Ministry of Finance Extends 0% Import Duty on Electric Vehicles Until 2025

Starting 15 February 2024, importers of electric vehicles can enjoy import duty exemption facilities. The government has just released Minister of Finance Regulation (PMK) Number 10 of 2024 which sets the import duty rate for electric vehicles at 0%.

This facility will be provided for a period of time until December 2025. Specifically, electric vehicles that are entitled to the facility are battery-based or Battery Electric Vehicles for road transportation.

To get this facility, two conditions must be met by importers. First, attach the approval of the utilization of import incentives and /or transfer of electric vehicles issued by the Minister of Investment / Head of the Investment Coordinating Board (BKPM).

Second, include the facility code 87 approval of import incentives and/or transfer of electric cars in the column for fulfilling import requirements/ facilities.

If the two provisions are not met, then imports of electric vehicles are still subject to import duties at generally applicable rates.

For information, PMK Number 10/2024 is a follow-up to the previous provisions issued by the Ministry of Investment or the Investment Coordinating Board (BKPM).

Criteria for Obtaining Facilities

For the criteria for electric vehicles that are entitled to facilities, previously regulated in BKPM Regulation Number 6 of 2023. The regulation stipulates two criteria for vehicles that can get facilities.

First, battery-based electric vehicles are imported in one piece or completely built-up (CBU). Second, battery-based electric vehicles imported in complete condition but not yet assembled or completely knocked down (CKD).

Especially for CKD vehicles, they must meet the requirements, namely, have a domestic component level (TKDN) value of at least 20% to less than 40%.

How to Obtain the Facility

In addition to meeting the terms and criteria above, importers must attach a letter of approval for the utilization of incentives issued by the Minister of Investment/Head of BKPM in the Notification of Imported Goods (PIB) document to obtain this facility.

Furthermore, in the PIB document, importers must also include facility code 87 of the incentive utilization approval in the column for fulfilling the import requirements/facilities.

If these two things are not done or the imported goods are not in accordance with the data listed in the incentive utilization approval letter, they will be subject to the generally applicable import duty rate.

Then, the PIB document containing data on the import of electric vehicles that obtain facilities will be validated by the Indonesia National Single Window (INSW) system. If the validation result states that the data is in accordance with the INSW system, it will make deductions for imported goods.

However, if the INSW validation result states that it is not suitable, the PIB document will be returned to the importer for correction. (ASP/KEN)