PPN Updates: Insurance Agent Services, Insurance Broker Services and Reinsurance Broker Services to Be Taxed at 1.1% From 1 April 2022

One of the 14 recent regulations that address the imposition of Value Added Tax (Pajak Pertambahan Nilai – “PPN”) officially issued by the Minister of Finance (“Minister”)[1] is Regulation of the Minister No. 67/PMK.03/2022 on Value Added Tax on the Delivery of Insurance Agent Services, Insurance Broker Services and Reinsurance Broker Services (“Regulation 67/2022”).

This edition of Indonesian Legal Brief offers an analysis of the provisions stipulated under Regulation 67/2022, specifically as they relate to the following matters:

1. Payable PPN;
2. Appointment as taxable businesses;
3. Tax invoices;
4. PPN collection; and
5. Reporting.

Payable PPN

According to Regulation 67/2022, PPN is payable in relation to the following insurance-related services:[2]

1. Insurance agent services offered by insurance agents to insurance companies or sharia insurance companies;
2. Insurance brokerage services offered by insurance brokerage companies to insurance companies and/or sharia insurance companies; and
3. Reinsurance brokerage services offered by reinsurance brokerage companies to reinsurance companies and/or sharia reinsurance companies.

Payable PPN, as outlined above, should be collected and paid at the following rates:[3]

1. 10% of the PPN tariff set under Article 7, Paragraph (1) of Law No. 8 of 1983 on Value Added Tax on Goods and Services and Sales Tax on Luxury Goods, as amended by Law No. 7 of 2021 on the Harmonization of Taxation Regulations (collectively referred to as “PPN Law......