Indonesia has increased its VAT registration threshold from IDR 0.6bn to IDR 4.8bn per year in taxable turnover with effect from 1 January 2014. The stated goal is to reduce the VAT compliance burden for small and medium sized businesses. The current VAT rate is 10%, and registered businesses must complete monthly VAT returns. Foreign companies may, however not register for Indonesian VAT; there is also no provision for recovery of local VAT by an unregistered business.
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