Page 4 - 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 4 of 13

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

The implementation guidelines are outlined in the 44/2020, for example, also outlines the definitions
Director General of Taxes Circular No. SE-44/PJ/2020 of tax identification number card, tax identification
concerning the Implementation of the Appointment number, and the PMSE portal.
of Value Added Tax Withholders for the Utilization
Second, general provisions. This section confirms
of Intangible Taxable Goods and/or Taxable Services
the general provisions for the appointment of PMSE
from Outside the Customs Area within the Customs
VAT withholders formerly regulated under MoF Reg.
Area through Trade Through Electronic Systems (SE-
48/2020 and PER-12/2020. These general provisions
44/2020).
range from the authority of the appointment, the
This circular is aimed at providing guidelines in the threshold of certain criteria, to the revocation of the
appointment of PMSE VAT withholders formerly appointment.
stipulated under the Minister of Finance Regulation
Third, the appointment of PMSE business actors as
No. 48/PMK.03/2020 concerning Procedures for
PMSE VAT withholders. This section explains the
the Appointment of Withholders, Withholding,
procedures for appointing PMSE VAT withholders,
Remittance, and Reporting of Value Added Tax on the
ranging from the appointment basis to the issuance of
Utilization of Intangible Taxable Goods and/or Taxable
tax identification numbers for PMSE business actors.
Services from Outside the Customs Area within the
Customs Area through Trade Through Electronic
Fourth, account activation and updates of PMSE
Systems (MoF Reg. 48/P2020).
VAT withholder data. This section describes the
procedures for account activation and online updating
On another note, SE-44/2020 has been issued in
of the PMSE portal. These provisions were formerly
connection with the enactment of the Director General
regulated and required under Article 8 paragraph (1)
of Taxes Regulation No. PER-12/PJ/2020 concerning
of PER-12/2020.
the Threshold of Certain Criteria for Withholders
and Appointment of Withholders, Withholding,
Fifth, notification of PMSE VAT withholder data
Remittance, and Reporting of Value Added Tax on the
changes. This section details the procedures for data
Utilization of Intangible Taxable Goods and/or Taxable
changes if the data and/or information of PMSE VAT
Services from Outside the Customs Area within the
withholders within the DGT database differs from the
Customs Area through Trade Through the System
actual situation.
Electronics (PER-12/2020).
Sixth, the revocation of the appointment of PMSE VAT
Both MoF Reg. 48/2020 and PER-12/PJ/2020
withholders. Formerly, Article 6 paragraph (1) of PER-
regulate the appointment of PMSE business actors
12/2020 outlined that the Director General of Taxes
as PMSE VAT withholders. There are, however, no
could revoke the appointment of PMSE business actors
technical guidelines regarding this matter. For this
as PMSE VAT withholders upon failure to meet certain
reason, the government deems it is necessary to
predetermined criteria.
prepare a director general of taxes circular as the
implementation guidelines for the appointment of Moreover, to clarify the position of the parties
PMSE VAT withholders. transacting within PMSE, SE-44/2020 provides
guidelines on the roles as well as examples of PMSE
SE-44/2020 is expected to render an orderly tax
transactions. Elucidation of the roles and examples
administration with due regard to the appointment of
of PMSE transactions is listed in Appendix 11 of SE-
PMSE VAT withholders. Enacted on 30 July 2020, this
44/2020.
regulation has also been released to develop relevant
and accurate PMSE VAT withholder data and/or
information.
Changes to Provisions on VAT and/or
Moreover, this regulation has been issued to provide SLTGs Exemptions for Representatives
convenience and excellent service to PMSE VAT
withholders with due regard to international best of Foreign Countries and International
Bodies
practices. SE-44/2020 outlines guidelines for the
appointment of PMSE VAT withholders in 6 scopes.
Exemptions from Value Added Tax (VAT) and/or Sales
First, the definitions. As a regulation that serves as
Tax on Luxury Goods (SLTGs) can now be granted to
implementation guidelines, the scope of definitions
international bodies under certain agreements. Said
outlined under SE-44/2020 is more diverse. SE-
agreements refer to agreements in certain forms and