Value Added Tax (VAT) is a tax imposed on taxable goods and service delivery within the customs area, taxable goods import, taxable goods and service utilization from outside the customs area, as well as taxable goods and service export by taxpayers. This tax is one of the main contributors to tax revenue of Indonesian State Budget since the performance of tax revenue is supported by, among others, VAT and Luxury Sales Tax (LST). VAT revenues have also increased from year to year. However, until October 2020, the VAT and LST realization reached only 64.82% of the target set, such revenues were lowest compared to other types of taxes. This has happened since Fiscal Year 2019.

There are many factors to explain the low tax revenues, one of them is related to several tax compliance issues with Taxable Entrepreneurs. Under the VAT Law, Taxable Entrepreneurs must calculate, deposit, and report VAT owed to the State.

The Directorate General of Taxes (DGT) provides e-Invoice application service for Taxable Entrepreneurs. However in its implementation, there are several issues, such as Taxable Entrepreneurs having to input manually, unofficial and risky QR Scanner e-Invoice applications, bad credit risk caused by counter party’s transactions made in a separate application (DGT online), and the long duration in posting Tax Return. In addition, there were still many errors in the process of filling in the State Revenue Transaction Number in the e-Invoice application, especially regarding Notification of imports of goods (Pemberitahuan Impor Barang/PIB).

The Indonesian government, through DGT, continues to provide facilities for Taxable Entrepreneurs in fulfilling their VAT obligations, one of which is by renewing e-Invoice application to e-Invoice 3.0. The purpose of the renewal includes helping taxpayers to fill in periodic VAT Tax Return completely, correctly, and clearly, especially on form 1111 B1 for PIB numbers, form 1111 B2 for Input Tax, as well as automation of making tax invoices and reporting periodic VAT Tax Return, which will minimize errors that might affect taxpayer’s right.

Based on information from vatglobal.com, prepopulated VAT returns are also implemented in several European Union countries, one of which is Italy. The program was implemented in July 2020 with the introduction of electronic invoicing which requires the initial approval of Italian tax authorities. Moreover, the information contained in Italian tax authority database was used as a source for the preparation of prepopulated VAT returns for further review and confirmation. However, non-established companies in Italy will not be affected by the policy as they are not obliged to issue invoices electronically. Prepopulated VAT returns in Italy aimed to reduce VAT gap in Italy in 2017 which is the largest income loss among other EU countries.

In Indonesia, the implementation of Prepopulated Data in e-Invoice 3.0 Application has been implemented gradually in 2020. The first trial was conducted in 4 Taxable Entrepreneurs at Taxpayer Offices on February 1 this year. Based on Announcement Number PENG-11/ PJ.09/2020, DGT plans to implement the e-Invoice 3.0 application nationally, as well as the use of prepopulated data features, on October 1, 2020, for tax period of September 2020. The latest e-Invoice application can be downloaded on https://efaktur.pajak.go.id. The available e-Invoice application is a Patch Update which must be added to the previous version of the e-Invoice application (e-Invoice version 2.2).

Prepopulated means information that has been previously inputted by online system. With this feature in e-Invoice 3.0, Taxable Entrepreneurs no longer need to manually input certain information since the data has been provided by the system. The prepopulated data features contained in e-Invoice 3.0 consist of prepopulated Input Tax, prepopulated PIB, prepopulated Tax Return Period VAT and VAT refund. Another feature in e-Invoice 3.0 is stamp code synchronization.

It is expected that prepopulated Input Tax feature will save more time and minimize errors.  Taxable Entrepreneurs do not need to input manually and scan special QR Code, and only required to choose an Input Tax Invoice of transaction and recorded correctly from the available Input Tax Invoice data. 

In addition, in the Input Tax prepopulated feature, Taxable Entrepreneurs can choose the tax crediting period according to the crediting provisions. Taxable Entrepreneurs can fill in the Input Tax Invoice list by selecting the "get data" button then adjust the credit information of each invoice according to the tax rules. Input Tax Invoice that is not yet available by the system can still be inputted manually. It also needs to be noted that Taxable Entrepreneurs must fill out the invoice list carefully because the Input Tax Invoice that has been uploaded cannot be changed anymore.

With prepopulated PIB feature, Taxable Entrepreneurs can no longer needs to key in and there will be no more State Revenue Transaction Number (Nomor Transaksi Penerimaan Negara/NTPN) input errors because PIB data is available by the system. This is supported by DGT and Directorate General of Customs and Excise (DGCE) in the validation of the PIB reported by Taxable Entrepreneurs in the Periodic VAT Tax Return. Only PIB recorded in DGCE can be reported by Taxable Entrepreneurs. Validation includes the PIB/Tax payment slip document number, date of NTPN, transaction value as well as tax account code and deposit type code recorded in the Tax payment slip. In addition, Taxable Entrepreneurs can choose the tax crediting period according to the crediting provisions.

However, the prepopulated PIB feature requires that an NTPN is available on every PIB document inputted. This will be a problem when Taxable Entrepreneurs need to input PIB 0 documents with no NTPN, especially for imports carried out in bonded areas and ease of import for export purposes, because the prepopulated e-Invoice feature cannot yet be run. Thus it remains an issue for Taxable Entrepreneurs to report PIB 0 through the prepopulated PIB e-Invoice 3.0 feature.

With the prepopulated Tax Return feature, Tax Return reporting can be carried out via e-Invoice Web-Based and all the Output Tax Invoice data, Input Tax Invoice, and other uploaded documents are available when Taxable Entrepreneurs need to report periodic Tax Return VAT on the Web-Based e-Invoice. It automates invoice data that has previously been inputted in e-Invoice Desktop. NTTE documents and Electronic Receipt documents can also be downloaded directly on the same page after the Periodic VAT Tax Return has been successfully reported.

However, the prepopulated Tax Return for the VAT period is allegedly not accommodating the changes in the rules of Article 9 paragraph (6a) of the VAT Law into Article 112 of Omnibus Law. The amendment is related to filling in the main page of Part IV Tax Return Period VAT, which is based on the provisions of Omnibus Law in the context of "reimbursement of input tax for Taxable Entrepreneurs failing to produce" changed to "non-creditable input tax for Taxable Entrepreneurs who have not submitted Taxable Goods and/or Taxable Services and/or export of Taxable Goods and/or Taxable Services related to the Input Tax ”. Thus, Taxable Entrepreneurs must be careful in interpreting changes to the contents of these rules.

In order for the prepopulated data feature can run well and provide benefits for Taxable Entrepreneurs, here are things that must be considered regarding the implementation of e-Invoice 3.0

It is expected that prepopulated data feature available in e-Invoice 3.0 will resolve several issues. Questions and answers related to the implementation of e-Invoicing 3.0 can be checked in the following link.