A number of tax provisions regarding the transfer of gold have been amended through Minister of Finance Regulation (PMK) Number 48 of 2023.
This provision includes the transfer of gold jewelry, gold bullion, and including jewelry whose materials are not made of gold, gemstones, or other similar stones.
Previously, tax provisions related to gold transfer were contained in several regulations such as PMK Number 34/PMK.010/2017 which has been amended by PMK Number 41/PMK.010/2022 and PMK Number 30/PMK.03/2014.
These changes are made to provide legal certainty, justice, convenience and simplify the imposition of taxes on gold, both for Value Added Tax (VAT) and Income Tax objects.
VAT on Gold Jewelry
With this new rule, the rate of Value Added Tax (VAT) on the transfer of gold by VAT-Registered Persons both gold manufacturers and gold traders is lower than before.
Previously, the VAT rate on gold jewelry was set at 10% multiplied by the Tax Base for other values, which was set at 20% of the selling price. In other words, the amount of VAT payable is 2% of the selling price.
In the latest regulation, the transfer of gold from a VAT-Registered Person who manufactures gold jewelry on their own production to other gold jewelry manufacturers and gold jewelry traders is subject to a certain amount of VAT, the rate of which is set at 1.1% of the selling price.
For information, the amount of the rate is derived from the calculation of 10% multiplied by the applicable VAT rate in the VAT Law, namely 11%.
Meanwhile, the transfer of gold jewelry from VAT-Registered Persons of gold jewelry manufacturers for their own production to end consumers are subject to a VAT rate of 1.65% of the selling price or 15% of the applicable VAT rate of 11%.
Then, for the transfer of gold jewelry from gold jewelry traders to end consumers and other gold jewelry traders, a VAT rate of 1.1% of the selling price is also imposed, provided that it is accompanied by a tax invoice or document equivalent to a tax invoice.
If a tax invoice is not included, the transfer of gold jewelry from traders to end consumers is subject to a VAT rate of 1.65% of the selling price.
In addition, specifically for the delivery by VAT-Registered Person of Gold Jewelry Traders to Gold Jewelry Manufacturers, a certain amount is set at 0% of the selling price.
Income Tax on Gold Jewelry
In addition to being the object of VAT, the transfer of gold jewelry is also the object of Income Tax Article (ITA) 22 which is payable and collected when the sale is made.
However, the imposition of ITA 22 applies to the transfer of gold jewelry from manufacturers to traders, not end consumers with a rate set at 0.25% of the selling price, lower than the previous rate of 0.45% of the selling price.
It should be noted that the imposition of ITA 22 is not final, so it can be calculated as an income tax payment in the current year.
VAT on Gold Bullion
The imposition of VAT on the transfer of gold bullion is actually still the same as the provisions in Law Number 7 of 2021 concerning Harmonization of Tax Regulations and Government Regulation Number 49 of 2022.
The transfer of gold bars is grouped into gold bars for foreign exchange reserves, in this case, the authority of Bank Indonesia, and the transfer of gold bars other than for foreign exchange reserves.
For the purposes of strengthening foreign exchange reserves, gold bullion is not subject to VAT. However, other than for the purpose of strengthening foreign exchange reserves, gold bullion is subject to VAT with a VAT not-collected facility.
Income Tax on Gold Bullion
The income tax provisions on gold bullion regulated in the latest regulation have changed in terms of lower rates than the old regulation.
Based on the latest regulation, every transfer of gold bullion from entrepreneurs to non-end consumers will be subject to ITA 22 of 0.25% of the selling price.
Previously, as stipulated in PMK Number 34/PMK.010/2017, the ITA 22 rate imposed on the transfer of gold bullion was set at 0.45% of the selling price.
Jewelry other than gold
In addition to regulating the taxation mechanism on gold jewelry, this regulation also confirms the tax provisions on the transfer of jewelry other than gold. This includes gemstones and other stones.
The transfer of jewelry other than gold will be subject to VAT at a rate of 1.1% of the selling price and ITA 22 at a rate of 0.25% of the selling price. The imposition of ITA 22 is not final and can be calculated as an income tax payment in the current year.
The imposition of this tax does not apply to the transfer of gold that is not gold to end consumers, taxpayers who are subject to final income tax, or taxpayers who have a Certificate of Free Collection of ITA 22.
Gold and Jewelry Transfer Services
The government also confirmed the provisions of VAT and income tax on business activities in the form of services related to the transfer of gold jewelry, gold bars, and jewelry other than gold.
These services include:
- Modification services
- Repair services
- Coating services
- Gilding service
- Cleaning services
- Other services are other names of the aforementioned services.
So, the provision of these services will be subject to VAT at 1.1% of the service reimbursement.
Meanwhile, the compensation received will be subject to Article 21 Income Tax or Article 23 Income Tax, depending on whether the party paying the compensation is in the form of an individual or an entity. (ASP/KEN)
