Policies

Indonesia Value-Added Tax and Import Duty Exemption For Renewable Energy Property

Source: JOIN IEA/IRENA Policy and Measures Database
Last updated: 2 May 2017

The Regulation of 2010 mainly applies to renewable energy, but also to power plants in general. It stipulates that Import duty exemptions are valid for:

  • for machinery and capital for renewable energy; 
  • for capital goods required for public electricity supply (on- and off-grid).

Value Added Tax (VAT) exemptions apply to taxable goods imported to develop renewable energy projects, as long as no substitutes are manufactured in Indonesia. Exemptions are valid for 2 years with optional exenstion depending on applicability and feasibility. As of 2016, the exemption is still applicable.

The VAT exemption applies to machinerey (both constructed and dismantled); while tax may still be rasied on spare parts that companies need to use renewable energy for end-product manufacturing.

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