Calculate VAT, known locally as PPN, on any amount in Indonesia, whether you need to add it to a price or find it inside a total.
Add PPN on top of a price that does not yet include it.
Most goods and services carry an effective 11 percent. This is the 12 percent statutory rate applied to a tax base of 11/12 of the price.
Your total sales over the last 12 months. We check it against the Rp 4.8 billion point where you must register as a Taxable Entrepreneur (PKP) and charge PPN.
How the PPN is worked out on your amount.
| Price before PPN | 10,000,000.00 |
| Tax base (DPP)11/12 × 10,000,000 | 9,166,666.67 |
| PPN at 12% of the tax baseeffective 11% of price | + 1,100,000.00 |
| Total including PPN | 11,100,000.00 |
This is an estimate. Indonesia's statutory VAT rate is 12 percent, but most goods and services are charged at an effective 11 percent through the DPP Nilai Lain mechanism. Whether a supply is standard, luxury, zero-rated, or exempt depends on the goods or service and the rules in force under the Harmonised Tax Law and PMK 131/2024. Luxury goods may also attract a separate Sales Tax on Luxury Goods (PPnBM). Confirm your treatment with a tax professional before invoicing.
PPN, short for Pajak Pertambahan Nilai, is Indonesia’s Value Added Tax: a consumption tax on the sale of goods and services and on imports. It is an indirect tax collected and remitted by a registered Taxable Entrepreneur, known as a PKP (Pengusaha Kena Pajak), while the cost is passed on to the end consumer.
A PKP charges PPN on its sales (output VAT) and credits the PPN it paid on its purchases (input VAT), remitting the difference to the Directorate General of Taxes each month through an e-Faktur return filed on the Coretax system.
Under the Harmonised Tax Law (UU HPP), Indonesia’s statutory VAT rate rose to 12 percent on 1 January 2025. But to soften the impact, the government applies that 12 percent to a reduced tax base, the DPP Nilai Lain, set at 11/12 of the actual price for ordinary goods and services. The arithmetic works out to an effective 11 percent, the same rate that applied before.
The full 12 percent applies only to luxury goods. So in practice there are two everyday rates: 11 percent effective for almost everything, and 12 percent for luxury items.
Registration as a PKP with the tax office is mandatory once your annual turnover exceeds Rp 4.8 billion. From that point you must charge PPN, issue e-Faktur tax invoices, and file monthly. A business below Rp 4.8 billion is a small entrepreneur, is not required to register, and does not charge PPN, though it may register voluntarily to credit input VAT.
For foreign companies, a PT PMA that crosses the threshold must register the same as any local company.
Crossing the PKP threshold, or setting up a PT PMA? Our Jakarta team handles the PKP registration and the e-Faktur and Coretax onboarding that follows.
The four treatments, summarised.
| Treatment | Applies to |
|---|---|
| 11% effective | Most goods and services, and non-luxury imports (12% on an 11/12 base) |
| 12% | Luxury goods such as high-end vehicles, aircraft, yachts, and premium property |
| 0% | Exports of goods and qualifying exported services |
| Exempt | Basic necessities, certain financial, health, and education services |
What businesses ask before they register.
The statutory rate is 12 percent since 1 January 2025, but most goods and services are charged at an effective 11 percent through the DPP Nilai Lain mechanism (12% on a tax base of 11/12 of the price). Luxury goods are taxed at the full 12 percent.
Under PMK 131/2024, the 12 percent statutory rate is applied to a reduced tax base for ordinary goods and services — 11/12 of the actual price. The arithmetic works out to an effective 11 percent. The full 12 percent applies only to luxury goods.
Rp 4.8 billion in annual turnover. Once you cross it, you must register as a Taxable Entrepreneur (PKP), charge PPN, issue e-Faktur invoices, and file monthly.
For standard goods at the effective 11 percent: multiply the price by 1.11. A Rp 10,000,000 price becomes Rp 11,100,000, of which Rp 1,100,000 is PPN. Luxury goods use 1.12 instead.
Divide the tax-inclusive total by 1.11 for standard supplies (1.12 for luxury) to get the price before PPN. The PPN is the difference.
e-Faktur is the electronic tax invoice every PKP must issue for taxable sales. The data is sent to the tax office and forms the basis for monthly PPN returns through Coretax.
Exports of goods and qualifying exported services are zero-rated. The supply is still taxable, so related input VAT stays creditable.
Zero-rated (0%) supplies are taxable at 0 percent, so input VAT remains creditable. Exempt supplies sit outside PPN entirely, and the related input VAT is not creditable.
Setting up or registering for PPN in Indonesia? We handle PT PMA company setup, registration as a Taxable Entrepreneur (PKP), e-Faktur and Coretax onboarding, and your monthly VAT returns.