Indonesia: Understanding the Latest E-Invoice Rules

Indonesia's Directorate General of Taxes (DGT) has updated e-Invoice regulations for VAT-registered Taxable Entrepreneurs (PKP). Important changes include requiring NIK/passport number, goods details, foreign currency transactions, NSFP issuance, transaction codes, e-invoice signatories, host-to-host applications, upload deadlines, retail Trader Invoices, VAT facility stamps, paper invoices, VAT crediting, free zone exemptions, and centralized VAT reporting. The Coretax system integrates tax administration, aiming to enhance transparency and reduce tax fraud.

The Directorate General of Taxes (DGT) in Indonesia regulates electronic tax invoices (e-Invoices) through several main regulations, with recent updates outlined in PER-03/PJ/2022, PER-11/PJ/2022, and Minister of Finance Regulation No. 81/2024. Below is a concise summary of the main changes to e-Invoice regulations for VAT-registered Taxable Entrepreneurs (PKP):

Crucial Changes in e-Invoice Regulations

• Inclusion of NIK/Passport Number: e-Invoices for individual buyers must include NPWP or NIK/passport number.
• Goods Details: For motor vehicles, include brand, type, variant, and chassis number; for land/buildings, include complete address.
• Foreign Currency Transactions: Use the KMK exchange rate at the time the e-Invoice should be created.
• NSFP Issuance: Tax Invoice Serial Numbers (NSFP) are provided automatically in the Coretax system after DGT validation.
• Transaction Code: New code 05 for transactions with specific VAT collection (Article 9A, VAT Law).
• e-Invoice Signatories: Authorized signatories must be registered in the e-Invoice app, using electronic signatures matching KTP/passport names. Multiple signatories allowed.
• Host-to-Host (H2H) Application: Limited to official DGT partner PJAPs.
• Upload Deadline: e-Invoices must be uploaded by the 15th of the following month for DGT approval. Late uploads are rejected, invalidating the invoice and preventing VAT reporting.
• Retail Trader Invoices: No buyer identity or signature required for end-consumer transactions. Cannot be credited as input tax.
• VAT Facility Stamp: Added via the e-Invoice app for applicable exemptions.
• Paper Invoices: Allowed in emergencies (e.g., war, natural disasters, system failures). Must follow e-Invoice format and be uploaded post-event for DGT approval.
• Input Tax Crediting: Incomplete invoices due to seller errors can be credited (PER-24/PJ/2022). Other input tax documents must meet VAT crediting rules (PER-11/PJ/2022).
• Free Zone Exemptions: PKP in bonded zones or SEZs may be exempt from creating e-Invoices for specific deliveries (e.g., to end consumers or exports).
• Centralized VAT Reporting: For deliveries to centralized VAT locations with exemptions, use the centralized buyer’s NPWP and address.
• Compliance Notes
• PKP must use the e-Faktur system, register for an electronic certificate, and obtain NSFP for valid invoices.
• Non-compliance may lead to fines (1% of tax base) or audit risks.
• The Coretax system (PMK 81/2024) integrates tax administration, with a transition period to address technical issues like login errors or data migration.

These changes aim to enhance transparency, reduce tax fraud, and align with Indonesia’s digital tax administration goals. For detailed guidance, consult the DGT or tax professionals.