In this article, you will learn a complete step on Calculating Import Tax and Duties in Indonesia. However, if you want to skip reading and jump into your specific case, you can easily get a free consultation.
Import Tax in Indonesia
In Indonesia, there are 3 types of Tax apply when importing products=
- Import Duty: Rates vary from 0-450%, depending on the HS Code of the goods.
- Value-Added Tax (VAT): 10% of goods value.
- Income Tax: 2.5% or higher for specific products.
The way you pay import Duties depends on what taxes you have to pay and where the goods are being ship from.
If you have to pay Customs Duty, the payment process is usually handled by the courier.
They will contact you to explain how much is due and how you can pay and Depending on the context, import duty may also be know as a customs duty, tariff or import tax.
To calculate your Import Duty, you need to get your Total value in IDR x percentage of import duty.
Won’t forget to mention, if your goods value is higher than the usual, there are some added Tax.
in other words, if it is consider expensive, unnecessary and non-essential, in Indonesia there will be some added tax called Luxury Tax.
Such goods include expensive cars, private jets, yachts, jewellery, etc. Luxury tax is “an indirect tax that increases the price of a good or service and is only imply to those who purchase the products”.
In Indonesia, Tax calculation system is very complex, and goes a little bit like this:
Luxury cars (150% – 200%)
Luxury motorcycles (60%-125%)
Alcohol beverages (5%-20%)
Branded shoes (40%)
It is better for you to seek consultation with our professional importer, For Instance. So that your whole experience on calculating import tax and duties, could be easier.
Value Added Tax
a value added tax, is also known as goods and service tax, is a type of tax that is levied in stages on the price of a product or service at each stage of production, distribution, or sale to the final consumer.
In indonesia, the VAT value is 10%. so to calculate the VAT, you can use this formula: (Total value in IDR + Import Duty) x 10%
An income tax is a tax imposed on individuals or corporations in respect of the income or profit earned by them. Income tax is generally calculated as the product of a tax rate times taxable income. Tax rates may vary depending on the type or characteristics of the taxpayer and the type of income.
to calculate yours, you can use this formula: (Total value in IDR + Import Duty) x percentage of Income Tax
Total Tax to Import
To calculate the total import tax, you will first need to convert the value of the goods to Indonesian Rupiah (Rp.) using the following formula:
TOTAL VALUE IN IDR= (Total Value in USD + Total CIF*) x IDR exchange rate
*CIF= (Freight on Board + Insurance + Freight Cost) x exchange rate
The calculation formula for total import tax and duty:
Import Duty + VAT + Income Tax where:
|Type of Tax||Calculation method|
|Import Duty||Total value in IDR x percentage of import duty|
|VAT||(Total value in IDR + Import Duty) x 10%|
|Income Tax||(Total value in IDR + Import Duty) x percentage of Income Tax|
we also have an import tax calculator that allows you to estimate all taxes associated with importing a shipment to Indonesia.
Before getting right into shipping, we first need to understand the Custom clearance system and how it works, here, in the Nation.
Once the goods arrive in the Indonesian customs zone, customs officials will classify your products into one of three different customs areas:
- Green Channel (takes about 1 day) means Your products are good to go
- Yellow Channel (takes about 2-3 days) means it require additional documents
- Red Channel (takes about Up to 7 days, may include more cost for storage) means you may require to re-import Physical inspection is needed*
*to avoid this matter, we also have this article where you can learn on how to get your goods off the red channel or, you can just simply use our service! as a certified Importer of Records (IoR), we can easily help you with that!
And Also, you won’t have to obtain import licenses in Indonesia or worry about customs clearance, as we will take care of everything for you. A-Z , paperless service with platform based app, and you don’t even bother to deal with Indonesian Customs!
You might wanna consider clicking on this contact page of ours, to get a free shipping consultation!