If you’re planning to visit or do business in Bali, you might be wondering: Is there sales tax in Bali? The short answer is no—Bali doesn’t have a separate local sales tax, but purchases are subject to Indonesia’s national Value-Added Tax (VAT).
This guide will outline how sales tax works in Bali and its implications.
Also read; Indonesia’s PPN (VAT) Guide: 2025 Regulation, Rates, Calculation
Understanding Bali’s Sales Tax System
VAT in Bali: The National Sales Tax Equivalent
Indonesia applies a national Value-Added Tax (VAT) instead of a traditional sales tax. VAT is an indirect tax levied on most goods and services, including those purchased in Bali. Under Finance Ministry Regulation (PMK) No. 131/2024, the standard VAT rate is 12%, but the government has structured the tax to ensure an effective rate of 11% for most goods and services.
- Standard VAT Rate: 12% (formal rate)
- Effective VAT Rate: 11% (applies to general goods and services)
- Luxury Goods VAT Rate: 12% (applicable to high-end products)
Luxury Goods Taxation (LGST) in Bali
If you’re shopping for luxury goods such as designer items, high-end electronics, or premium real estate, you may be subject to an additional tax known as Luxury Goods Sales Tax (LGST). The rate varies depending on the category of goods, as outlined in Government Regulations No. 73/2019 and No. 61/2020.
Key Impacts of LGST in Bali:
- Luxury cars, jewelry, and yachts are taxed at higher rates.
- LGST is designed to target discretionary spending while maintaining consumer tax fairness.
- The luxury sector in Indonesia saw 15.3% growth in 2023, despite higher taxation, showing that demand for premium goods remains strong (Ministry of Finance, 2024).
Also read: Bali Tourist Tax Regulations 2025: Complete Guide
Do Tourists Get a Bali Sales Tax Refund?
Yes! If you’re a foreign tourist shopping in Bali, you might be eligible for a VAT refund under Indonesia’s Tourist Tax Refund Scheme. This applies to purchases made at registered stores displaying the “Tax Refund for Tourists” logo.
For more details, check our guide for Bali tax refund.
Tax Considerations for Businesses in Bali
If you’re planning to open a business in Bali, VAT compliance is essential. Taxable entrepreneurs (businesses registered for VAT) must:
- Collect VAT on sales of taxable goods and services.
- Submit periodic VAT reports to the Directorate General of Taxes.
- Comply with import duty regulations for goods brought into Bali.
Foreign investors should also be aware of import duties and VAT exemptions that may apply under specific conditions, particularly in Free Trade Zones (FTZs).
Final Thoughts: What Does This Mean for You?
- For tourists, there’s no local Bali sales tax, but VAT applies. If you shop for luxury goods, expect to pay a higher rate.
- For businesses, VAT compliance is key. Ensure proper tax registration and reporting to avoid penalties.
- For investors, Indonesia’s tax structure, including VAT exemptions and incentives, may impact your cost calculations.
Also read; Is Bali a Tax Haven for Foreigners?
Understanding Bali’s tax system helps you make informed decisions, whether you’re visiting, shopping, or investing. Need official guidance? Always refer to Indonesia’s Ministry of Finance or consult a tax professional.
For those of you who need help with taxation in Bali and Indonesia, you can rely to InvestinAsia’s Indonesia tax consultant and compliance services.
Our experienced team of professionals is ready to assist you in every tax matter, such as:
- Accounting and tax reporting services in Indonesia
- Indonesia Payroll Service
- Indonesia LKPM Reporting Service
- Indonesia VAT Taxpayers Registration
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