The Director-General of Tax (“Director-General”) has finally issued Regulation No. PER-12/PJ/2020 on Certain Criteria and Limitations Relating to Collectors and the Appointment of Collectors, as well as the Collection, Submission and Reporting of Value-Added Tax for the Utilization of Intangible Taxable Goods and/or Taxable Services from Outside of Customs Areas within Customs Areas via Electronic Trading Systems (“Regulation 12/2020”).
As a further implementation of the Regulation of Minister of Finance No. 48/PMK.03/2020 on Procedures for the Appointment of Collectors and for the Collection, Deposit and Reporting of Value-Added Tax for the Utilization of Intangible Taxable Goods and/or Taxable Services from Outside of Customs Areas within Customs Areas via Electronic Trading Systems (“Regulation 48/2020”),1 Regulation 12/2020 sets out the criteria which have to be met by Electronic Trading Systems (Perdagangan Melalui Sistem Elektronik – “E-Commerce”) businesses in order for them to be appointed as Value-Added Tax (Pajak Pertambahan Nilai – “PPN”) collectors (“PPN Collectors”).
This edition of article offers a concise analysis of the above criteria and our discussion has been broken down into the following sections: 1) Appointment of PPN Collectors; 2) Collection of PPN; 3) Deposits of PPN; and 4) Reporting obligations.
Appointment of PPN Collectors
Regulation 12/2020 specifies that the following criteria must be met by PPN Collectors:
- E-Commerce businesses must have total transaction values with Indonesian buyers that exceed IDR 600 million during the course of one year or IDR 50 million during the course of one month; and/or
- E-Commerce businesses must have total Indonesian traffic that exceeds 12,000 during the course of one year or 1000 during the course of one month.
The appointment of a given PPN Collector is to be made by the Director-General through the issuance of a Decree of the Director-General.3 Moreover, PPN Collectors are required to commence collection of PPN during the month following their appointment as PPN Collectors.
PPN Collectors are also required to activate and update their data via online applications or via systems that are provided by the Directorate-General of Tax. This process must be completed prior to the commencement of operations as PPN Collectors at the latest.
The Director-General will then subsequently issue both a registration certificate and a taxation identity number for an administrative facility that will function as the relevant PPN Collector’s identifying document during the implementation of their various rights and obligations.
If an E-Commerce business is intending to be appointed as a PPN Collector, then they should submit an official notification to the Director-General via e-mail, application or other designated systems, as determined by the Director-General.
It should also be noted that the Director-General is permitted to revoke the appointment of any PPN Collector if the relevant criteria are no longer being satisfied.
Collection of PPN
If any transaction involves a foreign seller/service provider (“Seller/Provider”) also acting as a direct PPN Collector in relation to their purchasers/service recipients (“Purchaser/Recipient”), then payable PPN must be collected, deposited and reported by a Seller/Provider or E-Commerce business that meets the following criteria:
- Must be a PPN Collector; and
- Must be acting as an issuer of commercial invoices, bills, order receipts or other similar documents.
The amount of PPN which should be imposed by PPN Collectors has been set at 10% multiplied by the tax basis (the amount paid by the Purchaser/Recipient) and should be collected when Purchasers/Recipients are completing their payments.
However, in the event of any utilization of intangible taxable goods (barang kena pajak) and/or taxable services (jasa kena pajak) from outside customs areas within customs areas which is undertaken via E-Commerce and for which PPN is not collected, the payable PPN must be collected, deposited and reported by the Purchaser/Recipient as determined under Law No. 8 of 1983 on Value-Added Tax and/or Luxury Goods Sales Tax, as amended several times, most recently through the issuance of Law No. 42 of 2009.
Deposits of PPN
PPN which is collected during a certain tax period must be deposited in a bank/special facility or other institution by the end of the month following the relevant tax period at the latest.11 Deposits of PPN may be completed through the following processes:
- Electronically; and/or
- Other measures, as determined and/or provided by the Director-General.
Deposits of PPN should utilize billing codes issued by the Director-General that are individually obtained by the relevant PPN Collectors. Furthermore, PPN deposits may be made in several currencies, as follows:
- The rupiah currency, through the use of an exchange rate which is specified under an applicable Decree of the Minister of Finance on the relevant date of deposit;
- The United States Dollar (USD) currency; or
- Other foreign currencies, as determined by the Director-General.
If the total deposit of PPN during a given tax period amounts to less than the required amount, then the payment of the outstanding PPN must be completed during the same tax period. Meanwhile, in the event of any PPN overpayment, the relevant overpayment amount should be reimbursed during the tax period in which the overpayment occurs.
Regulation 12/2020 has been in force since 1st July 2020.