The DGT clarified the application of the VAT collection exemption for the first IDR 500 million of annual turnover in an article dated 29 September 2026. This provision, rooted in PMK-55/2026 and the Harmonized Tax Law (UU HPP), grants relief to micro and small enterprises (UMKM) by exempting them from the obligation to collect VAT on taxable deliveries until their cumulative turnover exceeds the threshold. The guidance details the calculation methodology, monitoring mechanisms via Coretax, and the transition to standard VAT collection upon threshold breach.
Key Takeaways
- Threshold Mechanics: The IDR 500 million threshold is calculated on a cumulative annual basis (January-December). Once exceeded, the taxpayer becomes a VAT collector (PKP) prospectively from the following month.
- Voluntary PKP Registration: Taxpayers below the threshold may voluntarily register as PKP to claim input VAT credits, a strategic decision for businesses with significant capital expenditures.
- Coretax Monitoring: The system automatically tracks turnover through e-invoice (e-Faktur) data. Taxpayers receive automated notifications when approaching 80% of the threshold, ensuring timely compliance preparation.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement