Indonesia VAT

Frequently asked questions about Indonesia VAT

What is VAT?

VAT is the abbreviation of Value Added Tax. VAT applies to the supply of goods and services. As VAT is a consumption tax, it is generally added to the transaction price and ultimately borne by the end consumer. The rate of VAT for the supplies made by Zoom to customers in Indonesia (i.e., digital services) is currently 11%.

Who must pay VAT?

Generally, VAT is collected by the business operator who supplies goods or services to its customers. The VAT is invoiced by the supplier along with the transaction price and collected from the customer. Subsequently, the supplier remits the collected VAT to the government.

Under Indonesian tax law, an overseas service provider who provides intangible goods or services through an e-commerce system is required to charge VAT on its supply to Indonesian customers.

Note: For customers who are registered for VAT in Indonesia the VAT charged by Zoom may be creditable as input VAT. The right to input VAT deduction is subject to the VAT regulations in Indonesia. However, from a compliance perspective the invoice must state the customer’s valid tax identification number, full registered name, and email address (optional), which is registered with the ITO in order to be considered as a valid document to support input VAT deduction. As such, if you are VAT registered, it’s important that you have included these details in your Zoom account. Please refer to the How do I enter my tax identification number? section for further details.

Where does VAT apply?

VAT generally applies to all taxable supplies of goods and services made by Zoom to customers in Indonesia.

How is Zoom determining which customers VAT applies to?

Zoom will apply VAT if the “Sold To” contact address entered by the customer is in Indonesia. This information will then be cross-referenced against other data to verify that the ‘Sold To’ address is accurate.

It is your responsibility as a customer to ensure that your ‘Sold To’ address is accurate.

What is a tax identification number?

A tax identification number is a unique 15-digit number (XX.XXX.XXX.X-XXX.XXX) granted by the Indonesian tax authorities upon the business registration for VAT and other taxes. The tax identification number generally appears on the Tax Registration Certificate issued by the Indonesian tax authorities.

Why did I get a notification email if I am not located in Indonesia?

In order to ensure complete and thorough notification to any of our customers who may be impacted, we sent the notification communication to all customers who had a “Bill To” OR “Sold To” address in Indonesia.

Why is Zoom charging VAT on invoices as of October 1, 2020?

Like many companies with a growing international presence, Zoom is routinely evaluating its indirect tax collection and remittance obligations. The application of these taxes to businesses with online activities is a complex and evolving area. Zoom continues to review such developments, as well as the nature and extent of its activities in different jurisdictions and based on such regular review will from time to time start charging indirect taxes (in this case is VAT) where applicable. Furthermore, Zoom was notified by the Indonesian Tax Office (“ITO”) that Zoom should collect VAT on its supplies to customers in Indonesia.

Will Zoom send me an electronic invoice (e-Faktur Pajak)?

As Zoom is an overseas service provider registered for VAT under a simplified registration, Zoom is not currently required to provide an electronic invoice. In line with the current regulations, Zoom provides a VAT receipt in the form of an invoice.

Is there a minimum threshold purchase amount before VAT is applied?

No, VAT applies to the sale of all Zoom’s services in Indonesia.

What exemptions are available and how does a customer notify Zoom?

There are currently no exemptions available in Indonesia. VAT will be charged on all sales of Zoom’s services in Indonesia.

Are there any special exemptions applicable for government entities and charities under which VAT may not be charged?

There are currently no special exemptions available for government entities and charities in Indonesia.

How do I enter my tax identification number?

If you are a registered taxable entrepreneur, to enter the tax identification number, follow the steps below depending on where your billing portal is located in the left navigation menu of the Zoom web portal. Not sure how to identify where your billing portal is located? Learn how to locate your billing settings.

You are required to notify us if there is a change in your VAT registration status.

  1. Sign in to the Zoom web portal.
  2. In the navigation menu, click Plans and Billing then Billing Management.
  3. In the Contact Information section, click Edit.
  4. Enter your VAT.
  5. Click Save.
  1. Sign in to the Zoom web portal.
  2. In the navigation menu, click Account Management then Billing.
  3. Click the Billing Information tab.
  4. To the right of Sold To Contact, click Edit.
  5. Enter your VAT
  6. Click Save Changes.

Are there any VAT obligations for me as a customer?

If you are a registered taxable entrepreneur, you may be entitled to claim the VAT charged by Zoom as an input tax credit. You will need to assess this based on the applicable VAT laws and regulations and report it in your VAT return.

What if I am a registered taxable entrepreneur and forget to enter my tax identification number?

Based on the regulations, the VAT charged by Zoom may only be claimed as input VAT if a valid tax identification number, full registered name, and the email address (optional) which is registered with the ITO of the customer are stated in the invoice. Hence, please immediately enter your tax identification number, and contact us by chatting with Billing within 30 days of the invoice issuance date to request an updated invoice.