Indonesia MOF Issues Regulation Providing VAT Incentive for Domestic Commercial Air Transportation

The Indonesian Ministry of Finance April 24 issued Ministerial Regulation No. 24/2026, introducing a VAT incentive for domestic air transportation services. The regulation includes measures: 1) imposing VAT on the specified air transportation services, but granting a 100 percent VAT borne by the government for fiscal year 2026 on base fare and fuel surcharge; 2) limiting the incentive to ticket purchase and flight periods within 60 days from the regulation’s effective date; 3) requiring airlines to issue tax invoices or equivalent documents and report VAT, distinguishing government-borne VAT from regular VAT; 4) requiring submission of detailed transaction reports, including ticket, ...