All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.
Sponsored

Indonesia introduces changes to VAT invoices and export duty

Sponsored by

sponsored-firms-gnv.png
cocoa-beans-373813.jpg

Benjamin Simatupang and Erviyanti of GNV Consulting provide a summary of developments concerning VAT invoices and export duty in Indonesia.

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.

Export duty and export duty tariffs

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.

Reference Price

PMK 39

PMK-123

Cocoa beans

Average price of cost insurance freight (CIF) price of cocoa at Intercontinental Exchange (ICE), New York

Average CIF price of cocoa from New York Mercantile Exchange (NYMEX); and

Price from the reference source exchange is based on the closing price (settlement price) for the nearest available month of delivery.

Palm oil, crude palm oil, and its derivative products

Average CIF price from Rotterdam, Malaysia exchange, and Indonesian exchange, with weightings of Rotterdam 20%, Malaysia 20%, and Indonesia exchange 60%

Free on board (FOB) price of crude palm oil from Indonesia exchange and Malaysia exchange, and CIF price from Rotterdam, less the insurance and freight costs.

Prices from the Indonesia exchange and Malaysia exchange are based on closing price (settlement price) for nearest available month of delivery; and

Price from Rotterdam is based on spot price for nearest available month of delivery.


more across site & bottom lb ros

More from across our site

The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.
Tax authorities and customs are failing multinationals by creating uncertainty with contradictory assessment and guidance, say in-house tax directors.
The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.
An OECD report reveals multinationals have continued to shift profits to low-tax jurisdictions, reinforcing the case for strong multilateral action in response.
The UK government announced plans to increase taxes on oil and gas profits, while the Irish government considers its next move on tax reform.
War and COVID have highlighted companies’ unpreparedness to deal with sudden geo-political changes, say TP specialists.
A source who has seen the draft law said it brings clarity on intangibles and other areas of TP including tax planning.
Tax consultants say companies must not ignore financial transactions in their TP policies as authorities, particularly in the UK, become more demanding.