To encourage national economic growth, especially in the housing industry sector, the Indonesian government provides incentives in the form of VAT borne by the government (PPN DTP) on the transfer of landed houses and apartment units. The incentives are based on Minister of Finance Regulation No. 120 Year 2023 concerning Value Added Tax on the transfer of Landed Houses and Apartment Units borne by the Government for Fiscal Year 2023 (PMK-120/2023).
The major provisions can be summarised as follows:
It applies to landed houses and apartment units with prices below IDR 5 billion. The PPN DTP is applied on the tax base up to IDR 2 billion, calculated as follows:
100% PPN DTP for transfers within the period November 1 2023, to June 30 2024. The transfer date refers to the minutes of handover (Berita Acara Serah Terima).
50% PPN DTP for transfers within the period July 1 2024, to December 31 2024.
Individuals who have made a down payment or first instalment for a landed house or apartment unit to the taxable enterprise (PKP) seller before the enforcement of PMK-120/2023 can benefit from PPN DTP if the down payment or first instalment was made on or after September 1 2023, but the facility is granted only for the VAT on the remaining instalments and settlements made during the period of the DTP VAT facility from November 1 2023 to December 31 2024.
Other requirements:
Have a house identity code;
Physical handover of the house is no later than December 31 2024;
The new house is transferred in a ready-to-be-used condition;
The facility is for a maximum of one landed house or apartment unit for one person; and
The facility cannot be transferred again within one year.
PMK-120/2023 became effective on November 21 2023.
VAT on the delivery of particular battery-based electric vehicles
To support the acceleration of the transition from fossil fuel usage to electric energy and to enhance public interest in battery-based electric motor vehicles, as well as to support the battery-based electric motor vehicle programme, the Minister of Finance (MoF) has issued Regulation No. 116 Year 2023 to amend MoF Regulation No. 38 Year 2023 regarding Value Added Tax on the Delivery of Certain Four-Wheeled Battery Electric Vehicles and Certain Bus Battery Electric Vehicles borne by the Government for Fiscal Year 2023 (PMK-116/2023).
The major changes are as follows:
The new regulation requires that the text “PPN Ditanggung Pemerintah Sesuai Pmk Nomor 38 Tahun 2023” ("VAT borne by the government pursuant to PMK number 38 of 2023") be written on the tax invoice;
PKPs that make deliveries of certain electric cars and electric buses are entitled to accelerated restitution facilities as low-risk PKPs, as referred to in Article 9 paragraph (4c) of the Value Added Tax Law;
Accelerated restitution is obtained by the PKP without stipulation as a low-risk PKP by the Directorate General of Taxation;
To obtain accelerated restitution, the PKP must choose to receive a preliminary refund of overpaid taxes based on Article 9 paragraph (4c) of the Value Added Tax Law when completing its monthly VAT return;
The original monthly VAT return is eligible for the accelerated restitution facility, as is an amendment of the monthly VAT return submitted to the tax office no later than January 31 2024; and
This does not apply to PKPs that solely deliver an eligible vehicle for their own use and/or as a free gift.
PMK-116/2023 became effective on November 22 2023.
