A tax invoice is one of the most important documents in business activities for Taxable Entrepreneurs (PKP). Without a valid tax invoice, business operators risk facing tax issues, including fines and audits. Learn more about tax invoices in this article!
Also Read: Complete Guide on EFIN Tax
What is a Tax Invoice?
A tax invoice is an important document issued by a Taxable Entrepreneur (PKP) when delivering Taxable Goods (BKP) or Taxable Services (JKP) to a buyer. This document serves as proof of Value Added Tax (VAT) collection from the transaction, which must then be reported by the PKP to the Directorate General of Taxes (DJP).
Types of Tax Invoices
There are several types of tax invoices commonly used by PKP, including:
Output Tax Invoice
An invoice created by PKP when selling BKP or JKP. This invoice reflects the VAT collected from the buyer.
Input Tax Invoice
An invoice received by PKP when purchasing BKP or JKP from another PKP. This invoice can be used to reduce the amount of VAT to be paid.
Replacement Tax Invoice
An invoice issued to replace a previous one due to errors in filling it out.
Combined Tax Invoice
An invoice covering all deliveries of goods or services to the same buyer within one calendar month.
Lumped Tax Invoice
An invoice that does not list the buyer’s identity and is only used by PKP Retailers.
Defective Tax Invoice
An invoice that is incorrectly filled out and needs correction.
Canceled Tax Invoice
An invoice canceled due to a canceled transaction or incorrect NPWP entry.
Additionally, some documents such as electricity or telephone bills are considered equivalent to a tax invoice even though their format differs.
Also Read: Differences Between PKP and Non-PKP: A Guide for Entrepreneurs
Functions of a Tax Invoice
For PKP, a tax invoice serves several important functions, including:
Proof of Transaction and VAT Collection
A tax invoice serves as proof that a BKP or JKP transaction has been subject to VAT in accordance with applicable regulations.
Accounting Control
A tax invoice serves as the basis for recording accounts receivable and payable, especially in credit transactions.
VAT Credit
PKP can claim input tax to reduce VAT owed. If the input tax is greater than the output tax, PKP is entitled to a refund or VAT compensation.
Internal Control
Tax invoices help companies control transactions involving taxation and verify the accuracy of order and payment data.
Also Read: Individual PT Tax: Calculation and Complete Reporting Guide
The Importance of e-Invoices
Since the implementation of e-Invoices by DJP, PKP is required to use electronic tax invoices in every transaction involving BKP or JKP. The use of e-Invoices aims to increase transparency and minimize the risk of tax errors or manipulation. Additionally, with e-Invoices, the issuance process can be automated, making it easier for PKP to meet their tax obligations.
Easy Solutions for Managing Tax Invoices
Managing taxes can be a complicated and time-consuming task, especially for business owners who want to focus on business development. Hiring a professional tax service is the best solution to simplify tax management.
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