VAT Refund Deemed Ineffective to Spur Retail Performance

A regulation governing the value-added tax (VAT) return was finally issued. Although the VAT refunds ranges are still the same, which is Rp 500,000 to Rp 5 million, the government provides concessions for foreign tourists who wish to apply for a VAT refund by submitting special tax invoices (FPK) with the total value as specified.

In the previous regulation, foreign tourists only got a tax refund if they shop with a minimum VAT of Rp 500,000 in one FPK from the same retail store and on the same date. In the new rules, which takes effect on October 1, 2019, foreign tourists may apply for VAT returns in one or more FPKs from several retail stores with a different date, with a minimum limit of Rp 50,000 per FPK.