VAT Refund Delays for Korean Companies Operating in Indonesia

South Korea’s National Tax Service (NTS) reported that Korean companies operating in Indonesia are facing delays in receiving Value‑Added Tax (VAT) refunds. The issue was raised during a meeting with Indonesia’s tax director Bimo Wijayanto on 13 December 2025, part of the 12th Korea‑Indonesia Commissioners’ Meeting in Jakarta.

NTS Commissioner Lim Kwanghyun presented the problem directly to Bimo and asked for active support from Indonesian tax authorities. He also suggested using the Mutual Agreement Procedure (MAP) to resolve possible double‑taxation, while Indonesia’s tax law (Article 17B of the Value‑Added Tax Law) limits refund decisions to 12 months and allows accelerated processing for qualified taxpayers.

The Directorate General of Taxes recorded total refunds of IDR 340.52 trillion for January‑October 2025, a 36.4 % increase year‑on‑year, of which IDR 238.86 trillion were VAT refunds. Such delays can affect the cash flow of Korean firms, highlighting the need for continued bilateral tax cooperation.