In Indonesia, registered taxable entrepreneurs (PKP) must collect Value Added Tax (VAT) on a self-assessment basis on delivery of taxable goods and/or services, including any taxable services rendered overseas. However, to improve the Indonesian economy, the Ministry of Finance (MoF) through the Directorate of Taxes (DoT), recently issued a tax regulation on export of Taxable Services. The purpose of the new regulation is to encourage exports of services and to foster competitiveness within the Indonesian services industry.
Under MoF regulation No. 32/PMK.010/2019, which became applicable on 29 March 2019, several services rendered by PKP to persons and businesses overseas are subject to 0% VAT, including:
a. Tolling services;
b. Repair and maintenance services;
c. Freight forwarding related to goods for export; and
d. Taxable services related to deliverables to be utilised overseas, such as:
The expansion of the export of service sector that are now subject to this preferential rate shows the government's commitment to broadening the opportunities for Indonesian exports services.
Hutomo Pratama Yeputra