Article 22 Income Tax Base & Rates

ARTICLE 22 Income Tax Base & Rates are stipulated under Article 2 of the Minister of Finance Regulation Number 34/PMK.010/2017 concerning the Collection of Article 22 Income Tax in Respect of Payment for Supplies of Goods and Activities in the Import Sector or Businesses in Other Sectors.

The MoF Reg. outlines that the tax base of Article 22 Income Tax is the import value, export value, auction sale price and purchase price.

The said import value is the value in the form of money which constitutes the calculation basis of Import Duty, namely Cost Insurance and Freight (CIF) plus Import Duty and other levies imposed pursuant to statutory provisions in the import sector. The export value, on the other hand, refers to the Free on Board (FOB) value

The amount of Article 22 Income Tax is determined as follows:

1. For the collection by the Directorate General of Customs and Excise on:
   

   1. Imports of:
      

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      • certain goods listed in Appendix I which constitutes an integral part of this Ministerial Regulation and consigned goods up to a certain quantity threshold are subject to import duty at a single imposition rate pursuant to statutory provisions in the field of customs, by 10% of the import value with or without using Import Identification Number (API);
        

      • other certain goods listed in Appendix II which constitutes an integral part of this Ministerial Regulation, by 7.5% of the import value with or without using an Import Identification Number (API);
        

      • goods in the form of soybeans, wheat and wheat flour listed in Appendix III which constitutes an integral part of this Ministerial Regulation, by 0.5% of the import value using an Import Identification Number (API);
        

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      • goods other than goods referred to in letter a), letter b) and letter c) that use an Import Identification Number (API), by 2.5% of the import value;
        

      • goods referred to in letter c) and letter d) which do not use an Import Identification Number (API), by 7.5% of the import value; and/or;
        

      • uncontrolled goods, by 7.5% of the auction sale price.
        

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   2. Exports of coal mining commodities, metallic minerals and non-metallic minerals, according to the description of goods and Harmonised System (HS) codes listed in Appendix IV which constitutes an integral part of this Ministerial Regulation, by exporters, except those performed by Taxpayers bound by mining concession cooperation agreements and Contracts of Work, by 1.5% of the export value listed in the Export Declaration.
      

2. Purchases of goods referred to in Article 1 paragraph (1) subparagraph b, subparagraph c, subparagraph d and purchases of goods and/or materials for business purposes referred to in Article 1 paragraph (1) subparagraph e, by 1.5 % of the purchase price, excluding Value Added Tax.
   

3. Sales of oil fuel, gas fuel and lubricants by manufacturers or importers of oil fuel, gas fuel and lubricants, as follows:
   

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   1. oil fuel by:
      

      • 0.25% of sales, excluding Value Added Tax for sales to public refueling stations that sell fuel oil purchased from Pertamina or Pertamina’s subsidiaries;
        

      • 0.3% of sales, excluding Value Added Tax for sales to public refueling stations that sell oil fuel purchased from other than Pertamina or Pertamina’s subsidiaries;
        

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      • 0.3% of sales, excluding Value Added Tax for sales to parties other than those referred to in letter a) and letter b).
        

   2. gas fuel by 0.3% of sales, excluding Value Added Tax;
      

   3. lubricants by 0.3% of sales, excluding Value Added Tax.
      

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4. Sales of products to domestic distributors by business entities engaged in the cement industry, paper industry, steel industry, automotive industry and pharmaceutical industry business sectors:
   

   1. sales of all types of cement by 0.25%;
      

   2. sales of paper by 0.1%;
      

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   3. sales of steel by 0.3%;
      

   4. sales of all types of motor vehicles with two or more wheels, excluding heavy equipment, by 0.45% (zero point forty-five percent);
      

   5. sales of all types of medicine by 0.3% of the Value Added Tax base.
      

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5. Domestic sales of motor vehicles by Sole Agents (ATPM), Agents (APM) and general importers of motor vehicles, excluding heavy equipment, by 0.45% of the Value Added Tax base.
   

6. Purchases of materials in the form of forestry, plantation, agricultural, livestock and fishery products that have not undergone the manufacturing industry process by industrial business entities or exporters of 0.25% of the purchase price, excluding Value Added Tax.
   

7. Purchases of coal, metallic minerals and non-metallic minerals, from entities or individuals holding mining business permits by industries or business entities by 1.5% of the purchase price, excluding Value Added Tax.
   

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8. Sales of gold bullion by business entities performing the sales, by 0.45% of the selling price of the gold bullion.
   

The collection rate applied to Taxpayers that do not have a Taxpayer Identification Number amounts to 100% higher than the rate applied to Taxpayers that can show a Taxpayer Identification Number.

Article 22 Income Tax Rate and Tax Base Scheme:

Part 4 will outline procedures for the collection of Article 22 Income Tax. The explanation concerning taxable objects and non-taxable objects has been discussed in part 2. (kaw)