Indonesia issues guidance for collecting VAT on the delivery of LPG
From COVID-19 recovery plans to VAT guidance, I Dewa Made Agung Nugraha and Dwipa Abimanyu Dewantara of GNV Consulting summarise the tax-related developments from early 2021 in Indonesia.
VAT on the delivery of liquefied petroleum gas
The Ministry of Finance (MoF) issued Regulation No. 220/PMK.03/2020 on December 28 2020, regarding the procedures for calculating and collecting VAT on the delivery of certain liquefied petroleum gas (LPG). The regulation has been effective starting from that date.
The regulation governs the following points:
1. The delivery of certain LPG by a taxable entrepreneur is subject to VAT;
2. The government shall bear the VAT on the delivery of certain LPG for the portion of price subsidised by the government;
3. The buyer shall be liable to pay VAT on the delivery of certain LPG for the portion of the price that is not subsidised by the government.
The VAT payable is 10% from the VAT base. The treatment of the input VAT related to the delivery of certain LPG shall be as follows:
The regulation governs the following points:
For a company with a LPG business license a input VAT can be credited;
For a LPG agent and sub-agent a input VAT cannot be credited.
Tax facilities impacted by COVID-19
The MoF has issued Regulation No. 239/PMK.03/2020 regarding the tax facilities for goods and services required in the handling of the COVID-19 pandemic.
The key changes are as follows:
PMK-239 adds VAT facilities for supporting equipment used in the vaccination programme and other supporting services;
Letters of recommendation for the pharmaceutical Industry for the production of vaccines and/or medicines, previously issued by the National Disaster Management Agency (BNBP), will be issued by the Ministry of Health;
Tax facilities for VAT, Article 22 Income Tax, and Article 23 Income Tax are effective for January 2021 to December 2021 tax periods;
Tax facilities for Article 22 Income Tax and Article 23 Income Tax, which require a tax exemption certificate, are effective from the issuance date of the tax exemption certificate until December 31 2021;
The following income tax reliefs for handling COVID-19, as stipulated in Government Regulation No. 29 of 2020, are extended from January 1 2021 until June 30 2021:· Additional deduction for taxpayers producing certain medicalequipment and/or household health supplies;
Additional deduction for donations to certain institutions;
Final income tax rate of 0% for qualifying individuals providing health services; and
Final income tax rate of 0% on compensation for the use of assets to support health services; and
The tax relief for share buy-backs by taxpayers listed on the Indonesian Stock Exchange is not extended per PMK-239, which has been effective starting from January 1 2021.
Unified income tax returns
On December 28 2020, the Directorate General of Taxes (DGT) issued Regulation No. PER-23/PJ/2020, regarding forms and procedures for the production of unified proof of withholding/collection and form, content, and procedures for filling in and submission of unified income tax returns.
1. Unified periodic income tax return is a periodic tax return used by a withholding tax (WHT) collector to report the withholding obligation and/or collection of WHT, deposits for withholding and/or collection of income tax, and/or self-payment of several types of income tax in one tax period;
2. Documents unified proof of withholding/collection are documents in the form of paper forms or electronic documents containing data or information on withholding or collection of certain income tax;
3. Corrected unified proof of withholding/collection is unified evidence made to correct mistakes in filling out the proof of withholding/collection; and
4. Cancellation of unified proof of withholding/collection is unified evidence that is made to cancel the unified proof of withholding/collection.
Proof of settlement of underpaid stamp duty
In connection with the issuance of DGT Regulation No. PER.01/PJ/2021, the DGT has issued Circular Letter No. SE-01/PJ/2021 (SE-01/2021) in order to provide guidelines for the implementation instruction on affixing proof stamp for settlement of the payable stamp duty.
A request for affixing stamp for proof of settlement of underpaid stamp duty shall be made in the event that there is a difference in amount for the payment of stamp duty by using a tax payment slip (SSP).
The completed request form will be assigned by the Head of the Service Section to ensure:
The correctness of SSP that has obtained NTPN;
The conformity of the payment value in the SSP;
The conformity in the serial number of the check and/or clearing-account letter listed in the SSP; and
The conformity of the tax account code and deposit type code, namely tax account code is 411611 and deposit type code is 100.
This regulation became effective on January 8 2021.
I Dewa Made Agung Nugraha
Partner, GNV Indonesia
Dwipa Abimanyu Dewantara
Manager, GNV Indonesia