MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA REGULATION

NUMBER 67/PMK.03/2022

 

 

 

a.

that to provide legal certainty and a sense of fairness as well as to simplify tax administration, it is necessary to regulate the calculation, collection, remittance and filing of value added tax on supplies of insurance agency services, insurance brokerage services and reinsurance brokerage services;

b.

that based on the considerations referred to in letter a as well as to implement the provisions under Article 16A paragraph (2) and Article 16G letter i of Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods as amended several times, last amended by Law Number 7 of 2021 concerning the Harmonisation of Tax Regulations, it is necessary to enact a Minister of Finance Regulation concerning Value Added Tax on Supplies of Insurance Agent Services, Insurance Brokerage Services and Reinsurance Brokerage Services;

 

 

 

1.

Article 17 paragraph (3) of the 1945 Constitution of the Republic of Indonesia;

2.

Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (State Gazette of the Republic of Indonesia of 1983 Number 51, Supplement to the State Gazette of the Republic of Indonesia Number 3264) as amended several times, last amended by Law Number 7 of 2021 concerning the Harmonisation of Tax Regulations (State Gazette of the Republic of Indonesia of 2021 Number 246, Supplement to the State Gazette of the Republic of Indonesia Number 6736);

3.

Law Number 39 of 2008 concerning State Ministries (State Gazette of the Republic of Indonesia of 2008 Number 166, Supplement to the State Gazette of the Republic of Indonesia Number 4916);

4.

Presidential Regulation Number 57 of 2020 concerning the Ministry of Finance (State Gazette of the Republic of Indonesia of 2020 Number 98);

5.

Minister of Finance Regulation Number 118/PMK.01/2021 concerning the Organisation and Work Procedures of the Ministry of Finance (Official Gazette of the Republic of Indonesia of 2021 Number 1031);

 

 

MINISTER OF FINANCE REGULATION CONCERNING VALUE ADDED TAX ON SUPPLIES OF INSURANCE AGENCY SERVICES, INSURANCE BROKERAGE SERVICES AND REINSURANCE BROKERAGE SERVICES.

 

 

Referred to herein this Minister of Finance Regulation:

1.

Value Added Tax Law is Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods and the amendments thereto.

2.

Value Added Tax is Value Added Tax referred to in the Value Added Tax Law.

3.

Taxable Goods are goods subject to tax pursuant to the Value Added Tax Law.

4.

Taxable Services are services subject to tax pursuant to the Value Added Tax Law.

5.

Taxable Person is an entrepreneur supplying Taxable Goods and/or supplying Taxable Services that are subject to taxes pursuant to the Value Added Tax Law.

6.

Tax Invoice is a tax collection receipt prepared by Taxable Persons supplying Taxable Goods or supplying Taxable Services.

7.

Input VAT is Value Added Tax that should have been paid by a Taxable Person due to an acquisition of Taxable Goods and/or acquisition of Taxable Services and/or utilisation of Taxable Goods from outside the Customs Area and/or utilisation of Taxable Service from outside the Customs Area and/or an import of Taxable Goods.

8.

Insurance Company is a general insurance company and a life insurance company.

9.

Sharia Insurance Company is a sharia general insurance company and a sharia life insurance company.

10

Insurance agent is a person who works alone or works for a business entity, acts for and on behalf of the Insurance Company or Sharia Insurance Company and fulfils the requirements to represent the Insurance Company or Sharia Insurance Company in marketing insurance products or sharia insurance products.

11.

Taxpayer is any individual or entity, comprising a taxpayer, a withholding agent and a collecting agent having tax rights and obligations pursuant to statutory tax provisions.

12.

Tax Identification Number is a number issued to Taxpayers as a means of tax administration that is used as a personal identity or Taxpayer identity in conducting their tax rights and obligations.

13.

Periodic Tax Return is a Tax Return for a particular Taxable Period.

14.

Tax Payment Slip is a receipt of tax payment or remittance using a specific form or other means to the state treasury, through a place of payment appointed by the Minister.

15.

Taxable Period is a period used as the basis for a Taxpayer to calculate, remit and file taxes payable in a certain period as stipulated by statutory provisions in the field of taxation.

16.

Minister is the minister who administers governmental affairs in the field of state finances.

 

 

(1)

Value Added Tax is payable on supplies of:

 

a.

insurance agency services by Insurance Agents to Insurance Companies or Sharia Insurance Companies;

 

b.

insurance brokerage services by insurance brokerage companies to Insurance Companies and/or Sharia Insurance Companies; and

 

c.

reinsurance brokerage services by reinsurance brokerage companies to reinsurance companies and/or sharia reinsurance companies.

(2)

Insurance agency services referred to in paragraph (1) subparagraph a are services by insurance agents in the context of representing Insurance Companies or Sharia Insurance Companies to market insurance products or sharia insurance products.

(3)

Insurance brokerage services referred to in paragraph (1) subparagraph b are consulting and/or intermediary services in the cancellation of insurance or sharia insurance and the handling of claims settlement by acting for and on behalf of the policyholder, the insured or the participant.

(4)

Reinsurance brokerage services referred to in paragraph (1) subparagraph c are consulting and/or intermediary services in the placement of reinsurance or the placement of sharia reinsurance and the handling of claims settlement by acting for and on behalf of insurance companies, sharia insurance companies, guarantee companies, sharia guarantee companies, reinsurance companies or sharia reinsurance companies that place reinsurance or sharia reinsurance.

(5)

Insurance brokerage companies referred to in paragraph (1) subparagraph b are companies that provide consulting and/or intermediary services in the cancellation of insurance or sharia insurance and the handling of claims settlement by acting for and on behalf of the policyholder, the insured or the participant.

(6)

Reinsurance brokerage companies referred to in paragraph (1) subparagraph c are companies that provide consulting and/or intermediary services in the placement of reinsurance or the placement of sharia reinsurance and the handling of claims settlement by acting for and on behalf of insurance companies, sharia insurance companies, guarantee companies, sharia guarantee companies, reinsurance companies or sharia reinsurance companies that place reinsurance or sharia reinsurance.

(7)

Reinsurance companies referred to in paragraph (1) subparagraph c are companies that provide reinsurance services for the risks assumed by insurance companies, guarantee companies or other reinsurance companies.

(8)

Sharia reinsurance companies referred to in paragraph (1) subparagraph c are companies that conduct risk management business based on sharia principles on the risks assumed by sharia insurance companies, sharia guarantee companies or other sharia reinsurance companies.

(9)

Value Added Tax payable referred to in paragraph (1) is collected, remitted and filed by Insurance Companies, Sharia Insurance Companies, reinsurance companies or sharia reinsurance companies appointed as Value Added Tax collecting agents pursuant to this Ministerial Regulation.

 

 

(1)

Value Added Tax payable referred to in Article 2 paragraph (1) shall be collected and remitted at a certain amount.

(2)

Certain amount referred to in paragraph (1) amounts to:

 

a.

10% (ten per cent) of the Value Added Tax rate stipulated under Article 7 paragraph (1) of the Value Added Tax Law multiplied by the commission or remuneration in whatever name and form paid to the Insurance Agent; or

 

b.

20% (twenty per cent) of the Value Added Tax rate stipulated under Article 7 paragraph (1) of the Value Added Tax Law multiplied by the commission or remuneration in whatever name and form received by the insurance brokerage company or reinsurance brokerage company.

(3)

Value Added Tax payable rate referred to in paragraph (2):

 

a.

amounts to 11% (eleven per cent) which will take effect on 1 April 2022; and

 

b.

amounts to 12% (twelve per cent) which will take effect when the application of the Value Added Tax rate stipulated under Article 7 paragraph (1) subparagraph b of the Value Added Tax Law is enacted.

(4)

Commission or remuneration referred to in paragraph (2) is the value of the payment before being collected by income tax or other levies.

(5)

Included in the commission or remuneration referred to in paragraph (2) subparagraph a is the commission or remuneration paid by Insurance Companies or Sharia Insurance Companies to Insurance Agents based on the receipt of commission or remuneration for the Insurance Agents under their management.

 

 

(1)

Insurance agents, insurance brokerage companies and reinsurance brokerage companies must report their businesses to the tax office whose working area includes the residence or domicile and/or the place of business to be registered as Taxable Persons .

(2)

The obligation of Insurance Agents, insurance brokerage companies and reinsurance brokerage companies to be registered as Taxable Persons referred to in paragraph (1) also applies to Insurance Agents, insurance brokerage companies and reinsurance brokerage companies that fulfill the criteria as small-scale entrepreneurs pursuant to statutory provisions on the threshold of small-scale Value Added Tax entrepreneurs.

(3)

Insurance Agents that already have Tax Identification Numbers are deemed to have been registered as Taxable Persons .

(4)

Insurance Agents that do not yet have a tax identification number are obliged to register with the tax office whose working area includes the residence or domicile and/or the place of business to be given a tax identification number.

(5)

In the event that Insurance Agents, in addition to supplying insurance agency services, also supply other Taxable Goods and/or Taxable Services, the Insurance Agents are obliged to report their business to be registered as Taxable Persons insofar as the total turnover of their business exceeds the threshold of small-scale entrepreneurs pursuant to statutory provisions in the field of taxation.

(6)

Insurance brokerage companies and reinsurance brokerage companies referred to in paragraph (1) are registered as Taxable Persons pursuant to statutory provisions in the field of taxation.

 

 

(1)

Insurance agents, insurance brokerage companies and reinsurance brokerage companies as Taxable Persons are obliged to prepare Tax Invoices for supplies of insurance agency services, insurance brokerage services and reinsurance brokerage services.

(2)

Tax Invoices referred to in paragraph (1) may be in the form of:

 

a.

a statement of account from the Insurance Companies or Sharia Insurance Companies to the Insurance Agents; or

 

b.

an invoice for the supply of insurance brokerage services or reinsurance brokerage services by insurance brokerage companies and reinsurance brokerage companies,

(3)

Certain documents referred to in paragraph (2) subparagraph a are prepared through the Insurance Company or Sharia Insurance Company systems.

(4)

Certain documents referred to in paragraph (2) shall at least contain:

 

a.

the name and Tax Identification Number of the Taxable Person supplying insurance agency services, insurance brokerage services or reinsurance brokerage services;

 

b.

the serial number and date of the documents generated by the Taxable Persons system;

 

c.

the value of the commission or remuneration in whatever name and form received by the Taxable Persons ; and

 

d.

the amount of collected Value Added Tax.

(5)

Certain documents referred to in paragraph (2) must be prepared:

 

a.

no later than the end of the following month after the month the payment in which the commission or remuneration in whatever name and form is received by the Insurance Agent; or

 

b.

upon the supply of insurance brokerage services or reinsurance brokerage services pursuant to statutory provisions in the field of taxation.

 

 

(1)

Insurance Companies, Sharia Insurance Companies, reinsurance companies or sharia reinsurance companies as Value Added Tax collecting agents must withhold Value Added Tax referred to in Article 2 paragraph (1) upon:

 

a.

the  payment of commission or remuneration by Value Added Tax collecting agents to Insurance Agents; or

 

b.

the receipt of premium payments by Value Added Tax collecting agents from insurance brokerage companies or reinsurance brokerage companies.

(2)

Value Added Tax collecting agents referred to in paragraph (1) are obliged to remit the Value Added Tax that has been collected on all commissions or remunerations paid to the Insurance Agents, insurance brokerage companies or reinsurance brokerage companies within 1 (one) Taxable Period using 1 (one) Tax Payment Slip or other administrative means equivalent to the Tax Payment Slip.

(3)

Remittance of Value Added Tax referred to in paragraph (2) shall be carried out on behalf of the Value Added Tax collecting agent for all Insurance Agents, insurance brokerage companies or reinsurance brokerage companies.

(4)

Remittance of Value Added Tax as referred to in paragraph (2) shall be carried out no later than the end of the following month after the Taxable Period in which the collection referred to in paragraph (1) is carried out ends and before the Periodic Value Added Tax Return for Value Added Tax collecting agent is filed.

(5)

Provisions on the sample collection and remittance of Value Added Tax by Value Added Tax collecting agents referred to in paragraph (1) and paragraph (2) are outlined in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

(1)

Insurance Companies, Sharia Insurance Companies, reinsurance companies or sharia reinsurance companies as Value Added Tax collecting agents are obliged to file Value Added Tax that has been collected and remitted referred to in Article 6 paragraph (2) using Periodic Value Added Tax Returns for Value Added Tax collecting agents no later than the end of the following month after the Taxable Period in which the collection referred to in paragraph (1) is carried out ends.

(2)

Provisions on the sample completion of Periodic Value Added Tax Returns for Value Added Tax collecting agents by Value Added Tax collecting agents referred to in paragraph (1) are outlined in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

(1)

Insurance Agents referred to in Article 4 paragraph (1) are deemed to have filed the calculation of Value Added Tax on supplies of insurance agency services.

(2)

In the event that Insurance Agents:

 

a.

in addition to supplying insurance agency services also supply other Taxable Goods and/or Taxable Services; and

 

b.

until a month in the accounting year, the gross turnover and/or gross revenues for supplies of insurance agency services and supplies of other Taxable Goods and/or Taxable Services do not exceed the threshold of small-scale entrepreneurs pursuant to statutory provisions in the field of taxation,

 

the filing of the Periodic Value Added Tax Return for Insurance Agents complies with the provisions referred to in paragraph (1).

(3)

In the event that Insurance Agents:

 

a.

in addition to supplying insurance agency services also supply other Taxable Goods and/or Taxable Services; and

 

b.

until a month in the accounting year, the gross turnover and/or gross revenues for supplies of insurance agency services and supplies of other Taxable Goods and/or Taxable Services exceed the threshold of small-scale entrepreneurs pursuant to statutory provisions in the field of taxation,

 

Insurance Agents are obliged to withhold, remit and file Value Added Tax payable on supplies of other Taxable Goods and/or Taxable Services pursuant to statutory provisions in the field of taxation.

(4)

Insurance Agents referred to in paragraph (3) are obliged to report supplies of:

 

a.

insurance agency services referred to in Article 2 paragraph (1) subparagraph a; and

 

b.

supplies of other Taxable Goods and/or Taxable Services,

 

in the Periodic Value Added Tax Return pursuant to statutory provisions in the field of taxation.

(5)

Provisions on the sample filing of Periodic Value Added Tax Returns by Insurance Agents referred to in paragraph (1), paragraph (2) and paragraph (3) are outlined in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

Insurance brokerage companies and reinsurance brokerage companies as Taxable Persons are obliged to report supplies of:

a.

insurance brokerage services referred to in Article 2 paragraph (1) subparagraph b and/or reinsurance brokerage services referred to in Article 2 paragraph (1) subparagraph c; and/or

b.

other Taxable Goods and/or Taxable Services,

in the Periodic Value Added Tax Return pursuant to statutory provisions in the field of taxation.

 

Input VAT on acquisitions of Taxable Goods and/or Taxable Services in connection with supplies of insurance agency services, insurance brokerage services and reinsurance brokerage services referred to in Article 2 paragraph (1) cannot be credited by Insurance Agents, insurance brokerage companies and reinsurance brokerage companies.

 

 

In the event of an error in Value Added Tax collecting referred to in Article 3 paragraph (1) which results in the collected Value Added Tax being greater than the tax that should otherwise be collected, for the Value Added Tax over-collection, an application for overbooking or tax refund that should not otherwise be payable may be submitted by the Value Added Tax collecting agent pursuant to statutory provisions in the field of taxation.

 

 

For payments of commissions or remunerations by Value Added Tax collecting agents in connection with supplies of insurance agency services, insurance brokerage services and reinsurance brokerage services that are payable and on which Value Added Tax has been collected by Insurance Agents, insurance brokerage companies or reinsurance brokerage companies prior to the enactment of this Ministerial Regulation, the Insurance Companies, Sharia Insurance Companies, reinsurance companies or sharia reinsurance companies are excluded from the obligation to withhold, remit and file Value Added Tax referred to in Article 2 paragraph (9).

 

 

This Ministerial Regulation shall come into force on 1 April 2022.

 

For public cognisance, this Ministerial Regulation shall be promulgated by placement in the Official Gazette of the Republic of Indonesia.

 

Enacted in Jakarta

on 30 March 2022

MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA,

signed

SRI MULYANI INDRAWATI

 

Promulgated in Jakarta

on 30 March 2022

DIRECTOR GENERAL OF LEGISLATION

MINISTRY OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA,

signed

BENNY RIYANTO

 

OFFICIAL GAZETTE OF THE REPUBLIC OF INDONESIA OF 2022 NUMBER 367