Indonesia rewires VAT for insurance agents and DIY builders
The Big Picture: Jakarta just gave its value-added tax rules a makeover, and the tweak could ripple through underwriting desks and construction sites nationwide. Regulation PMK 53/2025, in force since 1 August, aims to swap guess-work for certainty on how much VAT insurers and self-builders owe, International Tax Review. For more insights on tax reforms, check out our Introduction To Nigerian Tax Laws.
The Details: • Insurance commissions now attract VAT equal to 10 % × 11⁄12 of the standard rate for agents, and 20 % × 11⁄12 for brokerages. • For people who put up their own homes or shopfronts, the VAT is 20 % × 11⁄12 of the tax rate applied to construction costs,land excluded. • The Ministry of Finance says the formulaic approach delivers the “legal certainty” businesses have been begging for. This structured update aligns with broader tax reform conversations, as noted in our coverage of the Presidential Committee Hosts Tax Reforms Workshop: Are We Ready?.
Why It Matters / What They’re Saying: The reaction was swift: tax advisers hailed the move as “a predictable baseline” for pricing. Yet some contractors worry the higher-than-expected multiplier could squeeze already thin margins. Meanwhile, insurers like the clarity but are running the numbers to see whether commissions remain competitive under the new math.
Around the Tax World
• Spain’s e-invoice fork in the road: From 2026, companies must choose between the real-time SII system or the new Verifactu platform designed to zap invoice data straight to the taxman, according to International Tax Review.
• Trump tweaks the global minimum tax (again): Proposed IRS regs make the U.S. corporate alternative minimum tax “more favorable or simpler,” KPMG analysts told The Hill, drawing fire from Democrats who fear enforcement back-pedaling.
• Belt-and-Road tax chiefs huddle in Kathmandu: Nearly 400 delegates from 45 jurisdictions opened the 6th BRITACOF, focusing on new tools to streamline cross-border compliance, City News Service noted.
• Podcast alert: Tariffs and transfer pricing are colliding in supply chains, warns AGG partner Mike Burke on the latest Cross-Border Business episode (JD Supra).
Tax Stat of the Day
400 , the number of delegates hashing out cooperative audits at BRITACOF in Nepal.
Looking Ahead
All eyes now turn to Indonesia’s Directorate General of Taxes, which is expected to issue guidance on calculating those 11⁄12 factors before October filing season. For further insights into comprehensive tax reforms, explore our detailed guide on Nigerian Tax Laws 2025.