The Director General of Taxes (DGT) on 25 June 2020
issued an implementing regulation on digital VAT,
i.e. DGT Regulation No. PER-12/PJ/2020.

Following are few key highlights of the implementing regulation.

1. Appointment of VAT Collector
   • The VAT collection mechanism shall be initiated with appointment of foreign digital provider as “VAT Collector” by the DGT. The VAT collection process shall be started at the following month upon the appointment.
   • The thresholds for appointment are as follow:
     • Transaction value with Indonesian customers exceeds IDR 600 million a year or IDR 50 million a month; and/or
     • Number of traffic of accessor in Indonesia exceeds 12,000 a year or 1,000 a month.
   • The DGT may revoke VAT collector appointment if certain threshold is not met, or upon DGT’s consideration. The revocation will be effective on the following month after the date of the revocation.
   • VAT collector will be given identification number for administration purpose. This includes Tax Registration Letter (Surat Keterangan Terdaftar) and Tax Identification Number Card (Kartu Nomor Identitas Perpajakan).
   • VAT collector needs to activate the account and update data through online application system as provided by the DGT before VAT Collector status is effective.
2. VAT Collection
   • The VAT rate is 10% of the amount paid by customers.
   • The collection is performed upon payment by customers.
   • For direct transaction from foreign seller/service provider to Indonesian customers, the VAT is collected by the foreign provider.
   • For transaction through e-commerce, the VAT collection is performed by e-commerce operator which: (i) is appointed as VAT collector, and (ii) issues commercial invoice, billing, order receipt, or other relevant document.
   • VAT collector shall issue VAT collection slip that could be in the form of commercial invoice, billing, order receipt, or other relevant document which mentions payment and VAT collection (may be separated from tax base or as part of payment). The said document is made in accordance with digital provider’s business.
   • If customer wants to credit its purchase VAT, the VAT collection slip must specify the name and Tax Identification Number (TIN).
   • VAT collection slip is regarded as VAT invoice equivalent as long as it specifies the name and TIN of the customer or the customer’s registered email at the DGT.
3. VAT Payment
   • The collected VAT is payable by the end of the following month. The payment is settled electronically through billing code to the state treasury account or by using other procedure as determined by the DGT.
   • The payment may be settled in Rupiah (using Minister of Finance rate at the date of payment), USD, or other currency as determined by the DGT.
4. VAT Reporting
   • VAT collector must submit report of VAT collection quarterly, by the end of the following month after the quarter ended, [quarterly being: Jan – March, April -June, July – Sept, Oct – Dec]. The report shall at least cover: number of customers, amount of payment by customers excluding VAT, amount of VAT collection, and amount of VAT settlement, for each tax period. This reporting requirement is mandatory even if the amount of VAT collection is nil. The report can be amended if there is finding on tax underpayment. The report shall also include compensation of VAT overpayment, if applicable.
   • Upon request by the DGT, VAT collector must submit detail of VAT collection for 1 (one) year period. The report shall at least cover: number and date of VAT collection slip; amount of payment excluding VAT for each slip; amount of VAT collection for each slip; name and TIN of customer (if any); phone number, email, or other customer identity.
   • The report may be prepared in English and/or Bahasa Indonesia, and to be submitted electronically. Upon submission, VAT collector will be given tax submission receipt.