Regulation Watch · Tax Compliance · Indonesia. The facility applies to domestic scheduled commercial economy-class air transport. It affects Indonesian airlines registered as taxable entrepreneurs, domestic and foreign passengers, expatriates, PT PMA and PT PMDN employers, tourism and travel businesses, travel agents, online travel platforms, corporate travel teams and finance or tax teams buying qualifying tickets.
Indonesia Covers VAT on Year-End Economy Airfares
PMK 77/2026 makes the government bear 100 percent of VAT on the base fare and fuel surcharge of qualifying domestic scheduled economy flights during the 2026/2027 year-end holiday period.
- Published
- Established by the Minister of Finance on 12 October 2026 and promulgated on 20 October 2026 in State Bulletin 2026 No. 715.
- Effective
- 20 October 2026. Eligible tickets must be purchased from 20 October 2026 through 10 January 2027 for flights from 22 December 2026 through 10 January 2027.
- Added to Watch
- 21 October 2026
Who is affected
Domestic scheduled airlines registered as taxable entrepreneurs; Indonesian and foreign passengers; expatriates; PT PMA and PT PMDN employers; tourism operators; travel agents and online travel platforms; and corporate travel, procurement, finance and tax teams arranging domestic economy travel during the year-end holiday period.
Practical impact
The government bears 100 percent of the VAT attributable to the base fare and fuel surcharge for a qualifying domestic scheduled economy ticket. The facility does not extend to ticket components outside the base fare and fuel surcharge. Eligibility depends on both the ticket-purchase window and the actual flight window. The airline must issue the prescribed tax invoice or equivalent document, report the transaction in its VAT return and submit the electronic transaction detail list through the Directorate General of Taxes page by 31 March 2027.
The Minister of Finance established PMK 77/2026 on 12 October and promulgated it on 20 October 2026 in State Bulletin 2026 No. 715. It took effect on promulgation and creates a targeted VAT facility for domestic scheduled economy flights during the 2026/2027 Christmas and New Year holiday period.
The government bears 100 percent of the VAT attributable to the base fare and fuel surcharge of a qualifying ticket. The relief is therefore component-specific. Amounts for services outside the base fare and fuel surcharge remain outside this facility and should be treated under the otherwise applicable VAT rules.
Two date tests apply. The ticket must be purchased from 20 October 2026 through 10 January 2027, and the flight must take place from 22 December 2026 through 10 January 2027. A ticket that satisfies only one of these periods does not qualify. The flight must also be a domestic scheduled commercial service in economy class.
The airline, as the taxable entrepreneur making the supply, carries the operational tax duties. It must issue the required tax invoice or equivalent document for the qualifying transaction, report the VAT borne by the government in its periodic VAT return and maintain a detailed transaction list. The list must be submitted electronically through the Directorate General of Taxes page by 31 March 2027.
Corporate travel teams, tourism businesses, travel agents and online platforms should verify both date windows before representing the discount or approving a travel budget. They should also separate the base fare and fuel surcharge from ancillary items, retain the ticket and payment trail, and reconcile the supplier document against the amount actually charged.
If the ticket, travel class or travel date falls outside the prescribed conditions, or if the airline submits the transaction detail list after the deadline, the VAT is not borne by the government and applies under the ordinary rules. The regulation creates no separate application process for a passenger and no special penalty schedule, but ordinary VAT documentation, reporting and sanction rules remain relevant to the airline's treatment.
Required action
- For travel planning, confirm that the ticket is purchased from 20 October 2026 through 10 January 2027 and that the domestic economy flight departs from 22 December 2026 through 10 January 2027.
- Check the ticket breakdown so the VAT facility is applied only to the base fare and fuel surcharge, and keep ancillary services outside the subsidised amount.
- Passengers, employers and travel businesses should retain the booking confirmation, payment evidence, ticket, itinerary and proof of travel for reconciliation and expense support.
- Airlines should configure ticketing and tax systems to issue the required tax invoice or equivalent document showing VAT borne by the government and report each qualifying supply in the applicable VAT return.
- Airlines should prepare the required transaction detail list and submit it electronically through the Directorate General of Taxes page no later than 31 March 2027.
- Travel agents, online platforms and corporate travel teams should not promise the facility for a ticket that falls outside either date window or for a class other than economy.