On 29 March 2019, the Ministry of Finance issued Regulation No.32/PMK.010/2019 (PMK-32) concerning the VAT due on Exported Services. 

Prior PMK-32, 0% VAT on exported services only cover 3 (three) kinds of services i.e.  manufacturing services, repair and maintenance services; and construction services (including planning, implementation, and supervision). PMK-32 expands the range of services which subject to 0% VAT. The complete list of services that are subject to 0% VAT are as follows: 

1.  Services connected to movable goods utilized outside of the Customs Area: 
   • manufacturing services; 
   • repair and maintenance services; and
   • freight forwarding services on export-oriented goods. – new 
2. Services connected to immovable goods located outside of the Customs Area in the form of consultation services for construction, including assessment, planning, and design for construction. Unfortunately, this means that implementation and supervision service for construction are no longer included. 
3. Other services where the output is utilized outside of the Customs Area and utilization is based on a request from an overseas recipient through either direct or indirect transmission (e.g. via postal services or electronic channels), or the provision of access outside of the Customs Area. These include: 
   • Information and technology services; – new 
   • Inter-connections, satellites, and/or data connectivity services; – new 
   • Research and development services; – new 
   • The rental of aircrafts and/or ships for international flights or shipping activities; – new 
   • “Trading services” which assist in finding domestic sellers to procure goods for export purposes; – new and consultation in the form of: 
     • management and business services – new 
     • legal services, – new 
     • interior and architectural design services, – new 
     • human resource services, – new 
     • engineering services, – new 
     • marketing services, – new 
     • accounting services, – new 
     • financial audit services, – new and 
     • tax services. – new 

In order to get the facility, underlying transactions should be based on a written agreement between a domestic service provider and an overseas counter-party and the agreement should stipulate type, details and value of the agreed services; and supported by a proof of payment from the overseas counter-party to the VAT Entrepreneur. If these requirements are not satisfied the services will be subject to regular VAT at the rate of 10%. 

Furthermore, VAT Entrepreneur should prepare a specific VAT Invoice i.e. Export  Declaration of Taxable Services along with a sales invoice. In the case of taxable goods resulting from toll manufacturing services the VAT Entrepreneur should also prepare an Export Declaration of Goods based on the existing Customs regulations.