The increase in the Value Added Tax (VAT) rate as stipulated in the Harmonized Tax Law (HPP Law) also has an impact on tax policy on Trade Through Electronic System (PMSE) or e-commerce.
In the latest provisions, namely the Minister of Finance Regulation (PMK) Number 60/PMK.03/2022, the government adjusts the VAT rate on the transfer of taxable intangible goods and taxable services carried out through PMSE to 11% starting 1 April 2022 and will be increased to 12% at 2025 the latest.
With this change, the previous provision regarding PMSE VAT collection, PMK Number 48/PMK.03/2020 is declared invalid. The change in rate follows the provisions of the generally accepted VAT rate, as regulated in the HPP Law.
In addition to changing the tariff rate, the new regulation also amends the provisions concerning digital companies that have the right to collect, pay and report PMSE VAT. Previously only appointed companies were entitled to collect PMSE VAT, now these companies must also issue commercial invoices, billing, order receipts or other similar documents.
Other Terms Remain Unchanged
In general, the provisions related to the PMSE VAT collection are still relatively the same as the old rules. Including the criteria for digital companies that sell taxable intangible goods or taxable services that are appointed as PMSE VAT collectors.
The criteria in question include the transaction value for the purchasing goods or using services with a certain amount in 12 months as well as the amount of traffic or access in 12 months. The amount of the transaction and traffic criteria still refer to the Regulation of the Director General of Taxes Number 12-PER/PJ/2020.
Similarly, the types of intangible taxable goods and taxable services that must be subject to PMSE VAT remain unchanged from the previous regulation. Some of these include digital content marketed by digital companies in audio, visual or audiovisual formats.
The following are intangible taxable goods or digital content that are subject to PMSE VAT in Indonesia:
- The use of copyrights, scientific papers, patents, designs, brands, intellectual property rights and other similar rights.
- The use of industrial, commercial or scientific equipment
- The use of scientific, engineering, industrial or commercial knowledge or information
- The use of recorded visual, sound or both, to be distributed to the public via satellite, cable, fiber optic or other technology or for radio and television.
- The use of films or videotapes for television and radio broadcasts.
Meanwhile, the use of taxable services that are subject to PMSE VAT is included in digital services.
Creating PMSE VAT Invoice
Digital companies appointed to collect PMSE VAT must make tax invoices in the form of proof of collection such as commercial invoices, billing, order receipts or other similar documents.
In addition, digital companies must also deposit the PMSE VAT they collect into the state treasury account in the form of Rupiah, United States Dollars or other currencies determined by the DGT.
Furthermore, PMSE VAT collectors must report it every three tax periods or quarterly electronically, no later than the end of the following month after the quarter period ends.
The report contains the number of buyers of goods or service recipients, the number of payments received, the amount of PMSE VAT collected and details of the VAT transactions collected.