TaxSavvyID

Individual business owner becoming PKP

Saya usaha perorangan omzet 6 miliar. Harus PKP juga?

The situation

Yes. The PKP duty applies to individuals and entities alike once taxable turnover passes IDR 4.8 billion.

The law

  • 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
  • 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
  • PP 55/2022 on income tax adjustments, as amended by PP 20/2026 (in force 22 April 2026): 0.5 percent final tax on gross turnover up to IDR 4.8 billion a year for individuals, single founder PT Perorangan and cooperatives; individuals pay nothing on the first IDR 500 million

What it means for you

With turnover over IDR 4.8 billion you also lose the 0.5 percent income tax scheme from the next year. So both VAT and normal income tax rules apply. Register as a PKP by the end of the month after the month you pass the limit.

What to do

  1. Apply for PKP.
  2. Plan normal income tax with books.
  3. Set up e-Faktur.
  4. Review prices for VAT.

Being an individual does not exempt you from VAT.

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

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