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Indonesia: Interest rate changes for penalties wrap up a busy 2020

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Indonesia's Ministry of Finance had its busiest year on record

Benjamin Simatupang and Dwipa Abimanyu Dewantara of GNV Consulting discuss national tax developments on the stamp duty law, the treatment of luxury goods, and the import of COVID-19 vaccines.

Calculating interest rates for penalties and compensation

Following the issuance of the omnibus law, the calculation of interest penalty and interest compensation are changing.



On November 26 2020, the Ministry of Finance (MoF), issued Decision No. 540.KMK.010/2020 regarding the use of interest rates as the basis for calculating administrative penalty and interest compensation. These interest rates are applicable for the period from November 2 to November 30 2020.



The monthly interest rate are as follows:




Table 1: Administrative penalties

No

Clauses in law of general provisions and tax procedures

Monthly interest rate

1

Article 19 paragraph 1, Article 19 paragraph 2, and Article 19 paragraph 3

0.57%

2

Article 8 paragraph 2, Article 8 paragraph 2a, Article 9 paragraph 2a, Article 9 paragraph 2b, and Article 14 paragraph 3

0.99%

3

Article 8 paragraph 5

1.40%

4

Article 13 paragraph 2 and Article 13 paragraph 2a

1.82%


Table 2: Interest compensation

Clauses in law of general provisions and tax procedures

Monthly interest rate

Article 11 paragraph 3, Article 17B paragraph 3, Article 17B paragraph 4, and Article 27B paragraph 4

0.57%

The authority to determine monthly interest as the basis for calculating administrative penalties of interest and interest compensation for subsequent periods is delegated as a mandate to the head of the Fiscal Policy Agency, for and on behalf of the minister of finance.

Taxing the import of COVID-19 vaccines

On November 26 2020, the MoF issued Regulation No. PMK-188/PMK.04/2020 (PMK-188), which acts as the Directorate General of Customs and Excise’s (DGCE) tax position for handling the COVID-19 pandemic. The main points of PMK-188 are summarised below.



The ‘vaccine’ refers to a vaccine, vaccine raw materials and equipment needed in vaccine production, as well as equipment for the implementation of vaccinations in the context of handling the pandemic. 


Table 3

No

Granting of facilities

Import (bonded logistics centre)

Outgoing (Other places within the customs area)

1

Exemption from import duty and/or excise;

2

Excluded from obligation to pay taxes in the context of import

3

VAT or VAT and sales tax on luxury goods is not collected

4

Excluded from the obligation to settle VAT or VAT and sales tax on luxury goods

5

Exempted from collection of Article 22 income tax on imports


The facilities can be used only for:

  • Central government;

  • Regional governments; and

  • Legal entities or non-legal entities that receive an assignment or appointment from the Ministry of Health.

  • This regulation became effective on November 26 2020.


Stamp duty law

On October 26 2020, the Law of the Republic of Indonesia No. 10 of 2020 concerning stamp duty was promulgated. Previously, on September 29 2020, the House of Representatives approved the draft bill on stamp duty as an amendment.



1.   Stamp duty rate will be a single rate of IDR 10,000 (approximately $0.72);

2.   Stamp duty payable will expire after a period of five years from the time it is payable; and

3.   Law No. 10 of 2020 will become effective on January 1 2021.

Taxing luxury goods

On October 16 2020, the Indonesian government issued Regulation No. 61 of 2020 regarding taxable goods classified as luxury goods, other than motorised vehicles that are subject to sales tax on luxury goods



Tariffs and objects of taxable luxury goods other than motor vehicles subject to sales tax on luxury goods are as follows:



The rate is set at 20% for the following objects:

1. Luxury home;

2. Apartment;

3. Condo; and

4. Town houses and similar buildings. 



The rate is set at 40% for the following objects:

1. Groups of air balloons and air balloons that can be steered, other aircraft without propulsion; and

2. Groups of firearms bullets and other firearms, except for state purposes. 



The rate is set at 50% for the following objects:

1. Groups of aircraft other than those referred to above, except for state needs or commercial air transportation; and

2. Groups of firearms and other firearms, except for state purposes. 



The rate is set at 75% for the following objects:

1. Cruise ships, excursion boats and similar vessels principally designed for the transport of persons, ferries of all types, except for the benefit of the state or public transport; and

2. Yachts, except for state purposes, public transportation, or tourism businesses.



Regulation No. 61 of 2020 will become effective 60 days after its enactment date, i.e. on December 14 2020.





Benjamin Simatupang

Partner, GNV Consulting

E: benjamin.simatupang@gnv.id



Dwipa Abimanyu Dewantara

Manager, GNV Consulting

E: dwipa.dewantara@gnv.id

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