Written by Abel Reginaldo on 11/07/2024
The author’s views are entirely their own and may not always reflect the views of Putranto Alliance.
To optimize tax revenue, regulate consumption, and maintain economic stability, Indonesia has implemented a Value Added Tax/Pajak Pertambahan Nilai (VAT/PPN) at every stage of the supply chain. Compliance with regulations is crucial to avoid penalties. This article explores Value Added Tax and the Sales Tax on Luxurious Goods/Pajak Penjualan Atas Barang Mewah (STLG/PPnBM), covering subjects, objects, tax rates, and non-compliance consequences.
As per Article 1 of Law Number 7 Year 2021 , the amount of tax depends on the sale and purchase of goods or services by individual or corporate taxpayers recognized as Taxable Entrepreneurs (Pengusaha Kena Pajak/PKP). It taxes the value added to goods and services throughout their distribution.
Sales Tax on Luxurious Goods is an additional tax on luxury goods beyond the standard Value Added Tax, targeting high-value items such as cars and apartment to regulate their market consumption.
As per outlined in Article 1 Paragraph 15 of Value Added Tax Regulation, Taxable Entrepreneurs who deliver or transfer the Taxable Goods (Barang Kena Pajak/BKP) and/or Taxable Services (Jasa Kena Pajak/JKP) are governed by the provisions of the Value Added Tax Regulation. Only those classified as Taxable Entrepreneurs are permitted to apply VAT on transactions.
The importance and benefits of Value Added Tax and Sales Tax on Luxurious Goods for taxable entrepreneurs include:
Entrepreneurs are required to register their businesses to gain official recognition as Taxable Entrepreneurs, making them responsible for collecting, remitting, and reporting VAT and STLG. However, those classified as Small Enterprises, with annual revenue below Rp4.800.000.000,00, are exempt from these requirements, as specified in Minister of Finance Regulations 197/PMK.03/2013.
The process of complying with VAT and STLG involves several key steps:
Putranto Alliance is your trusted partner in navigating the ITAS and ITAP registration and extension process. Our team of experts offers comprehensive support, from document preparation to liaising with government agencies, ensuring a hassle-free transition to life in Indonesia.
By partnering with Putranto Alliance, businesses can navigate the intricacies of Value Added Tax and Sales Tax on Luxurious Goods with confidence, ensuring compliance, and focusing on their core operations without the administrative burden of tax management.
A response to the inquiry will be sent to the provided email within 2 working days.
putranto@putranto-alliance.com
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Jakarta Selatan, 12950, Indonesia
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