Sale of Goods to Places of Worship Subject to VAT

The Tax Circle, a public service unit of Indonesia's Directorate General of Taxes, stated that the supply of taxable goods by VAT-registered entrepreneurs to places of worship remains subject to Value Added Tax (VAT). The comment was posted on social media on Monday, 10 November 2025.

According to Government Regulation No. 49/2022 article 4, construction services provided by contractors for building worship facilities are exempt from VAT, as are construction services for disaster‑relief buildings. VAT‑registered entrepreneurs may issue regular or aggregated tax invoices if they meet retail merchant criteria.

Consequently, entrepreneurs must collect VAT on goods sold to worship sites, while they cannot claim input‑tax credits for the exempted construction services. This rule affects tax calculations for businesses and religious institutions alike.