For those dealing with taxes in Indonesia, understanding the tax refund system is essential. Whether you’re a tourist looking to get a VAT refund on your shopping or a business seeking a refund on overpaid taxes, this guide breaks it down in a simple and straightforward manner.
Also read: Indonesia Travel and Entry Requirements 2025: Complete Guide
Tax Refund for Tourists in Indonesia
Foreign tourists visiting Indonesia have the opportunity to claim a refund on Value-Added Tax (VAT) for goods purchased from registered retailers. This initiative by the Indonesian government aims to boost shopping tourism, making Indonesia a more attractive destination for international visitors.
Who is Eligible?
- Foreign passport holders who are not Indonesian citizens or permanent residents.
- Tourists who stay in Indonesia for no longer than 60 days from the date of arrival.
- The tax refund applies only to goods purchased from retailers with the “Tax Refund for Tourists” logo.
Requirements for a Tax Refund
To successfully claim a tax refund, tourists must meet the following requirements:
- Goods must be purchased within one month before departure.
- A valid tax invoice (attached to a payment receipt) must be provided.
- A minimum tax amount of Rp50,000 per transaction is required, and the total tax refund must be at least Rp500,000.
- Goods must be carried as accompanied baggage when departing Indonesia.
Also read: Indonesia Customs Declaration Guide for Foreign Tourists
How to Claim Your Tax Refund at the Airport
To ensure a smooth tax refund process, follow these steps:
- Visit the Tax Refund counter at the airport on your departure date.
- Submit your original valid tax invoice to the Directorate General of Taxes (DGT) officer.
- Show your passport, boarding pass, and purchased goods.
- Receive your refund in cash (if under Rp5,000,000) or by bank transfer (for refunds exceeding Rp5,000,000). Transfers are completed within one month of application.
Exceptions and Special Conditions
Certain conditions apply to the tax refund process, including:
- If your refund exceeds Rp5,000,000, the amount will be transferred to your bank account.
- If you refuse a transfer, only Rp5,000,000 will be refunded in cash, and the remaining balance will not be refunded.
- If the goods are shipped via a carrier, they are not eligible for a tax refund.
Also read: Indonesia Tax Rate for Foreigners: What You Need to Know
Tax Refund for Businesses in Indonesia
Businesses operating in Indonesia may also be eligible for tax refunds under certain circumstances. These refunds apply to overpaid taxes, including income tax, VAT, and sales tax on luxury goods. Understanding the process and eligibility criteria can help businesses recover excess payments efficiently.
Types of Tax Refunds for Businesses
Businesses can apply for different types of tax refunds depending on their tax situation:
Non-Payable Tax Overpayment Refund
- Occurs when a taxpayer pays tax that should not be payable.
- Refund claims must be submitted in writing with supporting documents, including a tax payment slip and a calculation of non-payable tax.
- Claims can be submitted via Tax Office (KPP), by post, or through courier services.
Income Tax, VAT, and Sales Tax on Luxury Goods Overpayment Refund
If the amount paid exceeds the tax liability, businesses can request a refund via their Annual Income Tax Return or Periodic VAT Return.
There is an option to request an Advance Refund, which is processed faster but may be subject to further audits.
Import Tax Overpayment Refund
If import duties and taxes were overpaid, businesses can claim a refund by submitting supporting documents, including customs payment slips and notices of customs value reassessment.
Also read: Indonesia’s CoreTax System: A Digital Transformation in Tax Administration
Processing Time for Business Tax Refunds
The tax refund process for businesses varies in duration, depending on the type of refund requested:
- Refunds are issued within one month of the approval of the tax overpayment claim.
- If an audit is required, the process can take up to 12 months.
For tourists, the Indonesia tax refund system provides a way to reclaim VAT on eligible purchases, making shopping more affordable. Meanwhile, businesses can recover overpaid taxes by following the proper procedures.
Also read: Tax Incentives in Indonesia: Key Benefits and Opportunities
To ensure a smooth process, always keep detailed records, tax invoices, and supporting documents.
If in doubt, visit the official Directorate General of Taxes website or consult with 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
Contact us now for FREE consultation and special package!
FAQ About Tax Refund in Indonesia for Tourists and Businesses
Who is eligible for a VAT tax refund as a tourist in Indonesia?
Foreign passport holders who are not Indonesian citizens or permanent residents, who have stayed in Indonesia no longer than 60 days, and who purchased goods from retailers displaying the “Tax Refund for Tourists” logo are generally eligible for a VAT refund, provided other conditions (see requirements) are met.
What documents and purchase conditions are required to claim a tourist tax refund?
You must present the original valid tax invoices (attached to receipts), your passport, boarding pass, and the purchased goods as accompanied baggage. Purchases must be made within one month before departure, each transaction must include at least Rp50,000 VAT, and the total refundable VAT should meet the minimum threshold (e.g., Rp500,000).
How do I claim my tax refund at the airport and when is the refund paid in cash vs bank transfer?
On departure, visit the Tax Refund counter at the airport, submit original tax invoices and show goods, passport, and boarding pass to the DGT officer. Refunds under Rp5,000,000 are typically paid in cash at the counter; amounts above Rp5,000,000 are paid by bank transfer (completed within about one month).
What types of tax refunds can businesses claim and how are they submitted?
Businesses may claim refunds for non-payable tax overpayments, excess payments of income tax, VAT, or sales tax on luxury goods, and import tax overpayments. Claims require supporting documents (payment slips, calculations, customs documents) and can be submitted to the local Tax Office (KPP) or by post/courier, or via the relevant tax return procedures.
How long does a business tax refund take and what can delay the process?
If approved without further review, refunds are typically issued within one month of approval. However, if the tax office requires an audit or additional verification, the process can extend up to 12 months. Complete documentation and timely responses to tax office requests help avoid delays.
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