VAT refund in Indonesia: A complete guide to tax-free shopping in Indonesia for tourists

Looking to escape the cold and damp weather of the UK? Consider Indonesia for your next adventure! This country has so much to offer - breathtaking views of nature, diverse culture, pleasant tropical climate, amazing cuisine, and some of the friendliest people on earth! It's no wonder that many Brits fall in love with this vibrant country and choose to return, despite the long journey.

Whether you’re planning a short getaway or considering a longer stay with the Bali Digital Nomad Visa, your time in Indonesia will come with a price tag. While the cost of living is significantly lower than in the UK, you'll still encounter up to 11% VAT on many purchases. The good news is you can offset these costs with a VAT refund before you leave Indonesia.

This article will provide you with a complete guide to get your VAT refund in Indonesia, helping you make your vacation here way more affordable. So while heading off to Indonesia, keep this article handy as your ultimate guide for a budget-friendly and unforgettable vacation in Indonesia!

There is one more way to save even more money, use a Wise debit card to receive your refund! More on that later!

How much is VAT in Indonesia?

The VAT system in Indonesia is rather straightforward, with one general rate of 11%. Additionally, you may also be exempt from VAT on certain goods and services.

If you are still unsure about the tax rate applied to your purchase, refer to the table below for a quick check¹:

How much VAT is refunded in Indonesia?

The general VAT rate in Indonesia is 11%, but it’s almost likely you will not receive the whole VAT back. The actual VAT refund you receive could be less due to administrative fees and additional bank charges if you opt for a bank transfer. So, the final VAT refund in Indonesia you receive might vary.

Who is eligible for tax-free shopping in Indonesia?

To be eligible for VAT refund in Indonesia, you must meet these conditions²:

• You are not an Indonesian citizen or a permanent resident of Indonesia. You are staying in Indonesia less than 60 days from your arrival date;
• You are not a crew from an airline on duty in Indonesia;
• You must take your goods with you in your personal luggage within one month from the date of purchase;
• Your purchase per invoice is at least 50,000 IDR and total purchase from several invoices must be at least 500,000 IDR.

However, even if you meet all of these requirements, there are certain categories that you cannot claim VAT refund in Indonesia. These categories include²:

• Food, drinks, and tobacco;
• Explosive materials and weapons; and
• Prohibited items on aeroplanes.

How to get VAT refund in Indonesia?

Now that you have all of the general information, let's move on to the most exciting part: a complete guide to claim your VAT refund in Indonesia!

Receive valid tax invoice

It is worth noting that not all stores in Indonesia participate in the VAT refund scheme for tourists. Look for the "VAT Refund For Tourist" logo or ask the cashier to confirm if the store is registered under this scheme. Typically, major brands and popular stores are likely to be part of the refund program.

Inform the sales assistant that you will claim the VAT refund in Indonesia. They will issue a valid tax invoice. Keep this invoice safe, as it’s required to claim your refund. Without this invoice, you won’t be able to process your VAT refund.

Additionally, the sales assistant may also request to see an officially recognized identity document, so remember to bring one (e.g., your passport) when you go shopping.

Have the forms validated

You will need to validate your goods and the tax invoice at the airport before leaving the country. One thing you need to note is that the VAT refund service in Indonesia is only available at some selected international airports. You can check this table to check if your airport has the service and the location of Directorate General of Taxes (DGT) in each airport²:

On the day of your departure, visit the nearest DGT (Directorate General of Taxes) office at the airport for validation of your goods. Ensure you can present the following documents at the VAT refund counter:

• Your passport;
• Valid tax invoices;
• Boarding pass; and
• Purchased goods.

Obtain a VAT refund

Now, here comes the most exciting part of your VAT refund journey in Indonesia: it’s time to receive your VAT refund in Indonesia! There are two payment methods that you can choose to receive your money:

By cash: You will immediately receive your VAT refund in Indonesia on cash, as long as your refund does not exceed 5,000,000 IDR.

Bank transfer: If your refund is more than 5,000,000 IDR, the refund will be sent to your bank account in IDR. You should provide your bank account number and designated bank for transfer. You will receive your VAT refund in Indonesia within a month using this payment option.

So, that is it! This handy guide walks you through the entire VAT refund process while you are travelling in Indonesia. The process is simple and quite efficient, but you should still get to the airport early, as queues can get crowded at some airports.

There is one last step, however, that could seriously assist more saving on your journey to Indonesia. When your card's main currency (e.g., GBP) differs from Indonesia local currency (e.g., IDR), it will be automatically converted every time you swipe your card. Your bank will set the conversion rate, typically with a hidden markup.

Fortunately, you can easily offset these fees with a Wise card. This card lets you enjoy auto-conversion on all your holiday spending at the mid-market rate for a small and transparent fee. With this card, you can easily withdraw cash from many ATMs in Indonesia.

What makes this card even better? If you plan to travel to other countries in the region, you can easily switch to the next local currency with your Wise account. It supports holding and exchanging 40+ currencies, including IDR! Order your Wise card for a one-time fee of 7 GBP today!

Get your card now

Please also be aware that tax rates and regulations may change over time. Always verify the information with official sources for the most accurate and up-to-date guidance.

Sources used for this article:

Sources last checked on 20-Sep-2024.