Indonesia introduces new electronic VAT invoicing system

Wednesday 19 November 2014 10:33 CET | News

Indonesia has introduced a new electronic VAT invoicing (e-VAT invoicing) system, which is being implemented in 3 stages.

According to Taxand Indonesia, the first stage of the new electronic VAT invoicing system only applies to 45 companies, mostly foreign investment companies, state-owned enterprises and publicly-listed companies.

However, Taxand adds that all multinational companies should prepare by: investigating the features in their accounting software in order to ascertain if upgrades are needed to be compatible with the e-VAT invoice application system, and by taking note that the selling process will be longer since the Directorate General of Taxes (DGT) has to approve the e-VAT invoices issued, therefore corporations need to factor this in when producing business plans and schedules.

The newly introduced regulation provides the following points: the e-VAT invoice must be issued via the electronic application system determined or provided by the DGT; the e-VAT invoice must use an electronic signature; the e-VAT invoice must use the Indonesia rupiah (IDR) as currency (if the transaction is denominated in a foreign currency, it has to be converted into IDR); the hard copy version of the VAT invoice can be accepted only in a ”force majeure” situation; and the use of the e-VAT invoice must be reported to and previously approved by the DGT

Moreover, DGT Decision Letter No. 136/PJ/2014 unveils that the use of e-VAT invoice will be implemented in 3 stages. Thus, starting July 1, 2014, it will be mandatory for the selected 45 corporate taxpayers to issue the e-VAT invoice; starting July 1, 2015, it will be mandatory for all corporate taxpayers registered in the 17 regional tax offices in the islands of Java and Bali; and finally, starting July 1, 2016, it will be mandatory for all corporate taxpayers to implement the e-VAT invoice.

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Keywords: Indonesia, electronic, VAT, invoicing, system, e-VAT, Taxand, accounting software, VAT invoice, IDR, foreign investment companies, state-owned enterprises, DGT
Categories: Banking & Fintech
Countries: World
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Banking & Fintech