Page 2 - Newsletter (Tax Incentives for Transportation Sector, Sanction for Customs, and Target of Extensification)

DDTC Newsletter Vol.02 | No.01 I July 2019 Page 2 of 6

TAX INCENTIVES FOR TRANSPORTATION SECTOR, SANCTION FOR CUSTOMS,
AND TARGET OF EXTENSIFICATION

Tax Facility for Transportation Sector However, this non-collected VAT could still be payable
to Be Non-Collected of VAT if within four years since the import activity and/or
acquisition, there are either or one of following two
conditions occur: the utilization of the equipment is not
The government of Indonesia has once again stipulated in line with the original purpose and/or there is product
new incentive for transportation sector. The tax facility
transfer to another party, either part or whole of the
is that the sector becomes non-collected of Value Added product.
Tax (VAT). This is as regulated in Government Regulation
Number 50 of 2019 concerning Import and Transfer of
This provision would not be applicable in case the
Certain Transportation Equipment and Transfer and the
product transfer is performed due to force majeure. In
Utilization of Taxable Services Regarding Transportation
addition, the amount of VAT that has been paid due to
Equipment That Is Non-Collected of VAT (Government
this condition cannot be credited and must be paid one
Regulation No. 50/2019). This provision replaces
month at the latest since the change of transportation
Government Regulation Number 69 of 2015 (Government
equipment function or its transfer. More detail regarding
Regulation No. 69/2015).
the requirements and procedures of import and the
transfer of certain transportation equipment that are
The consideration of this regulation issuance is to
non-collected of VAT will be regulated in Minister of
strengthen competitiveness of land, water and air Finance Regulation (MoF Regulation).
transportation industry and ensure the availability of
adequate defence and security equipment. In addition,
this regulation is aimed to give law certainty in giving The Revocation of Implementing
facility regarding non-collection of VAT for certain Rules on Instalment Calculation of
transportation equipment and related services for certain
transportation equipment mentioned in the regulation. Income Tax Article 25 for Certain
Individual Entrepreneurs
There are four criteria of transportation equipment and
related services of transportation equipment regulated
The DGT has stipulated new regulation in the beginning
in the provisions, which are as follows:
of July 2019 regarding Directorate General of Taxes
1. Certain transportation equipment of which import Regulations Number PER-14/PJ/2019 (PER-14/
is non-collected of VAT; PJ/2019). This regulation contains the revocation of
Directorate General of Taxes Number PER-32/PJ/2010
2. Certain transportation equipment of which transfer
concerning The Implementation of the Imposition of
is non-collected of VAT;
Income Tax Article 25 to Individual Taxpayers Who Are
3. Taxable Services (Jasa Kena Pajak/JKP) related to
Certain Entrepreneurs (PER-32/PJ/2010).
certain transportation equipment of which transfer
is non-collected of VAT; and
The PER-32/PJ/2010 itself was implementing rules
4. Taxable services from abroad related to certain of Minister of Finance Regulation Number 208/
transportation equipment of which the utilization is PMK.03/2009 concerning the Calculation of Income Tax
non-collected of VAT. Instalments of the Current Year That Has to be Paid by
New Taxpayers, Lease-Option, State-Owned Enterprises
Main changes between the new regulation and
(Badan Usaha Milik Negara/BUMN), Regional-Owned
Government Regulation No. 69/2015 are related with the
Enterprises (Badan Usaha Milik Daerah/BUMD),
fourth criteria of tax facility regarding the non-collected
Taxpayers Listed in Stock Exchange and Other Taxpayers
VAT for JKP from abroad. The covered JKP that is given the
Who Are Obliged to Make Financial Report Periodically
incentive based on Government Regulation No. 50/2019
including Individual Taxpayers of Certain Entrepreneurs
is aircraft rental services that is utilized by national air
(MoF Regulation No. 208/2009).
transportation business entity.
This MoF Regulation – stipulated on December 2009
There are also additional groups of certain transportation
– was the changes of Minister of Finance Regulation
equipment and transactions that become non-collected
Number 255/PMK.03/2008 (MoF Regulation No.
of VAT. Previously, there were only four groups of
255/2008). Then, at the end of 2018, this regulation was
transportation equipment that got the facility. However,
revised by the government through Minister of Finance
through this regulation, there are now seven groups of
Regulation Number 215/PMK.03/2018 (MoF Regulation
certain transportation equipment that gain the facilitation
No. 215/2018). Basically, this latest regulation expands
to become non-collected of import VAT. In addition, there
the concept of new taxpayers, changes the basic provision
are six groups of transportation equipment of which
to calculate Income Tax Article 25 instalment for bank
transfer become non-collected of VAT.
taxpayers and confirm the provision to calculate Income
Tax Article 25 instalment for other taxpayers.