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Indonesia’s Minister of Finance has a proactive start to 2020

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Indirect tax has been the focus for Indonesia in early 2020.

Ahdianto and Welly Armantha Napitupulu of GNV Consulting Services summarise five key tax-related developments from early 2020 in Indonesia.

The crediting of input VAT in a different tax period

On January 21 2020, the Director General of Tax (DGT) issued Circular Letter No. SE-02/PJ/2020 regarding the crediting of input VAT in a different tax period (SE-02). 

The DGT issued SE-02 in order to provide confirmation regarding the mechanism for crediting input VAT in a different tax period, as regulated by Article 9 paragraph 9 of the VAT law. Disputes over crediting input VAT in a different tax period have previously commonly arisen from the supposed vagueness of the law. 

In the past, there have been many cases in the event of a tax audit, whereby crediting input VAT in a different tax period, through the revision of VAT returns, was not acceptable to the tax auditors. In such cases, the auditors maintained that the crediting of input VAT in a different tax period could only be done through submission of a normal VAT return.

The elucidation of Article 9 paragraph 9 of the VAT law should no longer be open to different interpretations, as SE-02 has provided a confirmation on this issue in its examples of cases. 

The key points that confirmed by SE-02 are as follows:

  • Input VAT can be credited against the output VAT in the same period;

  • Input VAT that is creditable but has not been credited against output VAT in the same period, can be credited in the next tax period for no more than three months after the end of the relevant tax period. In the event that this three-month period has expired, the input VAT can be credited through the revision of the VAT return concerned;

  • This provision is also applied to certain documents that are treated as equivalent to a VAT invoice;

  • Crediting input VAT can only be done if:

    • The input VAT has not been charged as a cost and has not been capitalised in the acquisition cost of the relevant taxable goods or taxable services;

    • The VAT-able entrepreneur has not been audited by the tax authority.

Customs Declarations

On December 27 2019, the Minister of Finance (MoF) issued regulation No. 201/PMK.04/2019 regarding customs declarations (PMK-201). It is the third amendment of MoF regulation No. 155/PMK.04/2008, as most recently amended by MoF regulation 104/PMK.04/2018.

This PMK-201 is issued in order to carry out the action plan of integration and synchronisation of data on strategic food imports, such that it is a necessary to simplify the procedure for determining the types of unit of measurement (UoM) of goods used in the customs declaration for certain commodities.

The type of UoM will be determined by the Director General of Customs and Excise on behalf of the MoF.

PMK-5 is effective since January 26 2020.


Provisions on customs, excise and tax on import of parcels

On December 26 2019, the MoF issued a new regulation regarding the provisions on customs, excise and tax on import of parcels (PMK-199). PMK-199 is issued in order to revoke the previous MoF regulation No. 182/PMK.04/2016, as most recently amended by 112/PMK.04/2018.

This was issued in order to protect the national interest in connection with the increasing volume of imported goods through the mechanism of the import of parcels and to encourage the growth of domestic industries.

The major changes of this PMK-199 are as follows:

     

No 



1

Import of parcel, in terms of:  



Goods to be used

   PMK-199 (new) 

  PMK-112 (previous)

 

 

 

 

 

a. Threshold

FOB USD 3.00

FOB USD 75.00

 

b. Tax implication:

 

 

 

     - Import duty

Exempted

Exempted

 

     - VAT and/or LST

Collected

Collected

 

     - Income tax

Not collected

Collected

 

 

 

 

2

Letters, postcards and documents

 

 

 

a. Threshold

n/a

n/a

 

b. Tax implication:

 

 

 

     - Import duty

Exempted

Silent

 

     - VAT and/or LST

Not collected

Silent

 

     - Income tax

Not collected

Silent

 

 

 

 

3

Excisable goods

 

 

 

a. Threshold

 

 

 

   - cigarettes

40 sticks

40 sticks

 

   - cigars

5 sticks

10 sticks

 

   - sliced tobacco

40 gr

40 gr

 

   - other tobacco product:

 

40ml

 

     (-) in form of sticks

20 sticks

 

 

     (-) in form of capsules

5 capsules

 

 

     (-) in form of liquid

30 ml

 

 

     (-) in form of cartridge

4 cartridge

 

 

     (-) in other forms

50 gr or 50 ml

 

 

   - ethyl alcohol

350 ml

350 ml

 

 

 

 

This PMK-199 is effective since 30 January 2020.

Simplification of customs registration

On December 31 2019, the MoF issued a new regulation regarding the simplification of customs registration (PMK-219). This was issued in order to revoke the previous MoF regulation No. 179/PMK.04/2016.

The simplification is caused by the integration of the Online Single Submission (OSS) system into the Indonesia National Single Window (INSW) portal system.

The new change in this PMK-219 relates to limited temporary unblocking (Pembukaan Pemblokiran Sementara Terbatas or PPST), which can be done with the following conditions:

• The goods to be imported have been loaded to the transportation facility in the country of loading port, which is proven by shipping documents that were issued before the date of the blocking; or

• The goods to be exported are ready to be exported, which is proven by export documents (shipping/flight documents) that were issued before the date of the blocking;

• PPST is granted for a maximum of 30 (thirty) days from the date of approval of unblocking.

This PMK-219 is effective since January 30 2020.




VAT and LST treatment on the import of taxable goods exempted from collection of import duty

On December 23 2019, the MoF issued regulation No. 198/PMK.010/2019 regarding VAT and luxury-goods sales tax (LST) treatment on the import of taxable goods exempted from the collection of import duty (PMK-198). PMK-198 is the seventh amendment of MoF regulation No. 231/KMK.03/2001, as most recently amended by MoF regulation 137/PMK.0l0/2018.

The new change in PMK-198 is as follows:

The import of taxable goods, which is exempted from import duty and granted non-collection of VAT and/or LST, is also applied to goods in the context of a coal mining concession that is entered into by a contractor in the coal concession with the following conditions:

1. The contract was signed before 1990;

2. The contract includes provisions regarding the granting of exemption or relief of import duties on imported goods in the framework of the coal mining cooperation;

3. The contract does not contain provisions regarding the period for granting exemption or relief of import duties; and

4. The imported goods are state property.

This PMK-198 is effective since December 31 2019.



Ahdianto 

T: +62 21 2988 0681

E: ahdianto@gnv.id



Welly Armantha Napitupulu

T: +62 21 2988 0681

E: welly.napitupulu@gnv.id




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