Jakarta – The 12 percent VAT rate is proposed to apply only to luxury goods. For vehicles, it is proposed to be imposed only on luxury cars.
The House of Representatives (DPR) proposes that the 12 percent VAT (Value Added Tax) that will take effect from January 2025 should only be imposed on luxury goods. DPR Deputy Chairman Sufmi Dasco said that a number of luxury goods include cars, apartments, and luxury homes.
“Luxury cars, luxury apartments, luxury homes, all of which are luxurious,” Dasco said as quoted by CNBC Indonesia.
Meanwhile, basic goods as well as services that directly touch the community will still be taxed 11 percent. Dasco did not provide details regarding the type of luxury car in question. However, it is known that there are several vehicles that are subject to Sales Tax on Luxury Goods (PPnBM) as stated in the Minister of Finance Regulation number 141 / PMK.010 / 2021 concerning Determination of Types of Motor Vehicles subject to Sales Tax on Luxury Goods and Procedures for Imposing Provision and Administration of Exemption, and Return of Sales Tax on Luxury Goods.
Article 2 of the regulation explains, types of taxable goods classified as luxury in the form of motorized vehicles for transportation of less than 10 (ten) people including drivers with a cylinder capacity of up to 3,000 (three thousand) cc, which are subject to PPnBM at the rate of:
a. 15% (fifteen percent);
b. 20% (twenty percent);
c. 25% (twenty-five percent); or
d. 40% (forty percent),
Furthermore, Article 3 refers to the type of taxable goods classified as luxury in the form of motorized vehicles for transportation of less than 10 (ten) people including the driver with a cylinder capacity of more than 3,000 (three thousand) cc up to 4,000 (four thousand) cc, which is subject to PPnBM at the rate of:
a. 40% (forty percent);
b. 50% (fifty percent);
c. 60% (sixty percent); or
d. 70% (seventy percent),
In addition to four-wheelers, there are also other motorized vehicles classified as luxurious referring to articles 22 and 23 with the following details.
Article 22
– motorized vehicles with 2 (two) or 3 (three) wheels with a cylinder capacity of more than 250 (two hundred fifty) cc up to 500 (five hundred) cc; or
– special vehicles made for travel on snow, on beaches, on mountains, or similar vehicles, which are subject to PPnBM at a rate of 60 percent.
Article 23
Then the types of taxable goods classified as luxury, in the form of:
a. motorized vehicles with a cylinder content capacity of more than 4,000 (four thousand) cc;
b. motorized vehicles with 2 (two) or 3 (three) wheels with a cylinder capacity of more than 500 (five hundred) cc; or
c. trailers, semi-trailers of the caravan type, for housing or camping, which are subject to PPnBM at a rate of 95 percent
