Indonesia MOF Issues Regulation Concerning VAT, Sales Tax Paid by Government on Electric, Low-Carbon Vehicles

The Indonesian Ministry of Finance Feb. 4 issued Ministerial Regulation No. 12/2025, on VAT and the sales tax on luxury goods paid by the government on certain electric and low-carbon emission vehicles in fiscal year 2025. The regulation includes measures setting rates paid by the government of: 1) 10 percent for VAT on battery-based four-wheeled motor vehicles with a minimum domestic content (TKDN) of 40 percent; 2) 10 percent for VAT on battery-based electric buses with a minimum domestic content of 40 percent, and 5 percent VAT for a TKDN of 20 percent; and 3) 3 percent for the sales ...