If you are a foreign tourist and want to shop around the country, it is good news that the Indonesian government has provided a facility for tax refund. As there are many stores to explore, and they offer you good stuff that you haven’t found in your home country, or you just want to shop around the country.
Additionally, in an effort to encourage tourist spending and empower small and medium enterprises (SMEs), the government had revised a regulation related to Value Added Tax (VAT) that would allow foreign tourists to get a tax refund for their spending. It is also boosting the Indonesian tourism amongst international travellers.
The Finance Ministry’s director general for taxation, Robert Pakpahan, said the new regulation would allow foreign tourists to apply for VAT refund with multiple invoices, as long as the total value of the VAT is a minimum of Rp500.000 (US$36). The invoices could have different purchase dates.
The implementation of this regulation, foreign tourists are now able to collect their purchase receipts with a minimum value of Rp500.000 each from several days and various stores, and if the total transaction amount has reached Rp5 million, they can ask for a VAT refund.
According to Jakarta Post, last August 2019, 55 corporate taxpayers (PKP) which own 501 retail stores, were participating in the refund scheme, tax office data revealed. The flowing of tourists visiting Indonesia had affected the amount of VAT refunds. Tax office had refunded Rp11.2 billion in VAT to tourists in 2019. Meanwhile, during that time, Indonesia welcomed 15.8 million international tourists.
It was an increase from Rp6.4 billion in VAT refunds that recorded in 2017, when the country welcomed 14.03 million foreign tourists.
With this new regulation, now your visit to Indonesia can be more enjoyable. You can do a tax refund for purchase goods in any shop (retailer) with VAT Refund for Tourists logo.
You may ask yourself, what is VAT Refund for Tourists? Or who is eligible to get VAT refund? However, it is a facility given by the Indonesian government which allows foreign tourists to claim back Value Added Tax (VAT) on goods purchased in any store registered as a “VAT Refund for Tourist” participant.
VAT Refund can be claimed by a foreign passport holder, who lives or stays in Indonesia no longer than 2 months since their arrival in Indonesia. You cannot claim it, if you are a cabin crew, Indonesian citizen, and Permanent Resident of Indonesia.
After knowing the regulation and requirement, you may ask yourself how and where to claim the refund. Don’t worry, we will give you guidance that you need to know!
How To Claim The Tax Refund?
1. Accompanied Baggage (Goods)
To be eligible for the tax refund:
- You must purchase goods from shops with “Tax Refund for Tourists” logo across Indonesia and don’t forget to show your passport. You also must have a valid tax invoice (a tax invoice attached with one payment receipt) from the shop.
- Minimum Tax payment is Rp50.000 per transaction and the sum of tax from several receipts should comply with a minimum of Rp500.000.
- Goods are purchased within 1 month before departing Indonesia.
- Goods must be carried out of Indonesia as accompanied baggage within 1 month of the date of purchase.
2. VAT Refund Payment Options
VAT refund can be given in cash or by transfer payment
a. Given in cash with Indonesian Rupiah (IDR) currency.
VAT refund is given in cash, only if the amount does not exceed Rp5.000.000.
b. Through transfer payment
When the VAT refund is in excess of Rp5.000.000, the refund will be made by transfer. The foreign tourist should provide a bank account number, account name, address, bank routing number, designated bank for the transfer and requested currency for the VAT refund. The transfer will be done within 1 month of receipt of the application for VAT refund.
c. Exceptional circumstances
If the amount of VAT refund is more than Rp5.000.000, however, the foreign tourist does not want to be refunded by transfer, then the amount of Rp5.000.000 will be refunded in cash, and the balance of VAT is not refundable.
d. Claim procedure
The VAT refund can only be claimed at the airport on the date of your departure and you must follow these steps below.
Option 1: Claim VAT Refund before Check-In counter
- Submit the application for VAT refund to the Directorate General of Taxes (DGT) officer at the airport.
- Submit both copies of the original valid tax invoice. A tax invoice must be attached with one payment receipt.
- Show your passport, airline ticket, and goods purchased.
- Receive VAT refund in cash or through transfer to your bank account.
Option 2: Claim VAT Refund after Check-In counter
The same steps are applied for this option. However, instead of showing an airline ticket, you need to show your international boarding pass to the DGT officer.
This option is applied for the passenger who carries on their purchased goods as hand baggage. If the goods are oversized or aviation security measures prevent you from taking your goods on board the aircraft, then you have to claim your VAT refund at VAT Refund counter before Check-In counter as stated on option number 1.
The claims procedure is easy if you have enough time to complete the steps. However, you need to allow enough time on the day of your departure, to ensure the claims process is going smoothly. It is better to prepare the receipts before your arrival at the airport, so you can claim it as soon as you reach the VAT Refund counter.
3. Where Are The Tax Refund Counters Located?
Tax refund counters are located in selected Indonesian International Airports. They are available at Soekarno-Hatta Airport (Jakarta), Ngurah Rai Airport (Bali), Adisutjipto Airport (Yogyakarta), Juanda Airport (Surabaya), and Kualanamu Airport (Medan).
The claims procedure is uncomplicated, you can now enjoy more travelling and exploring in Indonesia, and visit stores as much as you want. Remember, the stores that have VAT Refund are the ones with the “VAT Refund for Tourists” logo. Please enjoy your shopping while you can pay less and get the best. If you need any help, you can contact us anytime.