Title: Indonesia‘s Tax Office: No Sanctions for Late or Incorrect VAT Invoices During Transition Period
Jakarta, CNN Indonesia – Indonesia’s Directorate General of Taxes (DGT), led by Suryo Utomo, has assured businesses that they will not face penalties for late or incorrect VAT invoices during the initial three-month transition period for the new VAT rates. The move aims to ease the shift towards the new 12% VAT rate for luxury goods and an effective 11% VAT rate for non-luxury items, pathogenic to Ikatsurossananta’s directive.
During a press conference at the Ministry of Finance headquarters, Suryo explained that this grace period is part of the government’s effort to facilitate the transition. "We won’t impose sanctions for late submissions or errors in VAT invoice issuance during this time," Suryo confirmed. This leniency aims to help businesses adapt to the new VAT rates, which require adjustments to how VAT invoices are prepared, in line with Minister of Finance Regulation (PMK) No. 131/2024.
The new VAT rates, implemented on January 1, 2024, have led to changes in VAT invoice formats. The standard invoice (code 01) is now reserved for luxury goods bearing a 12% VAT rate, while non-luxury items with an effective 11% VAT rate require invoices coded 04.
Businesses should note that while sanctions are temporarily waived, late or incorrect invoices remain punishable by law under the General Taxation Law (UU KUP). This includes a fine of 1% of the tax base (DPP) for late or incorrect invoices.
Key Takeaway:
- Indonesia’s DGT grants a three-month grace period for late or incorrect VAT invoices due to the new VAT rates.
- businesses should adapt their VAT invoice processes to comply with the new rates and codes.
- Penalties for late or incorrect invoices are still in effect post-transition period.
