Minister Of Finance Sri Mulyani Makes Tax-Free Tourism Yacht Regulations

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JAKARTA - Finance Minister Sri Mulyani issued new regulations including exempting sales tax levies on imported luxury goods for imports including light sailing vessels (yachts) for tourism.

This rule is set forth in PMK Number 96/PMK.03/2021 concerning Stipulation of Types of Taxable Goods Other than Motor Vehicles Subject to Sales Tax on Luxury Goods and Procedures for Exemption of the Imposition of Sales Tax on Luxury Goods.

This rule was set on July 22 with the date of promulgation on July 26, 2021. However, as stated in the PMK, the effective date on July 26, 2021 was revoked.

The following rules are quoted by VOI from PMK:

CHAPTER III

PROCEDURES FOR EXCLUSION FROM THE IMPOSITION OF SALES TAX ON LUXURY GOODS ON THE IMPORT OR DELIVERY OF TAXABLE GOODS CLASSIFIED IN LUXURY OTHER THAN MOTOR VEHICLES

Article 3

The imposition of PPnBM is excluded on the import or delivery of:

a. firearms bullets and/or other firearms for state purposes;

b. aircraft with propulsion for state purposes or commercial air transportation;

c. firearms and/or other firearms for state purposes;

d. cruise ships, excursion ships, and/or similar vessels are primarily designed for the transportation of people, ferries of all types and/or yachts for the benefit of the state or public transportation; and

e. yachts for tourism businesses.

Article 13

(1) PPnBM that has been excluded and/or underpaid PPN on the import or acquisition of Taxable Goods in the form of yachts as referred to in Article 3 letter e must be paid if within a period of 4 (four) years from the time of import or acquisition of the Subjected Goods. The tax:

a. used not in accordance with the original purpose; or

b. transferred to another party.

Meanwhile, Director of Extension, Services and Public Relations of the Directorate General of Taxes at the Ministry of Finance, Neilmaldrin Noor, said the marine tourism industry needs to be encouraged because it is one of the sectors that has the potential to be developed.

"Yachts that are not used for tourism will still be subject to PPnBM at a rate of 75 percent," he said, quoted by Antara, Friday, July 30.

In addition, the exemption from the imposition of PPnBM is also granted for the delivery or import of firearms bullets and other firearms for state needs as well as aircraft with propulsion for state purposes and commercial air transportation.

Then also given for the surrender or import of firearms and other firearms for state purposes.

This includes cruise ships, excursion ships and similar vessels, especially those designed for the transport of people as well as ferries of all types and yachts for the benefit of the state or public transport.

In addition, the government has re-arranged four groups of tariffs for the imposition of PPnBM on types of taxable goods classified as luxury other than motorized vehicles.

The rearrangement is 20 percent for luxury residential groups such as luxury homes, apartments, condominiums, town houses, and the like.

Furthermore, 40 percent for the group of hot air balloons and piloted hot air balloons, other aircraft without propulsion as well as groups of firearms and other firearms.

Next, 50 percent for groups of aircraft other than those referred to in group two as well as groups of firearms and other firearms.

Finally, it is 75 percent for yachts, excursion boats, and similar vessels designed primarily for the transport of people, ferries of all types, and yachts.

Neil said the issuance of this policy aims to simplify administrative procedures and provide legal certainty which is ultimately expected to reduce the operational costs of taxpayers.

This policy is an implementing rule of Government Regulation Number 61 of 2020 concerning Taxable Goods Classified as Luxury Apart from Motor Vehicles Subject to Sales Tax on Luxury Goods.

Article 3 of the government regulation mandates the minister of finance to regulate the types of taxable goods other than motorized vehicles that are subject to PPnBM and the procedures for their exclusion.