The government has officially issued special provisions pertaining to the granting of VAT Borne by the Government (Ditanggung Pemerintah/DTP) incentives for unit leasing in shopping centers. The policy is outlined in the Minister of Finance Regulation No. 102/PMK.010/2021 concerning Value Added Tax Borne by the Government on Supplies of Building Rental Services to Retailers for the 2021 Fiscal Year (MoF Reg. 102/2021).
This regulation has been issued to maintain business continuity of the retail sector during the Covid-19 pandemic to encourage national economic growth. These incentives constitute the government’s support for the retail sector that is affected by the Covid-19 pandemic. As per Article 2 paragraph (1) of MoF Reg. 102/2021, VAT payable on supplies of commercial space or building rental services to retailers is borne by the government for the 2021 fiscal year.
Retailers refer to entrepreneurs who in their entire or part of businesses, supply goods and/or services to end consumers. Commercial space or buildings, on the other hand, refer to stand-alone shops or outlets or those located in a shopping center, shopping complex, apartment facility, hotel, hospital, educational facility, public transportation facility, office facility, or people’s market.
VAT DTP for supplies of commercial space or building rental services to retailers is granted for VAT payable on rentals for August 2021 to October 2021 which is billed from August 2021 to November 2021. VAT payable is the product of the VAT rate multiplied by the tax base in the form of reimbursement.
The tax base (Dasar Pengenaan Pajak/DPP) of the VAT payable is reimbursement, including the service charge which is billed simultaneously and separately with the rental services bill. Reimbursement refers to the monetary value, including all costs that are requested or should be requested by the entrepreneur due to the supply of taxable services, excluding VAT collected under the VAT Law and rebates listed in the tax invoice.
With this facility, a taxable person for VAT purposes (Pengusaha Kena Pajak/PKP) who supplies commercial space/building rental services is required to prepare a tax invoice as per the provisions and submit a report on the VAT DTP realization. The tax invoice is prepared by including transaction code 07, the statement “VAT BORNE BY THE GOVERNMENT, EXECUTION OF MOF REG. NUMBER .../PMK.010.2021”, and the phrase “rent of a commercial space or building” along with a description of the location and the month of the commercial space or building services.
This information is included by selecting the VAT BORNE BY THE GOVERNMENT, THE EXECUTION OF MOF REG. NUMBER .../PMK.010.2021 stamp on the e-faktur application. If the stamp option is not yet available in the e-faktur application, the PKP may update the stamp on supplies eligible to the facility by accessing the stamp synchronization menu on the e-faktur application.
The VAT DTP realization report is prepared every taxable period corresponding to the preparation of the tax invoice. The VAT DTP realization report is submitted online through the channels stipulated by the Director General of Taxes no later than the end of the following month after the taxable period.
Supplies of commercial space or building rental services to retailers who do not use tax invoices and/or that are not reported by the PKP in the Periodic VAT Returns are not entitled to the VAT DTP incentives. The head of the tax office (Kantor Pelayanan Pajak/KPP) on behalf of the Director General of Taxes may collect VAT payable as per statutory provisions if data and/or information indicating three things are obtained.
First, the supplied object does not constitute commercial space or building rental services to retailers. Second, the rental period and the rental collection period do not comply with the provisions. Third, supplies that do not meet the requirements. The implementation and accountability of VAT DTP tax subsidy on supplies of commercial space or building rental services to retailers are carried out as per statutory provisions. MoF Reg. 102/2021 has been effective as of 30 July 2021.