The Government Restipulates Sales Tax on Luxury Goods on Motor Vehicles

s Khisi Armaya Dhora
s Awwaliatul Mukarromah
By Khisi Armaya Dhora, Awwaliatul Mukarromah
Khisi Armaya Dhora
Awwaliatul Mukarromah
The Ministry of Finance (Kementerian Keuangan/Kemenkeu) has readjusted the types of vehicles subject to sales tax on luxury goods (STLGs) (Pajak Penjualan atas Barang Mewah/PPnBM). The policy is outlined in the Minister of Finance Regulation No. 141/PMK.010/2021 concerning the Stipulation of Types of Motor Vehicles Subject to Sales Tax on Luxury Goods and Procedures for the Imposition, Granting and Administration of Exemptions, and Refunds of Sales Tax on Luxury Goods (MoF Reg. 141/2021).
 
The adjustments to the provisions are aimed at accelerating the reduction of exhaust emissions from motor vehicles. In addition, this regulation has been released to promote the use of energy-efficient and eco-friendly motor vehicles.
 
MoF Reg. 141/2021 revises the Minister of Finance Regulation No. 33/PMK.010/2017 concerning Amendments to the Minister of Finance Regulation No. 64/PMK.011/2014 concerning Types of Motor Vehicles Subject to Sales Tax on Luxury Goods and Procedures for the Granting of Exemptions from Sales Tax on Luxury Goods (MoF Reg. 33/2017).
 
On another note, with respect to adjustments to STLGs rates on motor vehicles, the government issued Government Regulation No. 74/2021 concerning the Amendments to Government Regulation No. 73 of 2019 concerning Taxable Goods Classified as Luxury in the Form of Motor Vehicles Subject to Sales Tax on Luxury Goods (Gov. Reg.  74/2021). Said Gov. Reg. stipulates diverse STLGs rates on motor vehicles by taking into account the volume of fuel consumption and the level of CO2 emissions and adjusts STLGs rates on motor vehicles.
 
Broadly speaking, MoF Reg. 141/2021 accommodates the provisions and rates of STLGs formerly regulated under Gov. Reg. 74/2021. MoF Reg. 141/2021 also stipulates the procedures for the imposition, granting, administration, and exemptions of STLGs.
 
Under MoF Reg. 141/2021, four groups of motor vehicles are classified as luxury. First, motor vehicles for transporting people. STLGs rates in this chapter are reclassified into two groups, namely vehicles for transporting fewer than 10 people including the driver, and vehicles for transporting 10 to 15 people including the driver.
 
Further, vehicles for transporting fewer than 10 people are divided into 3 types as follows:
  1. vehicles with a cylinder capacity of up to 3000 cc are subject to four levels of rates, namely 15%, 20%, 25%, or 40%;
  2. vehicles with a cylinder capacity of more than 3000 cc to 4000 cc are subject to three levels of rates, namely 40%, 50%, 60%, or 70%; or
  3. electric motors are subject to a 15% rate.
Next, vehicles for transporting 10 to 15 people including the driver are also divided into three types as follows:
  1. vehicles with a cylinder capacity of up to 3000 cc are subject to two levels of rates, namely 15% or 20%;
  2. vehicles with a cylinder capacity of more than 3000 cc to 4000 cc are subject to two levels of rates of 25% or 30%; or
  3. electric motors are subject to a 15% rate.
Second, double cabin motor vehicles. In this group, STLGs rates are classified into three groups, namely vehicles with a cylinder capacity of 3000 cc are subject to a rate of 10%, 12%, or 15%; vehicles with a cylinder capacity of more than 3000 to 4000 cc are subject to a rate of 20%, 25%, or 30%; as well as electric motors are subject to a 10% rate.
 
Third, four-wheeled motor vehicles with low carbon emissions. In this group, STLGs rates are set based on the type of carbon emission technology used. The carbon emission technology group consists of energy-efficient and affordable technology, full hybrid and/or mild hybrid, flexy engine (biofuel 100), and plug-in hybrid electric vehicles, battery electric vehicles, or fuel cell electric vehicles.
 
In further detail, affordable vehicles with energy-saving technology are subject to a rate of 15% with a tax base (Dasar Pengenaan Pajak/DPP) of 20% of the selling price. Next, vehicles with full hybrid and/or mild hybrid technology with a cylinder capacity of up to 3000cc are subject to a 15% rate, but with varying percentages of DPP. Motor vehicles with full hybrid or mild hybrid technology and cylinder capacity of more than 3000 cc to 4000 cc are subject to a rate ranging from 20%, 25%, to 30%.
 
Further, vehicles with flexy engine technology (biofuel 100) are subject to a 15% rate with a DPP of 53 1/3 % of the selling price. Next, battery electric vehicles or fuel cell electric vehicles are subject to a 15% rate with a DPP of 0% of the selling price. In contrast, motor vehicles using plug-in hybrid electric vehicles technology with fuel consumption of more than 28 km/per liter or CO2 emission levels of up to 100 grams/km are subject to a 15% rate with a DPP of 33 1/3% of the selling price.
 
Fourth, other motor vehicles. In this group, STLGs rates are divided into three as follows:
  1. special vehicles for golf are subject to a 50% rate;
  2. 2 or 3 wheeled motor vehicles with a cylinder capacity of more than 250 cc to 500 cc or special vehicles for travel on snow, beaches, or mountains are subject to a 60% rate; or
  3. motor vehicles with a cylinder capacity of more than 4,000 cc, 2 or 3 wheeled motor vehicles with a cylinder capacity of more than 500 cc, or trailers, semi-trailer caravans, for housing or camping are subject to a 95% rate.
STLGs payable is calculated by multiplying the rate by DPP. The STLGs rate on imports or supplies of taxable goods (Barang Kena Pajak/BKP) classified as luxury is determined based on the capacity of the cylinder, consumption of fuel oil or CO2 emissions, and the technology used.
 
As per Article 25 paragraph (1) of MoF Reg. 141/2021, the DPP of STLGs on imports of completely built-up motor vehicles is the import value. The DPP of STLGs on supplies of motor vehicles assembled or produced within the customs area, on the other hand, is the selling price.
 
STLGs shall not be imposed on imports or supplies of completely knocked down motor vehicles, chassis, vehicles for transporting goods, two-wheeled motor vehicles with a cylinder capacity of up to 250 cc, and motor vehicles for transporting 16 or more people including the driver. In addition, imports or supplies of the following four vehicles are exempt from STLGs:
  1. motor vehicles used for ambulances, hearses, fire fighting vehicles, detention vehicles, and public transport vehicles;
  2. vehicles used for state protocol purposes;
  3. public transport vehicles for 10 to 15 people including the driver with diesel or semi-diesel compressors used for the Indonesian National Armed Forces (Tentara Nasional Indonesia/TNI)/the Indonesian National Police (Kepolisian Negara Republik Indonesia/POLRI) service vehicles; and
  4. motor vehicles used for patrol purposes by TNI/POLRI.
Individuals or entities wishing to acquire STLGs exemption on imports or supplies of motor vehicles must hold an STLGs withholding exemption certificate (Surat Keterangan Bebas/SKB) on the vehicles. The individuals or entities must hold STLGs SKB before submitting the import declaration or supplying the motor vehicles. If upon importing or receiving a supply of motor vehicles, they do not hold the STLGs SKB or acquire such a certificate after submitting the import declaration, the STLGs will continue to be collected or paid.
 
Further, individuals or entities that should otherwise be subject to lower STLGs may apply for STLGs refunds. STLGs refunds may be granted if an individual or entity alternatively fulfills the following conditions.
 
First, for imports, STLGs has been remitted into the state treasury at the time of import and is not included as an expense in the annual income tax return or is not capitalized in the acquisition price. Second, for supplies of motor vehicles, STLGs has been filed in the periodic VAT return by the manufacturer constituting a Taxable Person for VAT Purposes (Pengusaha Kena Pajak/PKP) that produces luxury motor vehicles and no objection is raised.
 
To obtain STLGs refunds, taxpayers are required to apply to the head of the tax office (Kantor Pelayanan Pajak/KPP) where they are registered. The application shall be submitted no later than twelve months after the import or supply of motor vehicles. Next, the head of the tax office shall verify the accuracy of tax payment and completeness of documents. Based on verification results, the head of the tax office will issue notice  of overpayment assessment or a letter of rejection of the application for STLGs refunds.
 
With the enactment of MoF Reg. 141/2021, MoF Reg. 64/2014 as amended by MoF Reg. 33/2017, Director General of Taxes Decree No. KEP-199 /PJ/2000, Director General of Taxes Decree No. KEP-540/PJ/2000, Article 12 point 3 of the Director General of Taxes Decree No. KEP-214/PJ/2001, and the Director General of Taxes Decree No. KEP-229/PJ/2003 are declared revoked and invalid. MoF Reg. 141/2021 has been effective as of 16 October 2021.