Value Added Tax Refund for Tourists
November 2, 2009 by Medan Indonesia
Filed under Leisure, Shopping
Tourists Can get Value Added Tax (PPN) rebate when shopping in Indonesia from 01 April 2010
Indonesia imposes a Value Added Tax (VAT) also known as PPN and PPnBM for luxury goods. The applicable rates are ten percent on most goods and services and between ten and fifty percent for goods and services covered by the Luxury Sales Tax (PPnBM). Certain goods and services are exempt from VAT, including basic food supplies such as rice, salt, corn, and the like; and medical, social (public benefit), religious, education, and art services.
The Ministry of Finance announced the changes in taxation policies today (01 Nov 2009) with “Pasal 16E UU Number 42 year 2009″ on revision of “UU Number 8 year 1983″ about PPN tax on products and services and PPnBM on luxury goods, which will be effective from 1 April 2010.
The new policy stated that individuals holding foreign passport who purchased goods inclusive of PPN and PPnBM can claim tax refund if the goods are to be carried out of the country.
Some of the initial policies include these limitations:
- At the moment, the set price of goods eligible for tax refund has to be Rp500.000 and above and will be revised accordingly with the new laws of Indonesia “Peraturan Pemerintah”
- Goods eligible also need to be purchased within 1 month of bringing out of the country.
- With tax documents of the purchased goods (faktur pajak)
- Only valid for individuals with foreign passports leaving Indonesia
- Goods have to be declared to tax department at airport as indicated by the Ministry of Finance.
- Need to show a valid passport, boarding pass and tax documents (faktur pajak)
Other procedures of tax refund of PPN and PPnBM will be set accordingly by the Ministry of Finance. The new law should increase tourists spending in Indonesia with another 10%-15% refund on goods purchased. Hopefully, it can be implemented successfully.
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Hotel charges included??
Hi Kelvin,
It has not been announced, but I dont think so.
As with other countries, vat refund for tourists do not include services, valid only on goods.
I also think the refund is limited to VAT on goods but why does the statement read “The applicable rates are ten percent on most goods and SERVICES”?
helo..
what abt indonesians who are living overseas, and having holiday in indonesia?
are they eligible?
thank you
There is no details about this as yet, will update when we get more information on this.