Indonesia introduces changes to VAT invoices and export duty

The Directorate General of Taxation (DGT) issued Regulation No. PER-03/PJ/2022 (PER-03) regarding VAT invoices in March 2022. PER-03 requires that VAT invoices to a centralised VAT-able firm (Pengusaha Kena Pajak/PKP) should be addressed to the location of delivery, while the name and tax ID number are those of the centralised PKP.

Previously, the VAT invoice was addressed to the centralised PKP. However, it is not clear from PER-03 whether this requirement applies to all taxpayers or only to certain taxpayers.

On August 4 2022, the DGT issued Regulation No. PER-11/PJ/2022 (PER-11) to update PER-03. PER-11, effective from September 1 2022, restricts the requirement to be applicable only to delivery to a branch of a PKP that is registered with a large taxpayer tax office, special Jakarta tax office, or medium tax office that fulfills the following criteria:

• The branch is located in a ‘certain area’ consisting of:

• A bonded storage area;

• A special economic zone; and

• Other areas governed by non-collection of VAT and sales tax on luxury goods (STLG) arrangement.

• The delivery is eligible to enjoy the facility of non-collection of VAT and STLG.

For transactions that do not fall under such restrictions, VAT invoicing must use the address of the centralised PKP.

Article 37, paragraph 2 of PER-11 also confirms that a VAT invoice or certain document that is equivalent to a VAT invoice is creditable provided it meets the requirement to credit input VAT.

Furthermore, there is a transitional provision in Article 38A which provides relaxation whereby a VAT invoice issued in accordance with PER-03 to a centralised PKP between April 1 2022 and August 31 2022 remains valid provided it meets the creditable input VAT requirements.

The Ministry of Finance (MoF) issued Regulation No. 123/PMK.010/2022 (PMK-123) regarding the second amendment to MoF Regulation No. 39/PMK.010/2022 (PMK-39) concerning the determination of export goods subject to export duties and export duty tariffs. PMK-123 became effective from August 9 2022.

For the first amendment of PMK-39, please refer to our previous article.

The highlights of the changes under PMK-123 are as follows:

• Changes on the determination of export duty tariffs on export goods in the form of palm oil, crude palm oil, and its derivative products; and

• Reference prices are determined by the minister who carries out government affairs in the trade sector.

Changes in reference price between PMK-39 and PMK 123 are shown in the table.