As of 30 March 2022, Ministry of Finance (“MOF”) Regulation No. 60/PMK.03/2022 on Procedures on Appointing Tax Collectors, Collecting, Tax Payment, and Reporting’s on Value Added Tax (“VAT”) for Utilization of Intangible Taxable Goods and/or Taxable Service from outside the Customs Area for transactions inside the Customs Area Trough Electronic Trade Systems (“PMK 60/2022”) is effective. This PMK 60/2022 replaced the PMK 48/PMK.03/2020 (“PMK 48/2020”). The subject of VAT application under PMK 60/2022 are goods and/or services that are purchased from foreign entities located outside the Customs Area (Indonesia) to the buyers located inside the Customs Area (Indonesia).
The significant updates under PMK 60/2022, is with regards to the increase of the amount of VAT imposed which is now become 11% x tax base as of 1 April 2022[1]. PMK 60/2022 also adds further obligations on the reporting requirements for the collected and paid tax, which must now include the VAT collection transaction details, including the transaction report.
Collection
Under PMK 60/2022, the VAT payable for utilization of taxable intangible goods and/or services from outside the Customs Area (Indonesia) shall be collected by foreign traders and/or foreign service providers appointed by the MOF as a tax collector.
In the event that a foreign trader and/or foreign service provider conducts transaction with the buyer trough domestic and/or foreign E-Commerce Organizers, then the VAT shall be collected by the foreign trader and/or service provider, foreign and/or domestic E-Commerce Organizers (“Tax Collectors”) which:
a) is appointed as a E-commerce VAT collector; and
b) produces commercial invoices, billing, order receipt, or other related documents.
However, the utilization of intangible taxable goods and/or services which are not collected under the above provisions are still subject to VAT and such VAT shall be collected, paid, and reported by the buyer and/or the user of the services as pursuant to Article 3A of Law No. 8 of 1983 on Value Added Tax (VAT Law). Such buyer and/or the user of the services (individual or entity) must also fulfil certain criteria: (i) domiciled or residing in Indonesia; (ii) conduct payment using debit, credit, and/or other payment facilities which are provided by institutions in Indonesia; and/or (iii) conduct transaction using an Internet protocol located in Indonesia or a phone number with an Indonesian country code.
Trading Business Actors through Electronic System to be appointed as Tax Collectors
PMK 60/2022 stipulates the criteria of appointment of Trading Business Actors through Electronic System as Tax Collector as follows:
a. Value of transaction with Indonesian buyer and/or the user of service has to exceed certain
amount within 12 months; and/or
b. Amount of traffic or access to exceed a certain amount within 12 months 2 .
Upon appointment as a Tax Collector, the Trading Business Actor will be provided with an identity number for tax administration which are utilized as an identification of a E-Commerce VAT Collector in conducting its obligations and duties as a tax collector.
Obligations of the parties in a transaction
The Trading Business Actor as Tax Collectors are obliged to conduct payment for the collected VAT to the Indonesian Tax Authority for each tax period, at the latest on the end of the next month after the end of the tax period.
The tax payment shall be done electronically to the state treasury account, with the currency of (i) rupiah, with the exchange rate set by the MOF on the day of the payment, (ii) United States Dollar, or (iii) other currencies which are set out by the Indonesian Tax Authority.
Aside from collection and payment, the Tax Collectors must also report the VAT collected and paid on a quarterly basis, at the latest on the end of the next month after the quarterly period ends. The report and payment is conducted to the application or system which are provided and/or set by the Indonesian Tax Authority.
Further, The Indonesian Tax Authority may also request the Tax Collector to submit a detailed VAT Collection Transaction Report on an annual basis, which is also conducted to the application or system which are provided and/or set by the Indonesian Tax Authority.
The detailed VAT Collection Transaction Report, must contain at least the following information:
a. Number and date of VAT payment;
b. Amount of payment;
c. Amount of VAT Collected; and
d. Name and Taxpayer Identification Number of the buyer (NPWP), if the VAT collection receipt
(in the form of commercial invoice, billing, order receipts, or other related documents),
specifies the NPWP of the buyer.
Author’s Note:
The MOF utilizes PMK 60/2022 as a tool to accommodate collection, payment, and reporting VAT for taxable goods and/or services purchased from abroad trough E-commerce platform.
For further information, please contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
1 The VAT tax rate is 11%, which is applicable on 1 April 2022 and 12%, which is applicable on an unspecified time, however no later than 1 January 2025, pursuant to Article 7 (1) (b) of
VAT Law.
2 The detailed criteria for the appointment of Trading Business Actors Trough Electronic System are set upon by the Directorate General of Tax Regulation No. PER-12/PJ/2020, which is
still effective upon the Implementation of PMK 60/2022. The criteria set are:
a. Value of transaction with Indonesian buyer and/or the service user exceeds Rp 600,000,000 within 1 year or Rp 50,000,000 within 1 month and/or
b. Amount of traffic or access in Indonesia exceeds 12,000 in I year or 1,000 in 1 month.
