Indonesia

Implementation of mandatory e-invoicing in Indonesia

• In 2014, the government launched the e-Faktur system. All VAT-registered businesses must issue electronic invoices using government-approved software.
• Since 2022, the system has transitioned to e-Faktur 3.0, which allows online submission, real-time validation, and simplified tax credit tracking. The rollout has gradually expanded to medium and small enterprises.

Who needs e-invoices in Indonesia?

• VAT-Registered Businesses (PKP): Required for all taxable supplies.
• Exporters: Must issue e-invoices for cross-border transactions to ensure VAT compliance.
• Non-Resident Businesses: Required if VAT-registered for transactions within Indonesia.

E-Invoicing vs. E-Billing

Key features of Indonesia’s e-invoicing System

• Submission Platform: Invoices must be submitted via e-Faktur in XML format.
• Validation: DGT ensures compliance with tax regulations and assigns a unique invoice code.
• Archiving: E-invoices must be stored electronically for 10 years under Indonesian tax laws.

E-invoicing dataset

•  Buyer/Seller IDs: NPWP (Taxpayer Identification Number).
• Invoice Details: Number, date, and payment terms.
• Goods and Services: Descriptions, quantities, unit prices, and VAT details.
• Taxes: Applicable VAT rates and amounts.
• Transaction Info: Total payable amount, currency, and payment method.
• Digital Signature: Ensures authenticity and data integrity.

E-invoicing across transaction types

• Mandatory for VAT compliance and record-keeping.
• Facilitates cross-border transactions and VAT refunds.

• Not yet mandatory but encouraged to improve transparency and process optimization.

• Required for transactions with government entities to ensure compliance and transparency.

Penalties for non-compliance

• Fines: IDR 500,000–5,000,000 (€30–€300) per violation.
• Operational Challenges: Rejected invoices may disrupt payments and operations.
• Legal Risks: Increased audits and reputational damage for repeated violations.