A new regulation in Indonesia requires importers of intangible goods (such as software or other digital goods via electronic transmission) to fulfil customs obligations, including submitting a customs declaration and paying relevant import taxes and customs duties. The Minister of Finance has enacted Minister of Finance Regulation No. 190/PMK.04/2022 on Release of Imported Goods for Use ("Regulation"), which sets out the relevant procedural rules. The customs duty rate for such goods is 0% if they are not classified as hardware but can reach up to 20% if they are classified as hardware, depending on the classification of the hardware.
However, there are outstanding issues relating to the Regulation that require further analysis, including the applicability of the reverse charge VAT mechanism for parties that buy software or other digital goods from offshore to be used in Indonesia, and whether offshore sellers of digital goods should collect the VAT or buyers should self-pay the VAT via a customs declaration. Companies involved in the technology industry would be the focus of the customs authority, particularly if they have an import identity number and import hardware into Indonesia, and must be aware of the Regulation.
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