Service agreement in Indonesia: Template, Key Clauses and Local Law (2026)

What is a service agreement in Indonesia, and when do you need one? A service agreement in Indonesia is a contract where one party (the provider) performs defined services for another (the client) in return for payment. You need one whenever services are the main thing being bought: IT and software support, marketing, logistics, facilities, outsourced functions, or ongoing work run through a master service agreement with separate statements of work. It is close to a consultancy agreement but is usually written between companies and for recurring or larger-scale work. The agreement rests on the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata), which lets parties set their own terms so long as there is lawful consent, a defined subject and a lawful cause, and makes a valid contract binding as law between them. Three local rules shape the document. First, under Law No. 24 of 2009 an agreement with an Indonesian party should be in the Indonesian language, bilingual where English is also needed, because Indonesian courts have held English-only contracts with an Indonesian party unenforceable. Second, service fees attract withholding tax, generally Article 23 income tax for a domestic provider and Article 26 for a foreign provider. Third, value added tax (PPN) applies to most services supplied by a registered taxable entrepreneur, so the agreement should say whether fees include it. This article is general guidance, not legal advice. Have an Indonesian lawyer and tax adviser review a service agreement before you rely on it. Last verified October 2026. ## Indonesia service agreement template Copy the block below and fill the bracketed fields. For recurring work, keep clauses 1 to 11 as a master agreement and attach each piece of work as a statement of work. Issue it in Bahasa Indonesia, or bilingual with Bahasa prevailing. ```

SERVICE AGREEMENT / PERJANJIAN JASA This Service Agreement (the "Agreement") is made on [DATE] BETWEEN: [CLIENT NAME], a company at [address] (the "Client") AND [PROVIDER NAME], a company at [address], NPWP [tax number] (the "Provider") 1. SERVICES The Provider performs the services in Schedule 1 or in each statement of work agreed under this Agreement (the "Services"). 2. SERVICE LEVELS The Provider meets the standards and timelines in Schedule 2. 3. FEES AND TAX The Client pays the fees in Schedule 3, invoiced [schedule] and due within [N] days. Fees are [exclusive] of VAT (PPN), which the Provider adds where registered. The Client withholds Article 23 income tax from a domestic Provider (or Article 26 from a foreign Provider) and remits it. 4. CLIENT RESPONSIBILITIES The Client gives the Provider the access, information and approvals the Services reasonably need, on time. 5. INTELLECTUAL PROPERTY Deliverables created for the Client belong to the Client on full payment; the Provider assigns those rights and keeps its pre-existing and generic tools, which it licenses for use in the deliverables. 6. CONFIDENTIALITY AND DATA Each party keeps the other's information confidential and uses it only for this Agreement. Where personal data is processed, the parties comply with the Personal Data Protection Law and set out their roles. 7. WARRANTIES The Provider warrants that it performs with reasonable skill and care and that the Services conform to Schedules 1 and 2. 8. LIABILITY To the extent the law allows, each party's total liability is capped at [the fees paid in the prior 12 months], and neither party is liable for indirect or consequential loss. 9. TERM AND TERMINATION The Agreement runs from [START] for [term] and renews [terms]. Either party may end it on [N] days notice, or at once for material breach not cured within [N] days. Fees earned to the end date remain payable. 10. FORCE MAJEURE Neither party is liable for delay caused by events beyond its reasonable control, and the affected party will mitigate. 11. GOVERNING LAW AND LANGUAGE This Agreement is governed by Indonesian law and made in the Indonesian language [and English, with the Indonesian version prevailing]. Signed: Client: __________________ Provider: __________________ Name / title / date Name / title / date

- **Fees and tax (clause 3).** State whether fees include VAT (PPN). Withhold Article 23 income tax on a fee to a domestic provider and Article 26 on a fee to a foreign provider, then remit and issue the slip. Getting these wrong leaves the paying party exposed, so confirm current rates with a tax adviser.
- **Intellectual property (clause 5).** Assign commissioned deliverables on payment and let the provider keep its generic tools and know-how.
- **Confidentiality and data (clause 6).** Where personal data is handled, the Personal Data Protection Law (Law No. 27 of 2022) applies, so set out each party's role.
- **Language (clause 11).** Issue in Bahasa Indonesia or bilingual. An agreement with an Indonesian party that exists only in English is at risk of being held unenforceable. ## Key local-law points - **Valid-contract requirements.** The Civil Code requires lawful consent, a defined subject and a lawful cause; a contract missing these can be void or voidable.
- **Language.** Law No. 24 of 2009 requires an agreement with an Indonesian party to be in Bahasa Indonesia, and courts have voided English-only contracts. Use a bilingual document with Bahasa prevailing.
- **Taxes.** Service fees attract Article 23 or Article 26 withholding, and VAT (PPN) applies to most services from a registered taxable entrepreneur. Confirm the current VAT rate and withholding rates, because they have changed recently.
- **Sector and outsourcing rules.** Outsourcing of certain functions and regulated services (finance, telecoms, data) carry extra requirements beyond the contract. ## Red flags to avoid - A scope that states the goal but not the limits, so every extra request becomes a dispute about whether it was included.
- An English-only agreement with an Indonesian party, which risks unenforceability.
- Fees silent on VAT and on Article 23 or Article 26 withholding, leaving the parties to argue over who bears the tax.
- No IP assignment on deliverables the client assumes it owns.
- Auto-renewal with no reminder, so the agreement rolls over before anyone decides whether to continue. Get scope, language, tax treatment, IP and liability right, and the template above will carry most Indonesian service engagements. ## Where a contract workspace helps A template gives you one sound service agreement. The real workload is everything around it: aligning each statement of work with the master terms, keeping bilingual versions matched, keeping the VAT and withholding wording consistent across providers, and catching renewal and notice dates before they pass. Drafting from a standard shaped to how your company buys services, having the risky clauses flagged as you review, and tracking every term and renewal can sit in one AI contract workspace rather than spread across files and inboxes. [Adira](https://adiralaw.com) is one such workspace. Its established depth today is in Indian corporate law, so Indonesian specifics are a roadmap capability rather than settled, and local output should be reviewed by an Indonesian adviser. The idea holds on its own: when drafting, review and tracking share one place, scattered service contracts stop being a source of surprises.