Get To Know The Sales Tax On Luxury Goods: Definition, Criteria, And List Of Goods!

Illustration of luxury goods subject to PPnBM (Photo: Antara)

YOGYAKARTA – Sales Tax on Luxury Goods (PPnBM) is a type of tax that you need to know, especially if you are involved in buying and selling red goods.

PPnBM is imposed on luxury goods. PPnBM reporting is carried out with Periodic VAT 111 SPT.

Following are the definitions, criteria, tariff rates and a list of luxury goods subject to PPnBM.

Definition of Luxury Goods Sales Tax

Quoted from the official website of the Ministry of Finance (Kemenkeu), Sales Tax on Luxury Goods (PPnBM) is a tax imposed on luxury goods to manufacturers to produce or import goods in their business or work activities. PPnBM is only imposed once when the goods are delivered to the producer

Based on Law Number 8 of 1983 concerning Value Added Tax (PPN), there are four considerations for an item to be subject to PPnBM, including:

• Fairness of tax imposition between low-income consumers and high-income consumers.
• Control consumption of luxury goods
• Protection for small or traditional producers
• State revenue security

Criteria for Luxury Goods Affected by PPnBM

Sales Tax on Luxury Goods (PPnBM) is only imposed on luxury goods with the following criteria:

• Goods that are not staple goods
• Goods consumed by certain people
• Goods that are generally consumed by high-income people
• Goods consumed to indicate status

PPnBM Rates for Luxury Goods

The PPnBM rate is set at a minimum of 10% and a maximum of 200%. The difference in PPnBM rates is based on the grouping of luxury goods that are subject to PPnBM. The grouping is based on:

• The level of ability of the community groups who use the goods, in addition to being based on the use value of the goods for society in general.
• Consultation with Parliament.
• PPnBM is a tax imposed on consumption of goods classified as luxury goods in the country. Therefore, luxury goods that are exported or consumed abroad are subject to PPnBM at a rate of 0%. PPnBM which has been paid for the acquisition of luxury goods that are exported can be requested again.
• Value Added Tax Act

List of Luxury Goods Affected by PPnBM

Some of the luxury goods that are subject to PPnBM include:

• Motorized vehicles, except for ambulances, hearses, fire engines, detention vehicles, public transportation vehicles, and state interests.
• Residential groups or luxury residences, such as luxury homes, apartments, condominiums, townhouses, and the like.
• Aircraft group, except for the needs of the state or commercial air transportation

  Hot air balloon group.

• Group of luxury yachts or yachts, except for the interests of the state, public transportation, or tourism businesses.
• Weapon groups, except for state needs such as those used by the TNI/Polri.

The luxury goods mentioned above, have provisions in the category of red goods, based on tariffs. The details are as follows:

• PPnBM with the imposition of the lowest rate of 20% for luxury Taxable Goods (BKP), such as apartments or townhouses, or cluster condominiums, as well as luxury residences allocated as locations for business activities.
• PPnBM with the imposition of a moderate rate of 40% for Taxable Goods (BKP) which are classified as luxuries, such as hot air balloons, other aircraft without propulsion, and groups of firearms and ammunition.
• PPnBM with the imposition of a medium rate of 50% for Taxable Goods (BKP) which are classified as luxuries, such as airplanes and helicopters.
• PPnBM with the imposition of a medium rate of 75% for Taxable Goods (BKP) that are classified as luxuries, such as luxury cruise ships or yachts, as well as ferries or the like

This is information about the Luxury Goods Sales Tax or PPnBM. Hopefully this information can add insight to loyal VOI.ID readers.