The Indonesian government will impose a 12% value-added tax on luxury goods starting January 1, 2025. This regulation is specified in PMK No. 131 of 2024, and luxury goods classified items such as automobiles and related products will be subject to the 12% VAT in addition to the existing luxury tax (PPnBM). Non-luxury goods and services will be subject to a standard of "other value," effectively applying an 11% VAT. This transition period will last for one month in January 2025, and from February 1, a full 12% VAT will be applied to all luxury goods.
