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Indonesia: Tax round-up

Jeklira Tampubolon and Julius Wahyu Daryono of GNV Consulting Services summarise November’s tax-related developments in Indonesia.

Exhaust gas emissions to determine LGST rate on motor vehicles

On October 13 2019, the Indonesian government issued Government Regulation No. 73 of 2019 (GR-73) concerning taxable goods classified as luxurious in the form of motor vehicles which are subject to sales tax on luxury goods (LGST).

This GR-73 regulates that LGST is no longer determined by the shape of the vehicle body but rather by the amount of exhaust gas emissions or fuel consumption.

The important points of GR-73 can be summarised as follows:

  • Classification of motor vehicles for the transportation of passengers depends on the passenger capacity, the cylinder volume, or type of electric engine. The LGST rates for this category range from 15% to 70%.
  • Classification of double cab vehicles depends on the cylinder volume or type of electric engine. The LGST rates for this category range from 10% to 30%.
  • Classification of low carbon emission four-wheeled motor vehicles depends on the technology used in the vehicles. The technologies include full hybrid and/or mild hybrid technology, Flexy Engine (Bio Fuel 100) technology, plug-in hybrid electric vehicle technology, battery electric vehicles, fuel cell electric vehicles, and low-cost green cars. The LGST rates for this category range from 15% to 30%. The assessment bases for this class are also stipulated in the regulation.
  • Classification of other motor vehicle types made for specific purposes such as golf carts, special vehicles for traveling on snow, beaches, mountains, or similar vehicles; trailers, semi-trailers of the caravan type, for housing or camping; the rates range from 50% to 95%.
  • The following motor vehicles are exempted from LGST: ambulances, hearses, fire trucks, prisoner transport vehicles, public transport vehicles, vehicles for protocol purposes, and police/military service vehicles.

The previous regulation, Government Regulation No. 41 of 2013 (GR-41) has been revoked. This GR-73 becomes effective on October 16 2021 (two years from the announcement date).

Legislation passed on VAT refunds for tourists

The Indonesian government, through the Directorate General of Tax (DGT), has issued regulation No. PER-17/PJ/2019 (PER-17) concerning the procedures for registration and obligations of retail store VAT entrepreneurs (PKP) which participate in the VAT refund scheme for foreign tourists.

The important points of PER-17 can be summarised as follows:

  • Each retail store PKP that participates in the VAT refund scheme for tourists shall register on-line through the DGT website.
  • A retail store PKP must perform the following obligations:
  • Display the "tax-free shop" logo on its store;
  • Publish the information related to the VAT refund for tourists through flyers or social media;
  • Issue a 'specific VAT invoice' through the VAT refund for tourist applications for foreign tourists that apply for the VAT refund;
  • Provide the answers related to the correctness of data of specific tax invoices; and
  • Record the numbers, dates, and other data in the special tax invoice into the VAT refund for tourist application.
  • The issuance of a 'specific VAT invoice' should satisfy the following requirements:
  • VAT amount at least IDR 50,000 ($3.60)
  • The invoice must include the following information:
  • The tourist's passport number, which is entered in the taxpayer identification number column;
  • The complete address of the tourist as stated in their passport, which is entered in the buyer's address column; and
  • The cash register, payment receipt, or invoice number.

PER-17 became effective on October 1 2019 and revoked the previous regulation, PER-28/PJ/2013.

Regulatory changes concerning health-related social security

The President of the Republic of Indonesia has issued Presidential Regulation No. 75 of 2019 (Perpres-75) concerning the amendment of Presidential Regulation No. 82 of 2018 on health social security. There are several changes from the previous regulation, with the comparison shown in Table 1:

Table 1
Perpres No. 82/2018Perpres No. 75/2019Concerning
Article 29Contribution for participants receiving contribution assistance (PBI) and residents registered by the local government. Effective starting August 1 2019.
IDR 23,000IDR 42,000
Article 30Percentages of contributions for employees receiving wages (PPU).
3% paid by the employer4% paid by the employer
2% paid by the employee1% paid by the employee
Article 32Maximum limit for salary/wage as the basis for calculating PPU contribution.
IDR 8 millionIDR 12 million
Article 34Contribution of non-wage-receiving participants (PBPU) and non-employee (BP) participants. Effective from January 1 2020.
IDR 25,500 for class IIIIDR 42,000 for class III
IDR 51,000 for class IIIDR 110,000 for class II
IDR 80,000 for class IIDR 160,000 for class I

  • The new regulation raises the amount of employee contribution for the recipients of health social security. The PPU contributions are calculated from the standard of minimum salary or wages in the respective region;
  • The amended regulation also stipulates the calculation of PPU contribution for government officials and private employees, including the percentage and the maximum amount of income base; and
  • The new contribution amount for PPU participants who are assigned at central government institutions is effective from October 1 2019, while for PPU participants at regional government institutions and private employees it will become effective on January 1 2020.

Presidential Regulation No. 75 became effective on October 24 2019.

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