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Government-Borne VAT on Holiday Economy Flights: PMK 77/2026

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Regulatory digest Published 9 November 2026 Machine-drafted

Minister of Finance Regulation Number 77 of 2026 (Peraturan Menteri Keuangan Nomor 77 Tahun 2026) deals with value added tax on domestic scheduled commercial economy-class air transport during the Christmas and New Year holiday period, for fiscal year 2027. It was signed in Jakarta on 12 October 2026 and has 8 articles and one annex. Its preamble states that the government is providing the incentive to maintain public purchasing power and to stimulate the national economy, especially during the Christmas 2026 and New Year 2027 holidays. Under Article 8, the regulation takes effect on the date of its promulgation.

Key Provisions

The tax remains owed, and the government bears it. Article 2(1) confirms that VAT is owed on the delivery of domestic scheduled commercial economy-class air transport. Article 2(2) leaves the calculation to Minister of Finance Regulation Number 131 of 2024. Article 2(3) provides that the government bears 100 percent of the VAT owed for fiscal year 2027. Article 2(4) limits this to the VAT owed on the base fare and the fuel surcharge.

Two periods must both be met. Article 3(1) grants the relief to the service recipient for tickets purchased from 20 October 2026 to 10 January 2027, and for flights taken from 22 December 2026 to 10 January 2027.

A worked example. Under Article 3(2), the annex gives calculation examples. In one, a passenger buys a Jakarta to Surabaya ticket on 22 October 2026 for a flight on 22 December 2026, with a base fare of Rp790,000 and a fuel surcharge of Rp121,600. The VAT of Rp100,276 is fully borne by the government. In another, an identical ticket bought on 25 October 2026 for a flight on 21 December 2026 receives no relief, because the flight date falls outside the period.

Airline Obligations

Article 4(1) requires an air transport business entity that is a taxable entrepreneur to issue a tax invoice, or a document treated as equivalent to one, and to file its periodic VAT return. Article 1(10) lists the equivalent documents as the ticket, the airway bill or the delivery bill. Under Article 4(2)(b), where the Article 3 conditions are met, the invoice shows the VAT as government-borne and the airline reports it in the return as a facilitated delivery.

Article 5(1) also requires the airline to prepare a detailed list of government-borne VAT transactions. Article 5(2) sets out its contents, which include the airline's name and tax number, the month of ticket issue, the booking reference, the departure and arrival airports, the purchase and flight dates, the tax base and the VAT borne by the government. Article 5(4) requires electronic submission through a Directorate General of Taxes website, and Article 5(5) sets the deadline at 31 March 2027.

When the Relief Does Not Apply

Under Article 6(1), the government does not bear the VAT where the service falls outside the Article 3(1) purchase and flight periods, where the flight is not in economy class, or where the taxable entrepreneur submits the transaction list after the Article 5(5) deadline. Article 6(2) provides that VAT is then imposed under the tax laws.

Article 7 provides that the implementation of, and accountability for, the fiscal year 2027 tax subsidy follow the laws and regulations.

Checked against the official text of PMK 77/2026 on 9 November 2026. This is not legal advice; report corrections to contact@crpg.id.

Disclaimer

This article was AI-generated under an experimental legal-AI application. It may contain errors, inaccuracies, or hallucinations. The content is provided for informational purposes only and should not be relied upon as legal advice or authoritative interpretation of regulations.

We accept no liability whatsoever for any decisions made based on this article. Readers are strongly advised to:

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This experimental AI application is designed to improve access to regulatory information, but accuracy cannot be guaranteed.

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