TaxSavvyID

VAT rate is 12 percent but feels like 11

PPN sekarang 11 atau 12 persen sih?

The situation

The VAT rate is 12 percent from 1 January 2025. For most goods and services PMK 131/2024 uses a base of 11/12 of the price, so the tax equals 11 percent.

The law

  • Art 7, Law 8/1983 on VAT and Luxury Goods Sales Tax (PPN Law), as last amended by Law 6/2023: VAT rate is 12 percent from 1 January 2025; exports are zero rated
  • PMK 131/2024 on VAT for 2025: Luxury goods: 12 percent on the full price; other goods and services: 12 percent on an alternative base of 11/12 of the price, an effective 11 percent

What it means for you

Only luxury goods subject to luxury sales tax use 12 percent on the full price. Example: price IDR 100,000,000: base IDR 91,666,667 x 12 percent = IDR 11,000,000. The DJP says to use invoice code 04 for the 11/12 base.

What to do

  1. Check if any items are luxury goods.
  2. Use the 11/12 base for others.
  3. Use code 04 on invoices where it applies.
  4. Check your billing software.

Using the full price base overcharges customers.

We can do this for youMonthly VAT return and e-Faktur in Coretax: output and input VAT, the 11/12 base and payment: IDR 2.900.000

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