Indonesia: VAT incentive for domestic air transportation introduced

The Indonesian Ministry of Finance issued Ministerial Regulation No. 24/2026 on April 24, establishing a VAT incentive for domestic air transportation services.

The regulation provides that VAT is imposed on the specified services, with a full government-borne VAT applied under certain conditions for the 2026 fiscal year.

Key provisions

• VAT applies to domestic air transportation services, with 100 percent VAT borne by the government on the base fare and fuel surcharge

• The incentive is limited to ticket purchases and flight periods within 60 days from the regulation’s effective date

• Airlines must issue tax invoices or equivalent documents and report VAT, clearly distinguishing between government-borne VAT and regular VAT

• Airlines are required to submit detailed transaction reports, including ticket, route, and VAT data, by July 31

• The incentive is denied if conditions are not met, including for non-economy class services, transactions outside the eligible period, or late reporting

The regulation enters into force on the day following its publication in the Official Gazette.

Source: go.id