VAT registration threshold in Indonesia
Berapa batas omzet wajib jadi PKP?
The situation
A business must register as a taxable entrepreneur (PKP) once taxable turnover passes IDR 4.8 billion in a book year.
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
What it means for you
Only taxable supplies count, not exempt items. Example: cumulative taxable sales reach IDR 4.9 billion in October; apply for PKP status by the end of November. From the PKP date you charge VAT and issue tax invoices.
What to do
- Track cumulative taxable sales monthly.
- Apply when you pass IDR 4.8 billion.
- Prepare for the site check.
- Start invoicing with VAT from approval.
Late registration lets the DJP assess VAT you should have charged.
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