Exempt goods and the threshold
Kami jual sembako yang dibebaskan PPN. Masuk hitungan 4,8 miliar?
The situation
The threshold counts taxable supplies. Supplies that are not subject to VAT or are exempt generally do not count toward it.
The law
- PMK 197/PMK.03/2013 on small entrepreneur limit: A small entrepreneur for VAT is one with taxable turnover up to IDR 4.8 billion in a book year
- Art 3A, Law 8/1983 on VAT and Luxury Goods Sales Tax (PPN Law), as last amended by Law 6/2023: A business making taxable supplies must report to be confirmed as a taxable entrepreneur (PKP), except small entrepreneurs who may opt in
What it means for you
Split your sales into taxable and non taxable or exempt. Only taxable sales count. Example: IDR 6 billion total with IDR 4 billion of exempt staples and IDR 2 billion of taxable goods: below the threshold.
What to do
- Classify each product.
- Track taxable sales only.
- Keep evidence of exempt status.
- Recheck when your product mix changes.
Mislabelling taxable goods as exempt is a common audit issue.
We can do this for youVAT registration as a taxable entrepreneur (PKP): the IDR 4.8 billion test, voluntary registration and verification: IDR 2.500.000