ISP Tax

Yes, internet access services (broadband, dedicated, WiFi) are fully subject to 11% VAT as taxable services (JKP). For retail ISPs serving thousands of residential customers, simplified invoices (PKP PE) are used without listing individual buyer identities. For B2B corporate clients, standard 010 invoices must be issued. The ISP's input VAT on upstream bandwidth, electricity, and equipment rental is creditable.

Yes, ISPs building their own telecommunications infrastructure qualify for tax allowance under PP 78/2019, providing a 30% reduction in net taxable income spread over 6 years from the investment. Requirements include: minimum investment of IDR 100 billion, infrastructure used for broadband services, and assets not transferred within 6 years. The incentive applies to ISPs building their own fiber, BTS, or other network infrastructure — not to bandwidth resellers.

Each tower or equipment location generates: annual land and building tax (PBB) on the site value, regional business tax (PBJT) in applicable jurisdictions, and potential regional infrastructure fees. ISPs with equipment on leased towers should review contracts to determine who bears these tax obligations. Multi-location ISPs need a centralized system to track and pay regional taxes across all sites to avoid cumulative penalty exposure.

Bandwidth purchased from international carriers is treated as an imported service subject to VAT at 11% (self-assessed by the ISP as the service recipient). If the carrier is a related party, PPh 26 at 20% may also apply on the fee, potentially reduced under an applicable tax treaty. The ISP should obtain a valid SKDWPLN from the carrier to apply treaty-reduced withholding rates.

ISPs must maintain for each equipment import: PIB (customs import declaration), commercial invoice and packing list, bill of lading or airway bill, HS code classification documentation, duty and tax payment receipts, and any Masterlist facility approval letters. The documentation supports tax credit claims for Article 22 income tax and VAT paid at import. Accurate tracking of equipment serial numbers and installation locations is recommended for fixed asset records.

Yes. We are registered tax consultants and support clients with compliant, professional tax advisory and representation.

Contact us early. We help analyze the risk, prepare supporting documents, draft the response, and assist discussions with the tax office.

It depends on your structure and transactions. We identify legal efficiencies, incentives, and reporting improvements without crossing into tax evasion.