Regulatory updates - Indonesia

In January 2025, Indonesia’s Directorate General of Taxes (DJP) launched the Coretax system, a centralized platform for VAT reporting and e-invoice clearance.

Under the new rules, all VAT-registered taxpayers (PKP) must issue invoices electronically and submit them for clearance through the DJP systems.

Most businesses will use the Coretax portal, while only large taxpayers (issuing 10,000 or more invoices per month) may continue using e-Faktur Desktop or Host-to-Host (H2H) channels.

Scope of e-invoicing

The e-invoicing mandate applies to all VAT-registered taxpayers (PKP), including businesses with annual turnover above IDR 4.8 billion and qualifying non-resident digital service providers.

The system covers:

• Domestic B2B and B2G transactions;
• Export transactions (zero-rated VAT);
• Rectification documents (credit notes, debit notes, replacement invoices, cancellation notes).

Paper invoices are only permitted in force majeure situations, such as system downtime, and must be uploaded later for clearance.

Timeline

Indonesia’s e-invoicing journey began with the rollout of e-Faktur for PKP between 2014 and 2016, followed by version upgrades in 2020 and 2024. The Coretax system went live in January 2025, centralizing VAT reporting and invoice clearance.

By December 31, 2025, Coretax will be fully enforced for all taxpayers except large PKP using H2H or Desktop channels.

Document issuance and distribution

All invoices must be generated in XML format and uploaded to Coretax for clearance. Once approved, DJP assigns a QR code, and the Tax Invoice Serial Number (NSFP) is auto-generated by Coretax. Cleared invoices are distributed electronically as PDFs with QR codes, allowing buyers to validate authenticity by scanning the QR code or checking via the DJP portal.

Penalties for non-compliance

Invoices uploaded after the 20th of the following month are invalid for VAT credit. Failure to issue e-Faktur/Coretax invoices means VAT cannot be credited, and administrative fines apply. Late VAT return filing incurs a penalty of IDR 500,000 per return. Incorrect VAT reporting or fraud can result in penalties up to 100% of underpaid VAT and potential criminal charges.

The Indonesian president signed the Harmonisation of Tax Regulations Bill (HPP, Harmonisasi Peraturan Perpajakan) on 29 October, which was previously passed by the House of Representatives (DPR).

According to the HPP, the current 10% VAT will increase to 11% from 1 April 2022 and 12% after 1 January 2025.

The Tax reforms are aimed at optimising the state revenue to support national development and accelerate economic recovery from the pandemic.