e-Invoicing in Indonesia
The preparation of electronic tax invoices in Indonesia must be done by all VAT-registered businesses (PKPs). For Bali the new system for transactions started on July 1, 2015. As of July 1, 2016, it is also required for all PKPs throughout Indonesia. All VAT-registered businesses from Sumatra, Kalimantan, Sulawesi, Nusa Tenggara, Papua, and Maluku are already required to comply with the e-Faktur or e-Tax invoice system.
What is the e-Faktur system?
e-Faktur is an e-Invoice system similar to the one in India, but also has its own unique characteristics. The launch of this government policy is a response to widespread fraud arising from tax invoices that do not comply with official provisions. It also aims to further regulate and standardize tax invoice data that is regarded as unsuitable for tax purposes. The Indonesian government expects the successful implementation of electronic invoicing in Indonesia to raise VAT revenue.
How does e-Invoicing in Indonesia work?
In general, electronic invoicing does not change the main VAT rules, such as the timing and location of VAT payments, the usage of the invoice serial number, or the classification of goods and services subject to VAT. The changes are focused on the issuance of a tax invoices from a technical perspective.
By completing the e-Invoice application, the taxpayer will send the e-Invoices to the Indonesian Tax Authority, which will validate and approve the invoice data. The approval is in the form of a QR code (quick response code), which will automatically be placed on a tax invoice after being successfully uploaded. If the issue date is after 1 July, 2015 but there is no QR code, then the invoice will be considered invalid.
A mechanism must be applied that can authenticate the identity of whoever uploaded the data, so that only responsible parties (typically the manager or director representing the PKP) can upload it. The data security is ensured by a digital certificate and passphrase. These two things must be issued by the Indonesian Tax Office before the e-Invoice application can be run.
e-Invoicing in Indonesia stipulates the following important points:
- All PKPs must register or activate their e-Faktur applications.
- All PKPs are to use their e-Faktur applications to prepare their VAT returns.
- PKPs are to obtain the certificate of e-Faktur from the registered tax office.
- Invoices that are not issued as e-Faktur, or are not accepted as in line with procedures, will be considered invalid. As a result, PKPs will be subject to a fine.
- On the buyer side, the received e-Faktur will be validated through the VAT input feature of the e-Faktur application, or by scanning the barcode or QR code printed on the e-Faktur.
- The VAT amount stated on any invoice that is not an e-Faktur or is not in line with procedures will not be accepted as input VAT.
SNI SAP solution for e-Faktur:
Firstly, the number range is requested and received by the Indonesian Tax Authority. Once it is received, we collect them on our tables in SAP. Afterwards, the invoices to be sent are enveloped and uploaded to the government’s portal, and a PDF with a unique QR code is prepared. If the QR codes are scanned via a scanner or barcode reader, the status of the document changes and is assigned a unique barcode. When scanning incoming invoices via a scanner or barcode reader, the information in the invoice will be collected in the cockpit, and checked any information that already exists in the SAP.
SNI solution integrates with clients’ systems without the need for updates to existing system versions and is independent of SAP versions. SNI’s SAP solution is compatible with SAP ECC 4.7 and above, as well as SAP Business Technology Platform (BTP), SAP R3 and SAP S/4HANA. In addition, SNI provides ERP-independent solutions designed to integrate with any ERP system clients may use.