Jakarta – The government has announced that the 12% Value-Added Tax (VAT) applies only to goods and services classified as luxury. Based on this, almost all cars are subject to 12% VAT. But what about motorcycles?
Finance Minister Sri Mulyani has revealed the list of goods affected by the 12% VAT, effective January 1, 2025. Motor vehicles already subject to the Luxury Goods Sales Tax (PPnBM) fall under this category.
“Luxury yachts, except for public transportation like cruises and yachts, are subject to 12% VAT, as are motor vehicles already subject to PPnBM. That’s it; others are not affected,” Sri Mulyani explained during her presentation at the Ministry of Finance office in Jakarta.
PPnBM for motor vehicles is regulated under Minister of Finance Regulation No. 141/PMK.010/2021 concerning the Types of Motor Vehicles Subject to Luxury Goods Sales Tax, along with the Procedures for Levying, Granting, Administering Exemptions, and Refunds for the Tax.
Under these regulations, nearly all cars are subject to PPnBM. However, for motorcycles, not all are classified as luxury goods subject to PPnBM.
Motorcycles Subject to PPnBM
According to Articles 22 and 23 of PMK No. 141 of 2021, motorcycles categorized as luxury include those with engine capacities of more than 250 cc up to 500 cc and those above 500 cc.
- Motorcycles with engine capacities of more than 250 cc up to 500 cc are subject to a 60% PPnBM.
- Motorcycles with engines above 500 cc are subject to a 95% PPnBM.
Article 26 of PMK No. 141 of 2021 further stipulates that PPnBM is not imposed on the import or delivery of two-wheeled motor vehicles with engine capacities of up to 250 cc.
Thus, motorcycles with engines below 250 cc are not subject to PPnBM and remain subject to the standard 11% VAT rather than the increased 12% VAT.
