A Complete Guide to KITE (Kemudahan Impor Tujuan Ekspor) in Indonesia

KITE Indonesia supports manufacturers and exporters by reducing import costs and simplifying trade regulations. Indonesia has emerged as one of the key players in global trade, with its manufacturing and export sectors driving significant economic growth.  

However, businesses operating in these sectors often face challenges related to import duties, taxes, and regulatory complexities. Therefore, the government introduced the KITE Indonesia scheme to facilitate easier imports for export purposes.  

Understanding KITE Indonesia 

Kemudahan Impor Tujuan Ekspor (KITE) is a government incentive program for imported raw materials for export production. It supports Indonesian manufacturers and exporters by exempting or refunding import duties, VAT, and luxury goods tax (PPnBM). 

Types of Businesses Eligible for KITE 

• Manufacturing companies that export finished products. 
• Exporters engaged in processing imported raw materials. 
• SMEs (Small and Medium Industries) are involved in export-oriented production. 

The Purpose of KITE Indonesia 

The Indonesian government launched the KITE scheme to boost export competitiveness, encourage foreign investment, and enhance the overall efficiency of the manufacturing sector. It provides a strategic advantage by making it easier and more cost-effective for businesses to import raw materials and equipment needed for production. 

Key Benefits of KITE for Businesses 

KITE Indonesia helps manufacturers and exporters by cutting costs, simplifying import processes, and improving competitiveness in global markets. This government-backed initiative provides businesses significant financial and operational benefits, making it an important tool for export-oriented industries. 

Tax and Duty Exemptions 

Companies registered under KITE enjoy full exemptions from import duties, VAT, and other taxes on raw materials used for export production. This significant relief lowers production expenses and improves cash flow, providing financial security and allowing businesses to invest in growth and innovation. 

Simplified Import Process 

Under the KITE scheme, the import process becomes faster and more efficient. The government provides special facilities that allow export-oriented businesses to bring in raw materials with minimal bureaucracy and reduced processing time, ensuring that production runs smoothly without unnecessary delays. This efficiency promotes a sense of productivity and operational smoothness. 

Increased Competitiveness 

By lowering production costs and reducing import complexities, companies can offer products at more competitive prices in international markets. This advantage enables Indonesian manufacturers to expand their global reach and attract more buyers, fostering a sense of empowerment and competitiveness. 

Duty Refunds for Non-Exported Goods 

If imported goods cannot be exported for any reason, businesses can apply for a refund on import duties. This helps them manage costs effectively and minimize financial risks. This ensures flexibility and economic security for manufacturers dealing with fluctuating export demands. 

Processing and Packaging Flexibility 

Companies can process, modify, or repackage imported raw materials in Indonesia without incurring additional taxes as long as the final product is exported. This allows businesses to add value to their goods while maintaining cost efficiency. 

Government Support and Training 

Businesses with KITE permits receive strong government support, including access to training programs and simplified licensing procedures. These resources help manufacturers stay compliant with regulations while enhancing their operational efficiency. 

Types of KITE Facilities 

The KITE facility is divided into two main types, each offering different benefits for businesses involved in export-oriented production. These facilities help reduce costs by exempting or refunding import duties and taxes on raw materials used in manufacturing for export. 

KITE Exemption (KITE Pembebasan) 

This facility exempts import duties and VAT on raw materials brought into Indonesia for manufacturing, assembly, or processing, provided the final products are exported. This facility was initially regulated under PMK No. 254/PMK.04/2011 and later updated by PMK No. 176/PMK.04/2013. 

• Import duties and VAT are not charged on imported raw materials. 
• Companies must provide a guarantee covering the applicable taxes and duties at the time of import. 
• Once the processed goods are exported, the guarantee is refunded to the company. 
• This exemption applies to the Luxury Goods Sales Tax (PPnBM). 
• The facility also covers subcontracting activities, meaning raw materials sent for subcontracted work are not subject to VAT or PPnBM. 

KITE Repayment (KITE Pengembalian) 

The KITE Repayment scheme allows businesses to request a refund on import duties paid on raw materials used in exported products. KITE Repayment is regulated under PMK No. 253/PMK.04/2011. 

• Companies must initially pay import duties and related taxes when filing the Import Declaration (PIB). 
• After the exported goods are verified, the import duties are refunded to the company. 
• This repayment applies not only to standard import duties but also to additional charges such as: 
  • Retaliatory Import Duties 
  • Anti-Dumping Duties 
  • Safeguard Duties 
  • Countervailing Duties 

How to Apply for KITE Indonesia 

Businesses must complete a formal application process and obtain approval from the customs authority to benefit from KITE Indonesia. Below are the key steps: 

Obtain NIPER (Import-Export Business Identification Number) 

• Companies must first secure NIPER before applying for KITE. 
• This involves submitting business documents for customs to verify. 

Apply for KITE Facilities 

• After obtaining NIPER, businesses can apply for KITE Exemption or KITE Repayment based on their export activities. 
• KITE Repayment allows exporters to request a refund on import duties for goods exported as finished or semi-finished products. 

The application process requires careful documentation and compliance with regulations. To ensure a smooth approval process, it is highly recommended that you work with experienced incorporation and trade service providers like InCorp. 

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Leverage KITE Facilities with InCorp 

Obtaining KITE facilities requires careful compliance with customs regulations. Without expert guidance, navigating the application process, securing the proper permits, and ensuring smooth trade operations can be challenging. 

InCorp Indonesia (an Ascentium Company) can assist you with the KITE facility application and obtain the necessary import and export licenses to ensure your business runs smoothly and entirely complies with Indonesian trade regulations.  

Our experienced team understands the intricacies of the KITE scheme and can guide you through the application process, ensuring you obtain all necessary permits and licenses. 

• Import License: We help businesses obtain the proper import permits to bring raw materials and products into Indonesia legally. 
• Export from Indonesia: Our export assistance services ensure compliance with customs regulations and a smooth international shipping process. 

Fill out the form below to fully leverage KITE facilities and take your business to the next level.