Determination on Centralization Place of Value Added Tax

The Director General of Tax (DGT) has issued regulation No. PER-11/PJ/2020 (PER-11) dated 25 June 2020 concerning the determination of one place or more as a centralization place of VAT.

The salient points of PER-11 are as follows:

  1. A Taxable Entrepreneur ( “PKP”) that has more than one place for VAT events may opt to choose one or more places as a place for VAT events by submitting a notification to the DGT.
  2. To ease the VAT centralization procedure, the decision to centralize VAT applies on an unlimited basis. Therefore, a PKP that has received a VAT centralization decision will no longer need to submit centralization extension notifications on a periodic basis.
  3. A PKP that has obtained a VAT centralization decision that is still valid until this period based on PER-19/PJ/2010 and Minister of Finance Regulation PMK-29/2020 may submit a notice letter to the Head of the Regional Tax Office not later than 31 December 2020 to obtain a new centralization decision based on PER-11/PJ/2020.
  4. The following conditions shall be applied if the PKP does not submit the notice letter to the Head of the Regional Tax Office by 31 December 2020:
    • A decision on VAT centralization that still applies to the PKP based on PER-19/PJ/2010 will remain in effect until the expiration date.
    • A decision on VAT centralization which is automatically extended based on PMK-29/2020 will remain in effect for up to five years from the tax period when the centralization extension begins.
    • A decision of VAT centralization whose validity period ended in January or February 2020 will be ended in accordance with the centralization decision.
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