E-invoicing requirements in Indonesia
After experiencing challenges in its tax control system, Indonesia adopted an e invoicing system locally known as e Faktur Pajak. Leveraging data reported in real-time via continuous transaction controls (CTCs) allows the Indonesian tax authorities to reduce occurrences of fraud whilst helping to close the tax gap.
Introduced in 2014 and effective from 2016, Indonesia’s e invoicing system seeks to combat the tax gap. Indonesia’s solution was the implementation of an invoice clearance system, where invoices must be approved by the local tax authority prior to being sent to a customer.
E-invoicing is mandatory for all corporate VAT taxpayers. It’s compulsory for all invoices to be processed and issued electronically through the government’s official system, eFaktur.
Also known as tax invoices, e-invoices in Indonesia are typically issued for:
- Delivery of taxable goods (Barang Kena Pajak)
- Rendering of taxable services (Jasa Kena Pajak)
- Advance payment of taxable goods or services
eFaktur e-invoices should be created by applications approved by Indonesia’s Director of Taxation (DGT). Options include client desktop, web-based and host-to-host applications. Electronic invoices need to be secured using an electronic signature, and taxpayers need electronic certificates to verify their identity—the latter need to be renewed every two years. Validated invoices receive a QR code from the DGT as proof of authenticity.
It’s worth noting that the VAT return submission has been integrated with eFaktur, and VAT returns are typically required to be submitted monthly via the platform.
