneur as mentioned in paragraph (1) may choose

(2) A small-scale entrepreneur that chooses to be confirmed as a Taxable

(3) An individual or entity using Intangible Taxable Goods from outside

4. The provisions in Article 4 shall be amended to read as follows:

(1) Value Added Tax shall be imposed on:

5. The provisions in Article 4A shall be amended to read as follows:

6. The provisions in Article 5 shall be amended to read as follows:

(1) In addition to the Value Added Tax imposed as mentioned in Article 4

7. The provisions in Article 5A shall be amended to read as follows:

9. The provisions in Article 8 shall be amended to read as follows:

(3) Provisions on the classifications of Taxable Goods categorized as

(4) Provisions on the types of goods subject to Sales Tax on Luxury

(2) Provisions regarding other value as mentioned in paragraph (1) shall be

(4b) Notwithstanding the provisions as mentioned in paragraph (4) and

(4c) Refund of overpaid Input Tax to a Taxable Entrepreneur as mentioned

(4d) Provisions regarding low-risk Taxable Entrepreneurs who shall be

(4e) The Director General of Taxation may conduct audits of Taxable

(6b) Provisions regarding determination of times, calculations, and

(7b) Provisions regarding turnover as mentioned in paragraph (7), certain

(13) Provisions regarding the calculation and procedure for refunds of

(14) In the event of transfer of Taxable Goods in the context of a business

(1) Tax shall be payable at the time of:

(1) A Taxable Entrepreneur that makes a delivery as intended under

(2) Based on a written notification from a Taxable Entrepreneur, the

(4) An individual or entity that uses Intangible Taxable Goods and/or

14. The provisions in Article 13 shall be amended so that Article 13 reads as

(2) Notwithstanding the provisions as mentioned in paragraph (1), a

(2a) The Tax Invoice as mentioned in paragraph (1) must be produced no

(5) A Tax Invoice must state information on the delivery of Taxable

(6) The Director General of Taxation may designate certain documents as

(1) Deposits of Value Added Tax by a Taxable Entrepreneur as mentioned

(1) Non-collection of either part or all of the tax payable, or exemption

17. The provisions in Article 16D shall be amended to read as follows:

Buyers of Taxable Goods or recipients of Taxable Services are jointly and