On March 30, 2022, the Government issued Regulation of the Minister of Finance No. 65/PMK.03/2022 (PMK 65/2022) regarding Value Added Tax on The Delivery of Used Motorized Vehicles.
The main points regulated in PMK 65/2022 are the followings:
- VAT object
Used Motorized Vehicles → do not include delivery of Taxable Goods in the form of assets that based on its original purpose are not for sale as regulated in Article 16D of the VAT Law.
- VAT Subject
Taxable Entrepreneurs engage in certain business activities who delivering used motorized vehicles.
- Tax Base
Based on a certain amount as follows:
- Effective tax rate = 1.1% x Selling Price → Effective on April 1, 2022.
- Effective tax rate = 1.2% x Selling Price → Effective no later than January 1, 2025.
- Tax Credit
- Input Taxrelated to the delivery of used motor vehicles by Taxable Enterprises engaging in certain business activities who deliver used motor vehicles can not be credited.
- Taxable enterprises engaged in the delivery of used motorized vehicles in a tax period conducting:
- deliveries subject to VAT and the Input Tax related to the deliveries can be credited; and
- deliveries subject to VAT and the Input Tax related to the deliveries can not be credited and/or deliveries are not subject to VAT,
the amount of Input Tax that can be credited for deliveries subject to VAT shall be calculated using guidelines in Article 9 Paragraph (5) and Paragraph (6) of the VAT Law.
This regulation shall come into force on April 1, 2022.
SALAKI – 042022 – PMK No. 65_PMPK.03_2022