Page 3 - Newsletter (The Revocation of Treasurer’s Taxpayer Identification Number and VAT Policy on Textbooks)

DDTC Newsletter Vol.03 | No.03 I February 2020 Page 3 of 5

The Revocation of Treasurer’s Taxpayer Identification
Number and VAT Policy on Textbooks

SLTGs on the abovementioned seven transactions, the which are exempt from VAT imposition remain the same
regulation does not abrogate the VAT/SLTGs payable as compared to the previous regulation.
the obligation to collect, remit, and report on the seven
transactions is now lies on the PKP as the government’s The Confirmation of Input Tax Credit
partner.
in Dissimilar Taxable periods
VAT Exemptions on the Imports of
General Textbooks, Scriptures, and The Director General of Taxes (DGT) has issued the
Director General of Taxes Circular No. SE-02/PJ/2020
Religious Textbooks on the input tax credit in dissimilar taxable periods. The
DGT issued this circular due to inconsistency in the input
tax credit treatment in dissimilar taxable periods. This
The government has issued a regulation concerning
circular is, thus, intended to affirm the provisions thereof.
VAT exemptions on the supply of general textbooks,
scriptures, and religious textbooks. Moreover, individuals
The circular outlines that the input tax in a taxable period
or entities that import and/or supply general textbooks,
is credited against the output tax in the same period.
scriptures, and religious textbooks are exempt from VAT.
However, a tax credit that may be credited, but is not yet
credited, may be credited in the following taxable period
The policy is outlined in the Minister of Finance no later than three months after the end of the taxable
Regulation Number 5/PMK.010/2020 concerning the period in question.
General Textbooks, Scriptures, and Religious Textbooks
of which the Import and/or Supply are Exempt from In the event that the three-month period has been
Value Added Tax (PMK No. 5/2020). exceeded, the input tax may still be credited through
the correction of the Periodic Value Added Tax Return.
The previous regulation, MoF Regulation No. 122/ Further, this input tax credit provision applies to the
PMK.011/2013, stipulated several types of books input tax specified in specific documents deemed equal
exempt from VAT after an individual or entity acquired to invoices.
VAT Exemption Certificate (Surat Keterangan Bebas/
Input tax credit during these dissimilar taxable periods,
SKB) issued by the Director General of Taxes. Upon
however, is only possible if the input tax has not
the enactment of MoF Reg. No. 5/2020, MoF Reg. No.
been recorded as an expense or has not been added
122/2013 shall be revoked and declared not valid.
(capitalized) in the accounting cost of the taxable goods
or services taxable and the taxable person for VAT
The regulation asserts that the books refer to papers
purposes has not been audited.
and/or pictures published in the form of printed
copies or electronic publications that are not published Tax Arrears Quality Classification
periodically. The VAT exemption policy aims to improve
national education and intelligence by providing
affordable books and scriptures for society. The Director General of Taxes has recently issued a
regulation governing the classification of tax arrears
General books that contain educational elements are quality. The classification is outlined in the Director
entitled to the VAT exemption facility if five conditions or General of Taxes Regulation No. PER-01/PJ/2020.
requirements are met. The five requirements include first, Through the regulation signed on 13 January 2020, the
do not conflict with the values of the five basic principles Director General of Taxes requires the Head of the Tax

of the Republic of Indonesia (Pancasila). Office (Kantor Pelayanan Pajak/KPP) to assess the quality
of tax arrears based on their conditions.
Second, non-discriminatory against ethnicity,
religion, race, and/or groups. Third, do not contain The regulation was issued because the provisions
pornography. Fourth, do not contain elements of concerning the classification of tax arrears quality and
violence. Fifth, do not contain hate speech. the currently applicable values of the tax arrears on the
balance sheet do not reflect the net realizable value.
Therefore, the Director General of Taxes considers it
In the event that these requirements are not satisfied,
necessary to amend the provisions pertaining to the
the publisher and/or importer of the general books are
classification of tax arrears quality.
obliged to pay VAT according to the statutory provisions.
Requirements are deemed unfulfilled based on court
The regulation defines tax arrears as arrears arising from
decisions. The provisions concerning the scriptures
tax due, including administrative sanctions in the form of