Rabu, Agustus 5, 2020

Industrial Business Entities Making Purchases from Farmers to Collect 1% of Value-Added Tax for Certain Agricultural Products

The Fiscal Policy Agency (Badan Kebijakan Fiskal – “BKF”) at the Ministry of Finance has determined that the effective Value-Added Tax (Pajak Pertambahan Nilai – “PPN”) tariff for certain agricultural products has now been reduced to 1%, as addressed under the recently issued Regulation of Minister of Finance No. 89/PMK.010/2020 on Other Values as the Basis for the Imposition of Taxes upon the Handover of Certain Agricultural Products (“Regulation 89/2020”).
The Head of the BKF, Febrio Nathan Kacaribu, has confirmed that as a consequence of the issuance of Regulation 89/2020, farmers may now choose to use other values as the basis for taxes at 10% of the relevant sales prices so that the effective PPN amounts to 1% of the sales price. The various agricultural products that can now use other values encompass estate crops, food crops, ornamental and medicinal plants, timber forest products, and non-timber forest products.
Farmers are required to notify the Director-General of Tax regarding the use of said other value mechanisms when submitting their tax returns during the relevant PPN period. Furthermore, industrial business entities that engage in purchases from farmers are designated as collecting 1% of the PPN and may still credit PPN as input tax (pajak masukan). _(ANT)

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The Fiscal Policy Agency (Badan Kebijakan Fiskal – “BKF”) at the Ministry of Finance has determined that the effective Value-Added Tax (Pajak Pertambahan Nilai – “PPN”) tariff for certain agricultural products has now been reduced to 1%, as addressed under the recently issued Regulation of Minister of Finance No. 89/PMK.010/2020 on Other Values as the Basis for the Imposition of Taxes upon the Handover of Certain Agricultural Products (“Regulation 89/2020”).
The Head of the BKF, Febrio Nathan Kacaribu, has confirmed that as a consequence of the issuance of Regulation 89/2020, farmers may now choose to use other values as the basis for taxes at 10% of the relevant sales prices so that the effective PPN amounts to 1% of the sales price. The various agricultural products that can now use other values encompass estate crops, food crops, ornamental and medicinal plants, timber forest products, and non-timber forest products.
Farmers are required to notify the Director-General of Tax regarding the use of said other value mechanisms when submitting their tax returns during the relevant PPN period. Furthermore, industrial business entities that engage in purchases from farmers are designated as collecting 1% of the PPN and may still credit PPN as input tax (pajak masukan). _(ANT)

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