To support the acceleration of the transition from fossil fuel usage to electric energy and to enhance public interest in battery-based electric motor vehicles, as well as to support the battery-based electric motor vehicle program, the Minister of Finance (MoF) has issued regulation No. 116 Year 2023 to amend MoF regulation No. 38 Year 2023 regarding Value Added Tax on the Delivery of Certain Four-Wheeled Battery Electric Vehicles and Certain Bus Battery Electric Vehicles borne by the Government for Fiscal Year 2023 (“PMK-116/2023”).

The major changes are as follows:

a)The new regulation requires that the text “PPN DITANGGUNG PEMERINTAH SESUAI PMK NOMOR 38 TAHUN 2023” (“VAT BORNE BY THE GOVERNMENT PURSUANT TO PMK NUMBER 38 OF 2023”) be written on the tax invoice;

b)Taxable entrepreneurs (PKP) that make deliveries of certain electric cars and electric buses are entitled to accelerated restitution facilities as low-risk PKP as referred to in Article 9 paragraph (4c) of the Value Added Tax Law;

c)Accelerated restitution is obtained by the PKP without stipulation as a low-risk PKP by the Director General of Taxation;

d)To obtain accelerated restitution, the PKP must choose to receive the preliminary refund of overpaid taxes based on Article 9 paragraph (4c) of the Value Added Tax Law when completing the Monthly VAT Tax Return; and

e)The Monthly VAT Return that is eligible for the accelerated restitution facility is either the original Monthly VAT Return or an amendment of the Monthly VAT Return submitted to the Tax Office no later than 31 January 2024.

PMK-116/2023 became effective on 22 November 2023.