Govt. Introduces Updated Provisions on PPN and/or PPnBM Exemptions and Non-Impositions for Certain Taxable Goods and/or Services from Outside Indonesian Customs-and-Excise Areas

In order to adjust the framework for the granting of facilities for Value-Added Tax (pajak pertambahan nilai – “PPN”) and Luxury-Goods Sales Tax (Pajak Penjualan atas Barang Mewah – “PPnBM”) (collectively referred to as “Taxation Facilities”) originally set under Law No. 7 of 2021 on the Harmonization of Tax Regulations (“Law 7/2021”), the government has issued Regulation No. 49 0f 2022 (“Regulation 49/2022”), which sets out a number of updated provisions that address the following areas: 1) Exemptions to PPN impositions; and 2) Non-imposition of PPN or PPN and PPnBM upon the following: a) Importation and/or deliveries of certain taxable goods and/or services (collectively referred to as “Taxable Objects”); and 2) Utilization of certain taxable services deriving from outside of Indonesian customs-and-excise areas (“Customs Areas”).[1]