How Long Can Taxable Entrepreneurs Use the 11% VAT Rate in Indonesia?
Many PT PMA and local businesses in Indonesia are unsure how long they can keep using the 11% VAT rate in their invoices and tax reports 📄. The situation has become even more confusing as several tax regulations have shifted over the past year, tied closely to budget targets and economic planning 🔍.
This confusion can easily turn into costly tax penalties if you bill the wrong rate 😬. VAT isn’t just a number — it connects to larger policy decisions managed by national agencies like the Ministry of Finance, where detailed VAT changes are published based on the latest fiscal strategies 📊.
The good news? Businesses that follow official updates have avoided these problems by adjusting in time ✅. Important policy changes and implementation timelines are always published clearly by the Directorate General of Taxes, helping companies update their invoice systems and finance teams with confidence.
Just a few months ago, a digital startup in Bali switched from 11% to the new VAT rate ahead of time — simply because they stayed alert to regulatory updates 💡. That readiness saved their team from fixing hundreds of outdated invoices later on.
So, before the next billing cycle hits and you find yourself using the wrong VAT rate 🕒, take a moment to confirm what’s still valid and what’s changing soon. Whether you’re handling invoicing in Xero, Jurnal, or a custom system, a quick check today can save you big headaches tomorrow ✅.
Table of Contents
- Why 11% VAT Still Applies for Taxable Entrepreneurs in 2025 💡
- When Will the 11% VAT Rate Officially Change in Indonesia? 🕒
- How VAT Adjustments Affect PT PMA Invoicing and Reporting 💼
- Official Guidance from Indonesian Tax Authorities on VAT Rates 📄
- Practical Steps to Prepare for Future VAT Increases ✅
- How to Check If Your System Uses the Correct VAT Rate 🔍
- Real Story: A Bali Startup That Shifted VAT Rates in Time 🌿
- Where to Get Updated VAT Rules for Your Business 📊
- FAQs About 11% VAT Use for PT PMA and Local Firms ❓
Why 11% VAT Still Applies for Taxable Entrepreneurs in 2025 💡
Indonesia’s current 11% VAT rate applies to most goods and services sold by taxable businesses, including PT PMA companies. While many entrepreneurs expected the government to raise the rate sooner, the Ministério of Finance announced that the increase to 12% would not take effect in early 2024 as planned. This delay gives businesses more time to adjust their systems, contracts, and pricing before a new rate kicks in 🧾.
For now, using the 11% VAT rate is still fully compliant under the prevailing tax rules. But business owners must stay alert, especially when creating tax invoices or doing VAT reporting in systems like e-Faktur or Coretax. Using the wrong VAT rate can result in errors during audits and even create penalties, especially if the authorities find delayed adjustments across invoices 😬.
What’s needed right now is awareness. Entrepreneurs should continue using 11%—but prepare for the coming rate change by confirming the current regulation and ensuring their internal teams are updated. With proper planning and a reliable finance system, staying compliant doesn’t have to be difficult ✅.
The original plan was for VAT to rise from 11% to 12% in 2025, as part of the government’s strategy under Law No. 7/2021 on Harmonization of Tax Regulations. However, the schedule for this increase has not been officially confirmed yet 🔄. For now, business owners must wait for clear updates from the government.
What this means: Taxable entrepreneurs should monitor news from official channels, including government press releases and tax regulation updates. While there’s no fixed date yet, the transition may happen quickly after the announcement—so it’s smart to prepare early.
A good practice is reviewing your contract terms to check whether the VAT clause allows for rate changes. That will save time and reduce disputes with customers when the rate increase does come along.
So stay prepared, and always include a VAT adjustment clause in contracts 📄. That way, you’re ready no matter when the new rate takes effect.
If you’re running a PT PMA in Bali or anywhere in Indonesia, VAT isn’t just a percentage — it’s part of every invoice you issue and report. Changing the VAT rate affects not only the sales price but also how you report every transaction to the government 💻.
When the VAT rate changes, your invoicing templates, accounting software, and even your product pricing all need to be updated. Businesses using manual spreadsheets often make mistakes during transitions. That’s why cloud systems like Xero, Jurnal, or Mekari offer automatic VAT rate updates to prevent double work and admin stress.
But don’t forget: If you’re still issuing invoices at 11% after the rate jumps to 12%, the tax office will expect you to correct and refile those invoices — and possibly pay a penalty 😓. It’s much wiser to switch your invoicing settings ahead of time and train your teams early.
By preparing now, you won’t be stuck revising hundreds of invoices later.
When talking about VAT, you always want the best source of truth: the Directorate General of Taxes, which issues tax regulations and implementation notes for taxable entrepreneurs. They are the authority responsible for explaining how and when VAT changes affect tax invoices, e-Faktur reporting, and accounting adjustments ✅.
Regular updates often come in the form of circular letters, press releases, or official PMK regulations. It’s essential to review these documents rather than relying on blogs or social media posts — which may be outdated or lack legal clarity.
Subscribing to their website or joining tax briefings helps PT PMA finance teams confirm the current rules right away. That way, you’re always prepared for rate adjustments or technical updates inside systems like Coretax or DJP Online 🔁.
Trust in the official source — that’s how professionals stay audit-safe and compliant.
With a VAT rate increase looming, preparation is everything. Here are some smart steps taxable entrepreneurs can follow:
- Review your accounting system for rate flexibility
- Update contract terms to include tax adjustment clauses
- Train staff who handle invoicing and reporting
- Watch official government news sources regularly
- Budget for VAT-related financial impacts
These steps keep your business ready and shock-free once the new VAT rate takes effect. You’re not just waiting — you’re planning.
VAT changes are normal parts of government revenue strategy 💰. Businesses that plan well won’t face delays, penalties, or unexpected back payments.
Whether you’re using cloud accounting software or a custom invoicing tool, there’s a quick way to check if your system uses the current VAT settings:
✅ Go into your tax or invoice setup
✅ Look at the VAT percentage for standard sales
✅ Review any custom tax rules or overrides
Many software platforms update VAT rates automatically after announcements, but not all do — especially if your platform is self-hosted or customized. It’s also smart to run a sample invoice and confirm that the VAT matches the current percentage.
Remember: The tax office doesn’t accept “software error” as a defense. Your PT PMA or business is always responsible for correct filing 🧾.
Meet Alex, a 32-year-old tech founder from Australia with a PT PMA based in Canggu. He’d been using the 11% VAT rate for months when his accountant noticed rumors about a coming increase. Instead of waiting, Alex checked the official tax announcements, confirmed the trend, and immediately prepared his team.
✅ His accounting system was updated
✅ His contracts were revised with new tax clauses
✅ His staff was told to expect a rate increase soon
Two months later, the tax office confirmed an upcoming rate change. Alex was ready. Unlike many other startups in Bali, he didn’t need to update old invoices, revise sales price sheets, or explain sudden cost changes to customers. He simply stayed ahead by being informed and proactive.
That smart move protected his business reputation, saved time, and avoided audit issues. His lesson? Always stay a few steps ahead when it comes to tax rules.
Planning early is cheaper than fixing later.
The best place to find VAT updates is the Directorate General of Taxes website, where every official regulation, explanation, and technical update is shared. You can also search through press releases from the Ministry of Finance, which sometimes announces policy changes before they become law.
For businesses that want simpler updates, signing up for tax newsletters, following official channels, or joining tax-focused communities on LinkedIn can help you stay informed. But don’t rely on rumors or informal advice — VAT impacts your legal compliance and cash flow.
Take charge of staying updated. It’s easier than cleaning up tax errors later 🧠.
Yes, unless the government officially announces a new rate.
Yes. You must reflect the new rate in every invoice and report.
You can be penalized and may need to revise old invoices.
Yes, exports are still subject to 0% VAT under special rules.
Check the official tax website or consult a licensed tax agent.
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