A quick guide to calculate Custom Duty and Import Tax in Indonesia

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According to OEC Indonesia imported $178B worth of goods, making Indonesia the 27th largest importer in the world. This article will provide you insights on how to calculate import tax in Indonesia and what are the prerequisites of becoming an importer.

If you want to import faster or don’t want to establish an import company yourself you can start importing goods already right now by using our importer of record service.

Starting an Import company

Before you can start importing in Indonesia you will need to set up a company. Starting an import company involves various governmental institutions which makes the process lengthy but as long as the requirements are met then it’s fairly straightforward .

PT. PMA for Importing Goods

Foreign owned limited liability company (PT PMA) with import classification can have up to 100% foreign ownership. It takes roughly 6 weeks and is the necessary step for acquiring an import license. Straits Partners will be able to handle both the incorporation and import licenses on behalf of you.

For more more in-depth explanation as well as the necessary documents required you can find our guide for  setting up import company in Indonesia. Note that if you plan to be also a distributor you will additionally need to rent a warehouse in order to incorporate the company.

Operational licenses for import companies

No. Documents Institution issuing the license 
1 General Importer Identification Number Ministry of Trade 
2 Customs License Indonesian Customs Office 

Average application time: 16 working days

Import Licenses

Below are the licenses needed to start importing in Indonesia.

API (Importer Identification Number)

First of all, in order to import in Indonesia you must have an import license known as API (importer identification number) to be eligible for import operations.

Before you apply for the license you need to decide whether you are going to be a general importer or you plan to import goods for your production since one company can hold either API-U or API-P. The differences between the licenses are described in the table below.

API-UAPI-P
Angka Pengenal Importir Umum

General Importer Identification Number

Angka Pengenal Importir Produsen

Producer Importer Identification Number

License given to companies to import goods to be traded in IndonesiaLicense given to industrial companies for capital and raw materials to support productions / operations
Sample:

Tea, electronics, jewelry, etc.

Sample:

Machineries for factory plant, milk powder for milk factory, etc.

Source: Indonesian Ministry of Trade

NIK/SPR (Customs Identification Number)

Customs identification number is issued by the Indonesian Customs and once obtained you are ready to start importing goods to Indonesia.

Import Tax and Duties

Indonesia import tariff (Tax & duties) varied from 0%-5%, 5%-10% and more than 10%.  The amount of duties depends on the type of goods you want to import based on your product’s HS code. VAT (Value Added Tax) is  10% of the value of goods while income tax is 2.5% of the value of goods. The total of this is also known as PIB (pemberitahuan impor barang – declaration of imported goods).

Note that a luxury tax is applied to many products and the exact rate depends on the type of product.

For example:

Luxury cars (150% – 200%)

Yachts (75%)

Luxury motorcycles (60%-125%)

Alcohol beverages (5%-20%)

Branded shoes (40%)

Process of Importing in Indonesia

Now that you have set up an import company and obtained all the licenses you are ready to get your first shipment to Indonesia. The process is following:

Make a purchase order (PO) to a supplier abroad.

Request a Letter of Credit and have PO attached to the bank in Indonesia and abroad as well as signing L/C to both parties.

Supplier will send B/L (Bill of Ladding), Packing List and other required documents .

Original documents are sent to the bank and importer.

Input PIB or Notice of Import goods.

Once PIB has been filled the tax and duty can be calculated and paid.

As long as the import tax has been paid and documentation is in order the customs will release SPPB Surat Persetujuan Pengeluaran Barang (Letter of Agreement on Releasing Goods).

Goods are now ready to go given that the SPPB has been received by custom authorities.

Customs clearance

Indonesia custom clearance requires the following documents in order to be allowed to enter Indonesian territory:

Packing List

Bill of Lading/ Airway bill

Insurance Policy

Receipt of payment of import duty and import related taxes (SSPCP)

Power of Attorney if submitted by Customs Broker

HS code

Source: Indonesian Customs Office

Once the goods have arrived to Indonesian customs zone it is placed in one of three different customs  areas: green, yellow and red:

Green: the goods are good to go, the documents are complete and waiting for pickup. Harbor queuing process may take 1 day.

Yellow: some additional documents are required (incomplete), the goods are on hold in storage and may incur storage cost. Average 2-3 days.

Red: new importers,  incomplete documents, physical inspections are required by customs, high risk goods or originating from high risk countries, and may incur storage cost. Average time 7 working days and may require reimport.

Note that if your products are stuck in customs Straits Partners might be able to assist you to sort out a solution as we are working with the Indonesian customs on a daily basis. Just leave us a message below and we will get back to you to discuss potential solutions.

Forbidden goods

Indonesian import regulations prohibit the following goods to be imported to the country

Narcotics and drugs

Pornographic materials

Politically Sensitive materials; printed papers, pictures

Firearms, explosives, ammunitions (need special permit)

Guns, sport weapons / hunting rifle (need special permit)

According to Indonesian customs trying to import those goods can result in heavy sanctions and even prison sentence.

Plan of Easing Import Tariffs and Custom Duty – KITE

A new regulation was released on the 30th of January 2017 by President Joko Widodo which eased Indonesia’s import tariff and custom duty to 0%  for some small and medium sized businesses. We will update the article when more information regarding the program will be released.

An example of how to calculate total cost of import in Indonesia

In order to understand all the expenses related to import goods to Indonesia we have put together an example of a company importing milk powder to Indonesia.

CIF

(FOB + Insurance + Freight cost) x exchange rate

In Indonesia, the exchange rate for imported goods is following rate from Customs office.

Import Duty

= Import duty tariff x CIF

Tax & duties varies from 0%-5%, 5%-10% and more than 10% following HS code.

VAT & Income tax

VAT 10% x (CIF + Import Duty)

Income Tax = 2.5% with API or 7.5% without API

Import Tax Calculator

If you want to estimate your own import costs then use the calculator below:

Result
FOB: USDCIF: Rp
Insurance + Freight Cost: USDImport Duty: Rp
Excange Rate: Rp14255.00VAT: Rp
Import duty tariff:%Income Tax: Rp
Tax:Total: Rp

Top of Form
• Name
• Email id
• CIF
• Import Duty
• VAT
• Income Tax
• Email

Closing Thoughts: Getting Started as Importer in Indonesia

If you wish to establish an import company in Indonesia you need to plan at least a few months in advance since getting the company incorporated and acquiring licenses will take some time. However, the process is straightforward (if you or your consultant knows what they are doing) and once you have everything set up a promising and growing market is open to you.

In order to get started with your own import company, either contact us using the form below or go to our company registration in Indonesia page.

If you want to import faster or don’t want to establish an import company yourself you can start importing goods already right now by using our undername import service.

Feel free to reach out to us at [email protected]

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