TAX ALERT 04.2022 – PMK 65 YEAR 2022 – VALUE ADDED TAX ON THE DELIVERY OF USED MOTORIZED VEHICLES

On March 30, 2022, the Government issued Regulation of the Minister of Finance No. 65/PMK.03/2022 (PMK 65/2022) regarding Value Added Tax on The Delivery of Used Motorized Vehicles.
The main points regulated in PMK 65/2022 are the followings:

VAT object
Used Motorized Vehicles → do not include delivery of Taxable Goods in the form of assets that based on its original purpose are not for sale as regulated in Article 16D of the VAT Law.
XX
VAT Subject
Taxable Entrepreneurs engage in certain business activities who delivering used motorized vehicles.
xx
Tax Base
Based on a certain amount as follows:
- Effective tax rate = 1.1% x Selling Price → Effective on April 1, 2022.
- Effective tax rate = 1.2% x Selling Price → Effective no later than January 1, 2025.
Tax Credit

- Input Taxrelated to the delivery of used motor vehicles by Taxable Enterprises engaging in certain business activities who deliver used motor vehicles can not be credited.
- Taxable enterprises engaged in the delivery of used motorized vehicles in a tax period conducting:
  - deliveries subject to VAT and the Input Tax related to the deliveries can be credited; and
  - deliveries subject to VAT and the Input Tax related to the deliveries can not be credited and/or deliveries are not subject to VAT,

the amount of Input Tax that can be credited for deliveries subject to VAT shall be calculated using guidelines in Article 9 Paragraph (5) and Paragraph (6) of the VAT Law.

This regulation shall come into force on April 1, 2022.

Attachments :
SALAKI – 042022 – PMK No. 65_PMPK.03_2022