Taxation changes for Indonesia
Endy Arya Yoga and Irma Batubara of GNV Consulting Services provide an update of tax developments in Indonesia.
Certificate of domicile verification in tax audits and tax objection
The Director General of Tax issued Circular Letter No. SE-35/PJ/2021 on May 31 2021 regarding ‘Guidance on Implementation of Verification of Certificate of Domicile (CoD) during the processes of Tax Audit, Tax Objection, and Reduction or Revocation of Tax Assessment Notices’.
This regulation is to confirm that the CoD of a foreign taxpayer, provided during the abovementioned process, can still be considered as the basis for application of the provisions in a tax treaty. The verification process on the CoD should fulfill both the formal requirements (as set in PER-25/PJ/2018) and material requirements.
Exporters and importers with good reputation
The Minister of Trade issued Regulation of Minister of Trade No. 17/2021 on April 1 2021 stipulating criteria for exporters and importers with good reputation, effective from June 1 2021.
The provisions can be obtained by submitting an online application for exporters and importers meeting certain requirements, or already obtained acknowledgement as Authorised Economic Operators or Principal Customs Partners (MITA) from the Director General of Custom or Excise or the Primaniyarta Award from the Minister of Trade starting from Year 2018.
This provision enables exporters and importers to gain an application approval for restricted exports and imports and to remove the surveyor report requirements for commodities.
Self-reporting on land and building tax
On May 17 2021, the Minister of Finance of the Republic of Indonesia issued Minister of Finance Regulation No. 48/PMK.03/2021 regarding the procedure for registration, reporting and data collection on objects of land and building tax (PBB) for the plantation, forestry, oil and gas mining, mining for geothermal and mineral/coal mining and other sectors, effective from July 16 2021.
Previously, for PBB, the tax office sent a tax object notification letter (SPOP) to the tax subject or taxpayer, which must be completed and returned to the tax office. The tax office would then determine the amount of the NJOP (assessed property value).
In PMK-48, the taxpayer, in the business sectors outlined above, must register tax objects, via an online or written application, to be provided with a land and building tax registration notification letter (SKT PBB).
In the event that a taxpayer does not register an application, the head of the tax office will issue a SKT PBB ex officio based on an audit or administrative verification.
Legal services for micro and small enterprises
The Minister of Finance has issued Regulation No. 49/PMK.02/2021 regarding Types and Rates of Non-Tax State Revenue applying in the Directorate General of General Legal Administration of the Ministry of Law and Human Rights (PMK-49), effective from May 10 2021.
PMK-49 is intended to support ease of business and simplification of investment and business activity for micro enterprises and small enterprises, that have a maximum working capital of between IDR1 billion (approximately $69,275) and IDR5 billion. The relevant rate for certain types legal service assistance ranges from IDR50,000 to IDR1 million.
Endy Arya Yoga
Partner, GNV Consulting Services
Director, GNV Consulting Services