Page 7 - Newsletter (Reduction of Income Tax Rates for Publicly Listed Companies and Establishment of VAT Withholder Criteria for E-Commerce Businesses)

DDTC Newsletter Vol.04 | No.01 I July 2020 Page 7 of 13

Reduction of Income Tax Rates for Publicly Listed Companies and
Establishment of VAT Withholder Criteria for E-Commerce Businesses

The Threshold of Transaction Value
places as the VAT centralization. Furthermore, said
PKP is required to centrally carry out administrative and Access to PMSE VAT Withholders
procedures of the supply and financial administration
at the VAT centralization, either in one place or in
The Director General of Taxes has stipulated the
several places. The place that may be chosen as the regulation on certain criteria as the basis for the
VAT centralization is the place of VAT payable in which appointment of trade through electronic systems
the entrepreneur has been confirmed as a PKP. (perdagangan melalui sistem elektronik/PMSE)
If the PKP chooses one or more places as the business players as PMSE VAT withholders.
VAT centralization, said PKP sends an electronic
These criteria are outlined in the Director General of
notification to the head of the DGT Regional Office Taxes Regulation No. PER-12/PJ/2020 concerning the
of the VAT centralization. If electronic channels are Certain Criteria for the Appointment of Withholders,
not available, the PKP may submit a written notice. Withholding, Deposit, and Reporting of Value Added
The notice is prepared as per the format outlined in Tax on the Utilization of Intangible Taxable Goods
Appendix A of this regulation. and/or Taxable Services from Outside the Customs

Based on the notification, the head of the DGT’s Area into the Customs Area through Trade Through
regional office of the VAT centralization will issue Electronic Systems (PER-12/2020).
a decree concerning whether the PKP is eligible for These criteria include two provisions. First, the value of
VAT centralization or not. The decree will be issued transactions with buyers in Indonesia exceeds Rp600
no later than 14 working days since the notification is million in one year or Rp50 million in one month.
received in full by the DGT. The VAT centralization will Second, the amount of traffic or access in Indonesia
begin to take effect from the next tax period after the exceeds 12.000 accesses in one year or 1.000 accesses
decree is issued. in one month.
The places of VAT payable is defined as the place of PMSE VAT withholders, however, are not limited to
residence or place of domicile and/or fixed place of PMSE business players appointed by the Director
business in the place of VAT payable. VAT centralization, General of Taxes. This is because PMSE business
however, refers to the place of residence or domicile players that are not appointed as withholders but
and/or fixed place of business chosen as the VAT wish to be appointed as PMSE VAT withholders may
centralization.
submit a notification to the Director General of Taxes.
A number of places of residence or domiciles cannot The notification will be considered by the Director
be chosen as the VAT centralization or the place of VAT General of Taxes to appoint the PMSE business players
payable. Such places include those located in bonded as PMSE VAT withholders.
storage, special economic zones (kawasan ekonomi
The regulation also authorizes the Director General of
khusus/KEK), free trade zones, other facilitated areas, Taxes to revoke PMSE business players who have been
locations of import facilities for export (kemudahan
appointed as PMSE VAT withholders. This revocation
impor tujuan ekspor/KITE), as well as locations in
applies in the event that the PMSE business players no
which PKP conducts business activities in the transfer longer fulfill certain criteria.
of land and/or building sector.
Further, PMSE business players that have been
A place of VAT payable which does not have and/or does
appointed as PMSE VAT withholders may be given
not carry out administrative activities of supply and
tax identification numbers. The tax identification
financial administration activities cannot be chosen
numbers are given by the DGT through the issuance
as the VAT centralization. In this regard, the Head of of a certificate of registration and tax identification
the DGT Regional Office of the VAT centralization may number card. In addition, PMSE VAT withholders are
revoke VAT centralization, either based on the PKP’s required to activate an account and update data online
notification or ex officio. no later than when the appointment as PMSE VAT
withholder takes effect.

The account must be activated and data must be
updated to enable PMSE VAT withholders to use the
application or system stipulated and/or provided by
the DGT to exercise their tax rights and fulfill their tax
obligations as PMSE VAT withholders.