Indonesia: New VAT regulations for 2025 under PMK 131/2024
On December 31, 2024, the Indonesian government introduced Regulation of the Minister of Finance Number 131 of 2024 (PMK 131/2024), which further outlines the adjustments to the application of Value Added Tax (VAT) provisions. This regulation, effective January 1, 2025, specifies VAT treatment for the import and delivery of taxable goods and services within the customs area.
Key updates from PMK 131/2024
- VAT rate for luxury goods
The VAT rate applicable to luxury items stays at 12%. However, this applies only to goods classified as luxury under the Sales Tax on Luxury Goods (PPnBM), which includes certain motor vehicles, luxury residences, airplanes, and cruise ships. Article 2, paragraph (2) of PMK 131/2024 confirms the 12% VAT rate for these items. For transactions involving final consumers, the 12% rate will be effective from February 1, 2025.
- Effective VAT rate of 11% for non-luxury goods
For goods not classified as luxury, the VAT rate of 12% will be calculated by multiplying the applicable rate by a value factor of 11/12. This adjustment results in an effective VAT rate of 11%. This rate applies to non-luxury goods and is in line with maintaining the same VAT burden for these items as before.
- Use of “other values” mechanism
To prevent widespread public impact, the government introduced a mechanism where VAT is calculated based on “other values,” such as selling prices or replacement values, as outlined in the VAT Law and the law concerning the harmonization of tax regulations (HPP Law). This adjustment is permitted under Articles 8A and 16G of the VAT Law and aims to balance the VAT impact on the general public without requiring new legislative changes.
Source: pajak.go.id
VAT/GST rates 2024 in Asia
| Country | Standard VAT/GST Rate | Reduced Rates |
| Armenia | The standard VAT rate is 20%. | |
| Azerbaijan | The standard VAT rate is 18%. | |
| Bahrain | From January 1, 2022, the standard VAT rate is 10%. | |
| Bangladesh | The standard VAT rate is 15%. | 10%, 7.5%, 5%, 2,4%, 2% |
| Brunei | There is no VAT in Brunei. | |
| China | The standard VAT rate is 13%, 9%, 6% | Reduced rates of 5%, 2%, 3%, 1.5% and 0.5%. |
| UAE | VAT is charged at 5% in the United Arab Emirates (UAE) | |
| Georgia | The standard VAT rate is 18% | |
| Hong Kong | There is no VAT or sales tax in Hong Kong. | |
| India | The primary rates of Indian GST are 0.25%, 1.5%, 3%, 5%, 12%, 18% and 28% | |
| Indonesia | The standard VAT rate is 11% | |
| Iraq | There is no VAT in Iraq. (The standard sales tax ranges from 10% to 300% on alcohol & tobacco) | |
| Israel | The standard VAT rate is 17% | |
| Japan | The standard (Consumption Tax) rate is 10% | 8% |
| Kazakhstan | The standard rate of VAT is 12% | |
| South Korea | The standard VAT rate is 10% | |
| Kuwait | There is no VAT in Kuwait | |
| Laos | The standard VAT rate is 10% | |
| Lebanon | The standard VAT rate is 11% | |
| Malaysia | On September 1, 2018, the Government of Malaysia replaced the Goods and Services Tax (GST) with a 10% Sales Tax (The standard rate of service tax is 8%) | 5% (Sales Tax), 6% |
| Oman | the standard VAT rate in Oman is 5% | |
| Pakistan | Pakistan does not have VAT. The standard sales tax rate is 18% | Pakistan has a large number of reduced sales tax rates, including 1%, 2%, 5%, 10% and 12% (among others). |
| Philippines | The standard VAT rate is 12% | |
| Qatar | There is no VAT in Qatar | |
| Russia | The standard VAT rate is 20% | 10% |
| Saudi Arabia | VAT is charged at 15% | |
| Singapore | The standard Goods and Services Tax (GST) rate is 9% | |
| Sri Lanka | The standard VAT rate is 18% | |
| Taiwan | The standard VAT rate is 5% | |
| Tajikistan | The standard VAT rate is 14% | 10%, 7%, 5% |
| Thailand | The standard VAT rate is 7% (Reduced from the standard 10% until 30 September 2024) | |
| Turkey | The standard VAT rate is 20% | 10%, 1% |
| Uzbekistan | The standard VAT rate is 12% | |
| Vietnam | The standard VAT rate is 8% | Reduced VAT rate is 5% |