VAT Borne by the Government for the Housing Industry
- April 13, 2021
- Posted by: Administrator
- Category: Tax News
The Minister of Finance (“MoF”) has issued a new Regulation No. 21/PMK.010/2021 (“PMK-21”) regarding the VAT Incentive to housing industry during certain periods of the Corona Virus Disease (“COVID-19”) pandemic which became effective on March 1, 2021.
Under PMK-21, the VAT payable on the delivery of landed houses or flat units during the period March to August 2021 shall be borne by the Government. The delivery would be considered to occur upon the following event:
- The signing of the Notarized Sale Purchase Agreement; or
- The issuance of Payment Certificate by the seller,
and the transfer of right, which shall be proven by the Affidavit of Transfer.
In order to obtain the incentive, the transaction object should be a new and ready-to-use landed house or flat unit, with a selling price of not more than IDR 5,000,000,000. Further, the VAT incentive shall be given depending on the Selling Price of the unit, as follows:
| No | Vehicles with ignition or compression ignition engines (diesel or semi-diesel) | Cylinder
Capacity |
LGST Borne by Govt and the Applicable Tax Period |
| 1 | Sedan or station wagon | ≤ 1500 cc
|
-100% for Tax Period April to May 2021
-50% for Tax Period June to August 2021 -25% for Tax Period September to December 2021 |
| 2 | Vehicle for the transportation of less than 10 (ten) people including driver other than sedan or station wagon with a 1 (one) drive wheel (4×2) system | ||
| 3 | Vehicle for the transportation of less than 10 (ten) people including driver other than sedan or station wagon with a 1 (one) drive wheel (4×2) system | > 1500 – 2500 cc | -50% for Tax Period April to August 2021
-25% for Tax Period September to December 2021 |
| 4 | Vehicle for the transportation of less than 10 (ten) people including driver other than sedan or station wagon with a 2 (two) drive wheel (4×4) system | > 1500 – 2500 cc | -25% for Tax Period April to August 2021
-12.5% for Tax Period September to December 2021 |
However, please be aware that to implement these LGST incentives, the motor vehicle as intended above must meet the requirements of local purchase set by the Ministry of Industry, including the fulfillment of local content of at least 60% (sixty percent). Similarly, please be aware that certain requirements and administrative procedures regarding the VAT invoice issuance and the realization report should be fulfilled; otherwise, the LGST incentive may not be implemented.
PMK-31 also prescribes the format of Motor Vehicle List which shall be a part of the realization report. The realization report is submitted through a specific platform on www.pajak.go.id.
Please be aware that certain requirements and administrative procedures regarding the VAT invoice issuance and the realization report should be fulfilled; otherwise, the VAT incentive may not be implemented. Delivery of landed house or flat unit that is subject to VAT exemption facilities may also not enjoy the facility under this regulation.