The Ministry of Finance has updated the provisions on the sales tax on luxury goods (STLGs) for taxable goods (Barang Kena Pajak/BKP) classified as luxury other than motor vehicles.

The updates are outlined in the Minister of Finance Regulation No. 96/PMK.03/2021 concerning the Stipulation of Types of Taxable Goods Other Than Motor Vehicles Subject to Sales Tax on Luxury Goods and Procedures for Exemptions from Sales Tax on Luxury Goods (MoF Reg. 96/2021).

This regulation has been released to implement the provisions under Article 3 of Government Regulation No. 61 of 2020 concerning Taxable Goods Classified as Luxury Other Than Motor Vehicles Subject to Sales Tax on Luxury Goods (Gov. Reg. 61/2020).

The list of the types of BKP classified as luxury other than motor vehicles subject to STLGs is outlined in Appendix I of MoF Reg. 96/2021. As per the Appendix, BKP other than motor vehicles subject to STLGs are segmented into four rate groups.

First, a 20% rate is imposed on luxury residences such as luxury homes, apartments, condominiums, townhouses, and the like with a selling price of IDR30 billion or more.

Second, a 40% rate is imposed on hot air balloons and steerable hot air balloons as well as other aircraft without propulsion as well as firearm bullets and other firearms. However, air rifle pellets and firearms for state purposes are not subject to STLGs.

Third, a 50% rate is imposed on aircraft, other than those subject to the 40% rate. Aircraft for state purposes or commercial air transportation, however, are excluded. The 50% rate is also imposed on firearms and other firearms, such as artillery guns, revolvers, and pistols. Firearms for state purposes, on the other hand, are not subject to STLGs.

Fourth, a 75% rate is imposed on luxury yachts, such as cruise ships, excursion boats, and similar vessels, specifically, those designed for the transport of people, ferries of all types, and yachts. Cruise ships and yachts for state purposes or public transportation, however, are exempt from STLGs. On another note, yachts for tourism businesses are also exempt from STLGs.

Details of STLGs rates under MoF Reg. 96/2021 slightly differ from the former provisions under the Minister of Finance Regulation No. 35/PMK.010/2017 as amended by the Minister of Finance Regulation No. 86/PMK.010/2019 concerning Types of Taxable Goods Classified as Luxury Other Than Motor Vehicles Subject to Sales Tax on Luxury Goods (MoF Reg. 35/2017 as amended by MoF Reg. 86/2019).

Based on MoF Reg. 35/2017 as amended by MoF Reg. 86/2019, yachts for tourism businesses are not excluded from STLGs. The exclusion of yachts for tourism from STLGs was formerly stipulated in Gov. Reg. 61/2020.

As per the considerations under Gov. Reg. 61/2020, yachts for tourism businesses are excluded from STLGs to encourage the tourism industry. MoF Reg. 96/2021 has been effective as of 26 July 2021. The enactment of MoF Reg. 96/2021 simultaneously revokes MoF Reg. 35/2017 as amended by MoF Reg. 86/2019.

New Provisions on STLGs on Luxury Goods Other Than Motor Vehicles