Indonesia: Changes to tariffs, reporting and tax rates
Charles Oetomo and Welly Armantha Napitupulu of GNV Consulting round up recent tax-related announcements from the Indonesian government including those affecting electric-based vehicles, construction services, luxury sales, VAT and biodiesel exports.
The Minister of Finance (MoF) has set out a tariff of 0% import duty on the import of electric-based vehicles in the form of incompletely knocked down products (MoF Regulation No. 13/PMK.010/2022).
This regulation has been issued to encourage the increase in added value of assembly of the industry of motor vehicles with four or more wheels, in accordance with the needs of the development of the four-or-more-wheeled motor vehicle industry, and to accelerate the battery-based electric motor vehicle programme for road transportation.
The lower final tax rate on construction service with relevant qualification has been released through Government Regulation No. 9 of 2022 (GR/9-2022) as the second amendment of Government Regulation No. 51 of 2008.
This regulation provides legal certainty and ease in the imposition of income tax on income from the construction-service business. To keep the business climate of the construction services sector conducive, it is necessary to adjust the arrangement regarding income tax on income from construction-service business.
By announcement letter No. PENG-5/PJ.09/2022, the Directorate General of Tax has stopped the annual tax return (SPT) reporting channel through the E-SPT application.
For SPT 1770 S, 1770, and 1771, this applies from February 28 2022, at 16.00 Western Indonesian time. For the corporate income tax return form in US dollars (1771$) and the special appendix for oil and gas taxpayers, it applies from March 30 2022 at 15.00 Western Indonesian time.
Free trade area
By announcement letter No. PENG-4/PJ.09/2022, the Directorate General of Tax emphasised that the implementation of the Notification of Acquisition or Expenditure of Taxable Goods or Taxable Services in the Free Trade Area and Free Port document should be conducted through the Indonesia National Single Window System.
Luxury sales tax, VAT and import declaration
By MoF regulation No. 5/PMK.010/2022, the MoF has stipulated the luxury sales tax borne by the government for fiscal year 2022 and for certain motor vehicles.
Through MoF regulation No. 6/PMK.010/2022, the MoF has stipulated the value added tax (VAT) borne by the government for fiscal year 2022 on the delivery of certain houses and apartments.
The MoF has issued the Procedures for Filing Request and Determination of the Origin of Import Goods before Import Declaration, through the MoF regulation No. 7/PMK.010/2022.
A regulation (Update on Export Policy – Suspension of Export Permits Imposed on Certain Biodiesel Products, under tariff of 3826.00.21, 3826.00.22, 3826.00.90) is set out in the Minister of Trade regulation No. 8 of 2022.
This regulation is issued to optimise the availability of cooking oil raw materials and cooking oil. To achieve this, it is necessary to rearrange the policies and regulations for the export of crude palm oil; refined, bleached and deodorized palm olein; and used cooking oil.
Partner, GNV Consulting
Welly Armantha Napitupulu
Senior manager, GNV Consulting