Page 3 - Newsletter (The Criteria of Permanent Establishments and Tax Service Complaint Channels)

DDTC Newsletter Vol.01 | No.05 I April 2019 Page 3 of 6

The Criteria of Permanent Establishments and Tax Service Complaint Channels

are additional activities that facilitate essential and The Extension of Anti-Dumping
Import Duties of Biaxially Oriented
significant activities.
Essential and significant activities comprise 4 activities, Polypropylene Imports from Thailand
as below:
and Vietnam
1. are the core business or activities;
2. are inseparable from the core business or activities;
The government has extended the imposition of anti-
3. directly generate income; or
dumping import duties (bea masuk anti-dumping/
4. use a significant number of assets or human BMAD) on Biaxially Oriented Polypropylene (BOPP)
resources. imports from Thailand and Vietnam which have expired.
This is set forth in the Minister of Finance Regulation No.
Nonetheless, in the event that the foreign person or foreign
36 /PMK.10 /2019 (Mof Regulation No. 36/2019).
entity conducts preparatory or auxiliary activities for
other parties, the exemption provisions of the definition
Formerly, the minister of finance stipulated the
of a permanent establishment shall become invalid.
imposition of BMAD on BOPP imports through MoF
Regulation No. 1/PMK.010/2017 concerning the
As affirmed in Article 4 paragraph (3), the definition
Imposition of Anti-Dumping Import Duties on Biaxially
of business or activities stipulated in MoF Regulation
Oriented Polypropylene Imports from Thailand and
No. 35/2019 comprises everything that is conducted to
Vietnam.
obtain, collect, or maintain income
Such action is taken as based on the results of
A foreign person or a foreign entity that runs a business or
investigations by the Indonesian Anti-Dumping
carries out activities through a permanent establishment
Committee, dumping margins were still found for
is required to register to obtain a Taxpayer Identification
exporting companies/exporting producers from
Number (Nomor Pokok Wajib Pajak/NPWP). Such
Thailand and Vietnam hence in case of revocation of
obligation commences when the foreign person or
BMAD, the applicant’s losses will recur.
foreign entity conducts a business or conducts activities
through a permanent establishment in Indonesia.
By definition, dumping is trading politics carried out by
selling goods in foreign markets at lower prices than in
The registration is to be carried out no later than 1 (one)
the domestic market. To prevent losses from this practice,
month after the commencement of business or activities
the government is required to apply BMAD.
through a permanent establishment in Indonesia. In case
of a failure to do so, the Director General of Taxes may ex-
This is also in accordance with the provisions of
officio issue a Tax Identification Number for the foreign
Article 2 paragraph (1) of Government Regulation No.
person or foreign entity.
34 Tahun 2011 concerning Anti-Dumping Measures,
Countervailing, and Trade Safeguard Measures, which
Except for small entrepreneurs whose scope is
states that other than being subject to import duties,
determined by the Minister of Finance, a foreign person
imported goods may be subject to BMAD in the event
or foreign entity that runs a business or carries out
that the export prices of imported goods are lower than
activities through a permanent establishment must report
their normal values and result in losses.
his business to be confirmed as a Taxable Entrepreneur
(pengusaha kena pajak/PKP). MoF Regulation No. 36/2019 sets forth two types of
BOPP imports from Thailand and Vietnam that are
The obligation to report a business to be confirmed as a
subject to BMAD, namely:
Taxable Entrepreneur is to be carried out no later than
1. BOPP in the form of films included in HS Code
the end of the following month after the gross turnover
3920.20.10; and
and/or gross receipt exceeds the limits of small-scale
2. BOPP in the form of plates, sheets, foils, and other
businessmen of which the scope is determined by the
strips included in the HS Code ex. 3920.20.91 and
Minister of Finance.
ex. 3920.20.99.