The government has taken steps to simplify the process of exempting VAT and VAT on luxury goods for the representatives of foreign countries, international organization, and their officers. This is stated in Regulation of The Minister of Finance Number 59 of 2024 On The Procedures For Granting Exemption From Value Added Tax and Value Added Tax On Luxury Goods To Representatives of Foreign Countries and International Organization and Their Officials. This regulation was passed on September 2, 2024 and came into force on October 1, 2024. In accordance to article 2 paragraph 3, the exemption can be granted through two mechanisms, namely the exemption granted by the minister without using an exemption letter and using an exemption letter. The taxable goods and/or the taxable services that are granted exemption are the taxable goods and/or the taxable services that are not used to earn income in Indonesia for the purpose of obtaining profits such as motorized vehicles and other than motorized vehicles. As for other than motorized vehicles, namely in the form of land and/or buildings obtained by representatives of foreign countries and officials of international organization. For the taxable services in the form of services received and utilized by representatives of foreign countries and international organization in accordance with article 5 paragraph 2 and 3.
For the exemption requirements stated in article 9, representatives of foreign countries and international organizations and their officials can be granted exemption by using an exemption certificate and must have a tax identification number. The supporting proof are also one of the exemption requirements, including proforma invoice, copy of purchase order, and other documents required by the related ministry. For the acquiring of motor vehicles, it is required to additionally provide a statement letter of vehicle ownership details and a sale and purchase agreement document. To obtain an exemption letter, representatives of foreign countries or officials of representatives of foreign countries and international organizations or officials of international organizations submit an application to the head of the tax office equipped with a letter of recommendation and the supporting proof in accordance with Article 11 paragraph 1.
By Tommy HO – Managing Partner TBrights
TBrights is a Tax Consultant in Indonesia which is now an Integrated Business Service in Indonesia that can provide comprehensive tax and business services.
Reference:
- Minister of Finance Regulation Number 59 Year 2024 on Procedures for Granting Exemption from Value Added Tax or Value Added Tax and Sales Tax on Luxury Goods to Representatives of Foreign Countries and International Agencies and their Officials.
