Minister of Finance (MoF) Regulation No. 171/PMK.04/2019 regarding Exemption from Import Duty on Import of Goods

On 22 November 2019, the MoF issued Regulation No.171/PMK.04/2019 (“PMK-171”) to revoke PMK-28/PMK.011/2011 (“PMK-28”) concerning Exemption from Import Duty on import of goods by the Central Government or Local Government for the public interest.

The key points of PMK-171 are as follows:

The importation of goods by the Central Government or a Local Government may be exempted from import duty if:

  • The goods are purchased using funds from the State Budget (Anggaran Pendapatan dan Belanja Negara or “APBN”) or Local Budget (Anggaran Pendapatan dan Belanja Daerah or “APBD”);and/or
  • Received from grant.

The exemption of import duty can also be granted for several conditions as follows:

  • Importation through bonded storage, special economic zone, or free zone;
  • handover of imported goods which are exempted from import duty from the recipient of import duty exemption; or
  • settlement of temporarily imported goods through grant to the Central Government.

Furthermore, the importation of such goods may also be granted tax facilities such as:

  • Non-collection of Value Added Tax (“VAT”) and Sales Tax on Luxury Goods; and/or
  • Exempted from collection of Article 22 Withholding Income Tax.

In order to enjoy the facility of import duty exemption, the Central Government, Local Government or Third Party shall submit an application to the Minister of Finance (“MoF”) through the Head of Customs and Excise Regional Office or Head of Customs and Excise Primary Service Office.

This MoF Regulation became effective 30 (thirty) days after its enactment date, which was 25 November 2019.

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