Regulation Update
Government Releases Mortgage Interest Subsidies, Tax ID Number is Required

Monday, 05 October 2020

Government Releases Mortgage Interest Subsidies, Tax ID Number is Required

The government will provide assistance in the form of interest subsidies or margin subsidies to people affected by the Corona Virus Disease 2019 (Covid-19) pandemic, through Regulation of the Minister of Finance (PMK) number 138/PMK.05/2020.

Previously, the provisions of interest subsidies or margin subsidies were regulated in PMK number 65 / PMK.05 / 2020, which is a derivative of Government Regulation (PP) Number 23 of 2020, regarding the National Economic Recovery (PEN) program in the field of state finance.

In the latest regulation, the government emphasizes that this facility can be enjoyed by bank debtors, financing companies, recipients of the Government Credit Program from Government Credit Channeling institutions, and other debtors, namely recipients of Housing Loan or Mortgage Loans (KPR) with a maximum of type 70 and automotive loans (KKB) used by businesses, for six months.

Read: Tax Issue Amid Polemic on Increase in BPJS Kesehatan 

As in the previous provision, the government did not specify that mortgage loans and automotive loans were included in the facility recipient.

With this subsidy assistance, the government hopes that debtors who are experiencing financial problems due to the pandemic can continue to run their businesses. Thus, national economic activities can be maintained, and the National Economic Recovery Program runs effectively.

The amount of interest subsidies or margin subsidies are calculated using the following formula:

Amount of interest or margin subsidies X Outstanding X Number of days of interest or margin

The amount of interest subsidies or margin subsidies depend on the type and value of the credit ceiling owned by the debtor. While the outstanding is the outstanding principal of the loan or principal of financing that must be fulfilled by the debtor.

Interest Subsidies for Banking, Financing, and Mortgage Loan Debtors

The amount of interest subsidies for banking and financing debtors are distinguished by the credit ceiling value and the period of use of the subsidy. For those with a ceiling value of IDR 500 million and below, the subsidy is 6% in the first three months and 3% in the following three months.

Meanwhile, for those with a ceiling value between IDR 500 million and IDR 10 billion, the amount of subsidies received is 3% in the first three months and 2% for the remaining three months.

To obtain this facility, apart from having a maximum credit ceiling value of IDR 10 billion, the debtors must meet other requirements, namely:

  1. Have a maximum remaining principal of loan or financing until 29 February 2020
  2. For those with a credit ceiling above IDR 50 million, are not included in the national blacklist for loans.
  3. Have a current loan category (performing loan) with collectibility of 1 or 2 calculated as of 29 February 2020
  4. Have a Taxpayer Identification Number (NPWP).

Especially for mortgage and vehicle financing debtors, other provisions must be considered as a condition for obtaining facilities, namely creditors whose value of housing loan agreement and financing are between IDR 500 million and IDR 10 billion must get restructuring from the credit channeling institution.

Interest Subsidies for Debtors of Government Credit Channeling Institutions

The amount of subsidies that can be obtained by debtors of the national credit program can be divided into three categories, the first of which has a maximum ceiling of IDR 10 million, the second which is above IDR 10 million to IDR 500 million, and the last is between IDR 500 million and IDR 10 billion.

For those whose ceiling value is maximum IDR 10 million, interest subsidies or margin subsidies are given a maximum of 25% for six months. While, for those whose ceiling value is above IDR 10 million to IDR 500 million, interest subsidies or margin subsidies are 6% in the first three months and 3% in the next three months.

Read: Viewing Family from Tax Perspective 

As for those whose credit value is between IDR 500 million to IDR 10 billion, interest subsidies or margin subsidies are 3% in the first three months and 2% in the following three months.

To get interest subsidies, debtors of the government credit program must meet the following conditions:

  1. The credit ceiling value is IDR 10 billion
  2. Have a maximum remaining principal of the loan or financing until 29 February 2020
  3. Have a current loan category (performing loan) with collectibility of 1 or 2 calculated as of 29 February 2020

Maximum of Two Credit Agreements

In addition to the terms and conditions mentioned, in the latest regulation, the government also limits the provision of assistance to a maximum of only two credit agreements, depending on the cumulative ceiling value of the credit agreement owned.

For debtors who have more than one credit agreement with a cumulative value of IDR 500 million and below, they can get interest subsidy assistance or maximum margin subsidies for two contracts, with the largest credit or financing value.

As for debtors who have more than one credit agreement, with a value between IDR 500 million to IDR 10 billion, the maximum can only get facilities for one contract, with the largest value.



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