Restaurant Tax in Indonesia: A Guide for F&B Businesses

Restaurant Tax in Indonesia: A Guide for F&B Businesses

This article was written with the assistance of Artificial Intelligence (AI) and went through a manual review process by the InvestinAsia team before publication.

If you’re a foreign entrepreneur planning to open a restaurant in Indonesia, understanding the restaurant tax system is crucial for compliance and smooth operations.

Indonesia’s taxation structure for restaurants is distinct, with regional regulations governing taxes like the Restaurant Tax and Service Charges.

Let’s break this down in an easy-to-understand manner.

What is Restaurant Tax in Indonesia?

Restaurant Tax in Indonesia
Restaurant Tax in Indonesia (pexels.com)

Restaurant tax, officially termed Taxes on Certain Goods and Services (PBJT) under Law No. 1 of 2022, is levied on food and beverage services provided by restaurants, including cafeterias, bars, catering, and roadside stalls.

This tax is collected at the district/city level, distinguishing it from Value-Added Tax (VAT), which is managed by the central government.

Key Features:

  1. Tax Rate: Maximum of 10% of the total bill, as stipulated by local regulations.
  2. Tax Base: The tax is calculated on the total payment made by consumers for food and beverages, excluding restaurants earning less than IDR 200 million annually (specific thresholds vary by region).
  3. Exemptions: Self-service shops, food factories, and airport lounges are typically excluded.

Also read: Indonesia Tax Rate for Foreigners: What You Need to Know

How to Calculate Restaurant Tax?

The calculation is straightforward:

Restaurant Tax = Total Bill × Tax Rate

For instance:

  • Total Bill: IDR 1,000,000
  • Tax Rate: 10%
  • Restaurant Tax: IDR 1,000,000 × 10% = IDR 100,000

This tax is directly listed on the customer’s receipt.

What is the Difference Between Restaurant Tax and Service Charge?

  • Restaurant Tax: A government-mandated tax collected by the restaurant on behalf of the local government.
  • Service Charge: An additional fee set by the restaurant (usually 5–10%), often used to compensate staff and improve service quality. It is not a tax but part of the restaurant’s income.

For example, if a restaurant in Jakarta applies a 10% restaurant tax and an 8% service charge, the total cost for a meal priced at IDR 200,000 would be:

Total Cost = 200,000 + (10% × 200,000) + (8% × 200,000) = IDR236,000

Also read: Food and Beverage Industry in Indonesia: Outlook and Opportunities

Tax Compliance Tips for Restaurant Owners

Restaurant Tax in Indonesia (pexels.com)
Restaurant Tax in Indonesia (pexels.com)
  1. Register Your Business Properly: Ensure your restaurant is registered as a legal entity and complies with local and central government regulations.
  2. Understand Regional Tax Rules: Each region in Indonesia may have different thresholds and rates for restaurant tax. Collaborate with local consultants for accurate compliance.
  3. Automate Tax Calculations: Use reliable point-of-sale (POS) systems that automatically calculate taxes and generate compliant receipts.
  4. Stay Updated on Tax Laws: Tax regulations in Indonesia evolve. Regularly consult with tax advisors or legal experts to stay informed.
  5. Train Your Staff: Educate your team about tax components on bills to avoid customer confusion.
  6. Leverage Professional Help: Partner with firms offering accounting and tax services to ensure proper filing and timely payments.

Navigating Indonesia’s tax landscape might seem daunting, but with proper knowledge and assistance, compliance can be straightforward. Taxes like PBJT are integral to running a restaurant in Indonesia and contribute to the local economy. By adhering to these regulations, you can establish a thriving, legally compliant business.

Also read: Tax Avoidance in Indonesia: What Foreigners Need to Know

Rely on InvestinAsia’s tax consultants to take care of your taxes

Navigating Indonesia’s tax regulations may seem complicated, but understanding the basics can save you time and money.

Hence, partnering with reputable consultants like InvestinAsia’s Indonesia tax consultant and compliance services can simplify your tax management and ensure full compliance with Indonesian tax laws.

Our experienced team of professionals is ready to assist you in every tax matter, such as:

Contact us now for FREE consultation and special package!

 

 

References:

Contact Us

if you are ready to start your life in indonesia or to think of discusing other options.

Tax Calculator
Calculate income tax PPh 21, 23, 4 paragraph (2), and VAT

Talk to Our Consultants

Related Posts