Indonesia is a rapidly developing country with a burgeoning consumer market and a thriving manufacturing sector. As such, it presents numerous opportunities for businesses and individuals looking to import goods into the country.
However, navigating the complex regulations and processes involved in importing can be daunting, especially for those who are unfamiliar with the Indonesian market. This guide is designed to provide a comprehensive overview of the steps involved in importing to Indonesia, including the legal requirements, documentation, and customs regulations.
Whether you are a small business owner looking to source new products or an individual looking to bring personal belongings into the country, continue reading this guide to learn the information you need to navigate the import process with confidence.
1. Have all your import documents ready
Importing goods into Indonesia can be a complex process, but understanding the necessary requirements and regulations can help make it easier. One of the essential licences needed to import into Indonesia is the Indonesian Tax ID Number (NPWP - Nomor Pokok Wajib Pajak) and the Single Business Number (NIB). It's important to note that new customs regulations have been introduced by the Indonesian government, which took effect on 1 August 2021.
According to the new customs rules, all shippers must provide the Indonesian Tax ID Number to their shipment carrier service when importing to or exporting goods from Indonesia to the rest of the world.
For businesses: Companies within Indonesia should provide the Indonesian Tax ID Number when importing or exporting.
For private individuals: Aside from the Indonesian Tax ID Number, private individuals have alternative identification numbers that they can use when importing or exporting, including:
- Indonesian ID Number (NIK - Nomor Induk Kependudukan) for Indonesian nationals
- Indonesian driver’s licence for Indonesian nationals or foreigners
- Passport number only for foreigners
To facilitate the customs clearance and declaration process in Indonesia, shippers must provide several necessary documents, such as:
- Purchase orders
- Packing lists
- Commercial invoices
- Certificate of origin
- Airway bill/bill of lading
- Packing list
- Receipt of payment of import duty and import-related taxes
- Other relevant permits that may be needed depending on the respective Harmonised System (HS) Codes, for example, for the HS code: 9503.00.10 (Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages), a survey report and SNI (Indonesian National Standard) certificate is required from the Ministry of Trade
2. Verify the HS codes of your imports
If you are a business or individual looking to import goods into Indonesia, it is important to understand the HS Codes associated with the cargo. The HS Code is a standardised system used to classify goods that are shipped globally. In Indonesia, this code is necessary to evaluate the acceptance of cargo and the required permits for importation. Failure to accurately report HS Codes can lead to significant consequences such as fines, seized goods, and delays in operations. Therefore, it is critical to ensure that you have the correct HS Code for your cargo to avoid any issues during the importing process.
3. Be aware of custom duties, tariffs and taxes
It is important to be aware of the customs duties, tariffs, and taxes that may be applied to your goods when you are importing to Indonesia. All imports into Indonesia, including personal items, are subject to Cost, Insurance, and Freight (CIF) duty, Value-Added Tax (VAT), Excise, and Sales Tax.
CIF duty is calculated based on the complete shipping value, which includes the total cost of goods, freight, and insurance.
Duty costs in Indonesia vary depending on the type of goods being shipped and can range from 0% to 40%. Some items, such as books, laptops and electronic products, may be imported duty-free, while others may be subject to additional taxes on top of the CIF, such as luxury cars (150-200%), alcoholic beverages (5-20%), and branded shoes (40%).
In addition to CIF duties, all imported goods are subject to 11% VAT, or a reduced rate of 0%-5% calculated based on the CIF value and duty. Certain goods may also be subject to Excise rates, which are meant to control their import and consumption. Excisable goods include ethyl alcohol, beverages containing ethyl alcohol, and tobacco products.
Sales taxes in Indonesia vary greatly and depend on both the type and quantity of goods being imported. A Sales Tax on Luxury Goods (STLG) is further applicable to selected luxury products at a rate of 10%-75% of the sum of CIF value and duty.
It is important to note that imports with a total product value up to US$50 are exempt from CIF duties but are still subject to VAT, excise, and sales taxes if applicable. Therefore, it is essential to calculate the total cost of your imports, including all applicable fees and taxes, before importing into Indonesia. Failure to comply with customs duties, tariffs, and taxes can result in penalties, fines, and even the confiscation of goods.
4. Take note of restricted and prohibited goods
When importing goods into Indonesia, it is crucial to be aware of the restrictions and prohibitions on certain goods and commodities such as:
- Live animals, fish, or birds
- Blank, cancelled, or cashier cheques.
- Electronic cigarettes
Moreover, the Ministry of Trade (MOT) has implemented Regulation 18, which prohibits the importation of sugar, rice, and hand tools. It is essential to take note of these restrictions and regulations to avoid any potential delays or penalties. By understanding the requirements and regulations for importing goods into Indonesia, you can ensure that your exports comply with all necessary standards and avoid any issues with the authorities.
