Bonded Zones

On 8 June 2021, the Minister of Finance (MoF) issued regulation No. PMK 65/PMK.04/2021 concerning Bonded Zones (“PMK-65”). PMK-65 is the amendment of MoF regulation No. 131/PMK.04/2018. This PMK-65 will become effective on 8 August 2021. The highlights of this regulation amendment are as follows:

  1. IT Inventory shall be accessible as a subsystem of accounting by both DGT and DGCE for the purposes of audit and supervision.
  2. Real-time CCTV shall be accessible by DGT and DGCE as well as recording for the past seven days.
  3. Stock taking is now required to be reported within two months to the Tax Office where the VAT Return reported.
  4. Bonded Zone Inbound Delivery Approval should be available prior to preparing the VAT invoice. The VAT invoice should be marked with “VAT Not Collected” or “VAT and LGST Not Collected”.
  5. The Bonded Zone tax and customs facilities now clearly cover imported raw materials, auxiliary, and packaging owned by an Overseas Taxpayer, provided those materials stay in the Bonded Zone until they are exported. Lenience is available for the materials provided for delivery between Zones or temporary local delivery. This may be an issue for toll manufacturing.
  6. Clearly states that in the case that an inbound delivery to a Bonded Zone is not supply of taxable goods, such supply is not subject to VAT and LGST and no VAT Invoice is required.
  7. Clawback of Import Taxes or VAT and LGST for goods owned by an Overseas Taxpayer cannot be claimed. This may be an issue for toll manufacturing. The VAT should be paid by the Goods Receiver using a self-remittance tax payment slip.
  8. Update on the basis for calculation of Excise and VAT or VAT and LGST for local delivery from a Bonded Zone.
  9. Update on VAT and LGST on outbound delivery of local-origin capital goods.
  10. Update on procedures for suspension of a Bonded Zone License.
  11. Update on the settlement of remaining inventories in the event of Bonded Zone dissolution.
  12. Update on Corporate Guarantee procedures.
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