Page 10 - Newsletter(Additional Covid-19 Related Tax Incentives and Technical Guidelines for the Appointment of E-Commerce VAT Withholders)

DDTC Newsletter Vol.04 | No.05 I September 2020 Page 10 of 13

Additional Covid-19-Related Tax Incentives and Technical
Guidelines for the Appointment of E-Commerce VAT Withholders

Exemptions from VAT on Imports
attached with evidence showing the occurrence of tax
treatment by the Director General of Taxes that is not and/or Supplies of Certain Strategic
in accordance with the provisions of the Tax Treaty.
Taxable Goods
Requests for the implementation of MAP may be
renewed insofar as the implementation of MAP The government has issued policies related to Value
negotiations by the Director General of Taxes and Added Tax (VAT) exemptions on imports and/or
Competent Authority of Treaty Partners has resulted supplies of certain strategic taxable goods (Barang
in an initial agreement contained in the minutes of Kena Pajak/BKP). These policies are outlined in
meeting. The requests are submitted to the Director Government Regulation No. 48 of 2020 concerning
General of Taxes through the Director of International
Amendments to Government Regulation No. 81 of
Taxation.
2015 concerning Imports and/or Supplies of Certain
Strategic Taxable Goods Exempted from Value Added
Moreover, the renewal of the request must be applied
Tax (Gov. Reg. 48/2020).
in writing by the competent authority of the Treaty
partner and submitted at most once for each request
This regulation has been issued to provide legal
for the implementation of MAP. The deadline for
certainty, increase the national electrification ratio,
submission is six months prior to the expiration of the
and accelerate the more efficient fulfillment of
deadline for MAP negotiations.
electricity needs. The exemptions will take effect on
With regard to the proposed request for the 24 August 2020.
implementation of MAP, the Director General of Taxes
Under this regulation, the government stipulates
will subsequently conduct a thorough examination on
the fulfillment of the requirements for the submission that liquefied natural gas (LNG) is BKP of which the
of requests for the implementation of MAP and the imports and supplies are exempted from VAT. Input
conformity of the matters submitted. If the proposed VAT related to the supplies of certain strategic BKP
request can be processed, the Director General of cannot be credited.
Taxes, through the Director of International Taxation,
On another note, the government specifies that the
submits a written request for the implementation of
imports and supplies of goods produced from marine
MAP to the Competent Authority of the Treaty partner.
and fishery businesses are exempted from VAT. In
Furthermore, if the implementation of MAP terms of imports and supplies of fish, the government
negotiations results in mutual agreement, the currently regulates that fish heads, tails, and stomachs
Director General of Taxes will follow up by compiling as well as fillets and other fish meat, whether fresh,
and signing a decision letter on mutual agreement chilled, or frozen, are exempted from PPN. However,
within a maximum of one month. The deadline this time the government exempts the imports and
commences from the receipt of written notification supplies of fresh or chilled fish in the form of milkfish,
from the Treaty partner competent authority that long-jawed mackerel, mackerel, tuna, and skipjack
the mutual agreement can be implemented and a
tuna, either with or without a head from the VAT
written notification that the mutual agreement can be
exemption facility.
implemented is submitted to the Competent Authority
of the Treaty partner. To obtain VAT exemptions either at the time of imports
or supplies of LNG and marine and fishery products
When this regulation takes effect, requests for
or other goods, the Certificate of VAT Exemption will
Implementation of MAP submitted prior to the
not be required. Only the supplies and imports of
enactment of MoF Reg. 49/2019 may be renewed.
machinery and factory equipment in one unit used
Promulgated on 11 August 2020, this policy came into
to process BKP by Taxable Persons for VAT Purposes
effect thereafter.
(Pengusaha Kena Pajak/PKP) that produce BKP are
required to have the Certificate of VAT Exemption to
enjoy the VAT exemption facility.