Taxation ยท KBLI 10710

Manufacturing & Industrial Tax

Manufacturing industries face high VAT complexity: Input VAT from raw material and machinery purchases must be managed for optimal crediting. Risk of VAT overpayment often occurs due to timing of sales vs purchases. Arunika Consulting helps factories manage VAT and Article 22 Income Tax obligations so cash flow is not disrupted.

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What usually goes wrong

  • Chronic VAT Overpayment

    Raw material and machinery capex purchases at the beginning cause Input VAT > Output VAT, resulting in overpayment that must be refunded.

  • Long Refund Process

    VAT refund applications require examination that can take 6-12 months, disrupting cash flow.

  • Article 22 Income Tax Cannot Be Directly Credited

    Article 22 Income Tax collected during raw material purchases becomes tax credit at year-end, not direct deduction.

What we do

  1. 01

    Integrated VAT Management

    Optimization of purchase and sales timing so Input VAT-Output VAT difference is minimal and refund can be avoided.

    • Stable cash flow
    • Minimal refund
    • Lighter administration
  2. 02

    VAT Refund Assistance

    Preparing documents, tax invoices, and assisting refund examination until disbursement.

    • Faster process
    • Reduced correction risk
    • Maximum disbursement
  3. 03

    Corporate Income Tax Planning

    Strategy for expense recognition and income timing to optimize annual Corporate Income Tax.

    • Efficient tax burden
    • Planned cash flow
    • Compliance maintained

Related regulations

  • UU PPN

    Law No. 42/2009 on Value Added Tax

    Obligation to collect 11% VAT on sales of production goods and Input VAT crediting mechanism.

  • PPh Pasal 22

    Article 22 Income Tax

    Article 22 Income Tax collection on raw material purchases from collectors or imports.

  • PMK-34/2017

    Article 22 Income Tax Collection for Certain Industries

    Article 22 Income Tax rates for cement, paper, steel, automotive, and pharmaceutical industries.

If the tax office starts asking questions

The team that keeps your books and files your taxes also stays with you through an SP2DK, an audit, an objection and an appeal.

How we handle tax disputes

Frequently Asked Questions

When can factories apply for VAT refund?

Refund can be applied every tax period if overpayment, or compensated to next period. For low-risk PKP, accelerated refund is available.

What is Article 22 Income Tax for certain industries?

Article 22 Income Tax is collected 0.25%-0.45% from sales for cement, paper, steel, automotive, and pharmaceutical industries as Corporate Income Tax installment.

What if suppliers don't provide tax invoices?

Input VAT cannot be credited without valid tax invoice. Ensure all PKP suppliers issue e-Invoices.

Who handles my tax work?

Your tax work is handled by Arunika's tax consultants. We confirm the scope, deadlines and price before work starts.

What should I do if I receive an SP2DK letter or tax audit notice?

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

What does tax planning cover?

We review your structure, transactions and available incentives so tax is calculated under the rules, without crossing into tax evasion. The outcome depends on your facts, so we do not promise a savings figure.

Related Industries

Tell us about your business

Send your line of business, rough annual turnover, and what is going wrong. We reply on WhatsApp.

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