Page 4 - Newsletter (Changes in The Taxation Provisions of International Trade and Digital Economy)

DDTC Newsletter Vol.01 | No.04 I April 2019 Page 4 of 6

CHANGES IN THE TAXATION PROVISIONS OF INTERNATIONAL TRADE AND
DIGITAL ECONOMY

Table 2 – The Comparison of BMAD Provisions for H Section Efforts to Increase the Competitiveness
and I Section Products of Service Export through VAT Policies
No Comparison MoF Regulation MoF Regulation
No. 242/2015 No. 24/2019
The government has officially extended the imposition
of 0% on Value-Added Tax (VAT) on service exports. This
1 BMAD rate. 11.93% 11.93%
is regulated in MoF Regulation No. 32/PMK.010/2019
concerning the Limitations of Activities and Types of
2 HS Code of H 7216.33.00.00 7216.33.11 and Taxable Services of which the Exports are Subject to
4
Section products 7216.33.19
VAT (MoF Regulation No. 32/2019). This regulation was
imposed with
signed by the Minister of Finance, Sri Mulyani Indrawati
BMAD.
and promulgated on 29 March 2019. The regulation
3 HS Code of I 7216.32.00.00 7216.32.10 and was issued with the intention to improve the economic
Section products 7216.32.90.
growth by encouraging service exports and increasing the
imposed with
competitiveness of the national service industry.
BMAD.
The types of Taxable Services (Jasa Kena Pajak/JKP)
Table 3 – The Comparison of HS Code Subject to BMAD for subject to 0% rate were previously regulated by MoF
Flat-rolled Products from Iron or Non-Alloy Steel Regulation Number 70/PMK.03/2010 concerning the
No Comparison MoF Regulation MoF Regulation Limitations of Activities and Types of Taxable Services of
No. 242/2015 No. 24/2019 which the Exports are Subject to VAT (MoF Regulation No.
70/2010) as amended by the MoF Regulation Number
1 Flat-rolled 7208.10.00.00; 7208.10.00; 30/PMK.03/2011 concerning the Amendments to the
Products of Iron 7208.25.00.00; 7208.25.00; MoF Regulation Number 70/PMK.03/2010 concerning
or Non-alloy Steel 7208.26.00.00; 7208.26.00; theLimitations on Taxable Activities and Service Types
HS Code. 7208.27.10.00; 7208.27.11; of which Exports are Subject to VAT (MoF Regulation No.
7208.27.90.00; 7208.27.19; 30/2011).
7208.36.00.00; 7208.27.91;
7208.37.00.00; 7208.27.99;
7208.38.00.00; 7208.36.00; Based on the previous regulation, only three types of
7208.39.00.00; 7208.37.00; taxable services were subject to a 0% rate, namely
and ex. 7208.38.00; tolling manufacturing services, repair and maintenance
7208.90.00.00. 7208.39.10;
services of movable property, and construction services.
7208.39.90;
In addition to the three types of services, the supply of
ex.7208.90.10;
taxable services outside the customs area (VAT territorial
ex.7208.90.20;
and scope) was regulated through the Director General of
ex.7208.90.90. Taxes Circular Number SE-49/PJ/2011 concerning the
Submission of MoF Regulation Number 30/PMK.03/2011
automatic basis. Meanwhile, a reportable jurisdiction is concerning the Amendments to MoF Regulation Number
participating jurisdiction which is the destination for the 70/PMK.03/2010 concerning the Limitations on Taxable
Indonesian government to carry out the obligation to Activities and Service Types of which Exports are Subject
deliver financial information on an automatic basis.The to VAT.
new list contains eight jurisdictions that are also included
on the EU tax haven blacklist. Such jurisdictions are Under the latest regulation, the government divides
obliged to provide financial information to the Indonesian services (service activities) which are subject to 0% VAT in
authorities. Those jurisdictions are Samoa, Aruba, three categories. First, activities with respect to movable
Barbados, Belize, Bermuda, Marshall Islands, United Arab property utilized outside the customs area. Second,
Emirates, and Vanuatu. Of these eight countries, reciprocal activities with respect to immovable property outside the
exchanges only apply to Samoa, Aruba, Barbados, Belize, customs area.
and Vanuatu. Thus, Indonesia is not obliged to supply
financial information of citizens of Bermuda, Marshall Third, other activities of which results are supplied to be
Islands, and the United Arab Emirates residing in utilized outside of the customs area by direct/indirect
Indonesia. 4 supply (including through post and electronic channels)
or in the form of providing rights of access outside the
customs area. Further information regarding the type of
taxable services subject to a 0% rate is indicated in Table 4.

Ideally, all exports of taxable services should be subject
4 Harmonized System (HS)