Government Borne VAT Incentive Regulation for Houses, Download Here!

JAKARTA, DDTCNews - The Ministry of Finance has officially extended the validity period of the government-borne (Ditanggung Pemerintah/DTP in Indonesian) VAT incentive by 100% on supplies of landed houses and flat units.  The 100% government-borne VAT incentive was initially valid only until 30 June 2024. 

Formerly, houses and flats supplied from July 2024 to 31 December 2024 were eligible to a 50% government-borne VAT incentive. Through the Minister of Finance Regulation (MoF Reg.) 61/2024, however, the government has extended the validity period of the 100% government-borne VAT for the period between September 2024 to December 2024. 

“Government-borne VAT is granted for the September 2024 Taxable Period to the December 2024 Taxable Period.," reads Article 7 paragraph (2) of MoF Reg.  7/2024, quoted on Friday (20/9/2024).

The extension of the validity period of 100% government-borne VAT is intended to expedite the increase in economic growth. The economic growth is accelerated by providing stimulus to people’s purchasing power in the housing sector through the granting of the government-borne VAT incentive. 

Similar to the previous provision, government-borne VAT is granted at 100% of VAT payable on a fraction of the tax base of up to IDR 2 billion.  The government-borne VAT incentive, however, is only given to supplies of eligible landed houses and flats. 

One of the requirements is that the selling price of the landed houses or flat units amount to a maximum of IDR 5 billion MoF Reg. 61/2024 took effect on the date of promulgation, i.e., as of 19 September 2024.

In general, MoF Reg. 61/2024 consists of 14 articles. The following are the details.

• Article 1

Contains the definitions of a number of terms included in this regulation.

• Article 2

This article elucidates that government-borne VAT is granted to VAT payable on supplies of landed houses and flats.

• Article 3

This article elucidates that the government-borne VAT incentive is granted for supplies of houses or flats occurring from 1 September 2024 to 31 December 2024.

• Article 4

This article outlines the details of the requirements for houses or flats eligible for the government-borne VAT facility.

• Article 5

This article elucidates that government-borne VAT is given to every one individual on the acquisition of one landed house or one flat.

• Article 6

This article elucidates the criteria for individuals that may utilise the government-borne VAT facility.

• Article 7

This article elucidates that the government-borne VAT is granted at 100% on VAT payable on a fraction of the tax base of up to. This article also reiterates that government-borne VAT is given for the September 2024 to December 2024 taxable periods.

• Article 8

This article outlines the obligations of taxable persons (Pengusaha Kena Pajak/PKP in Indonesian) supplying landed houses or flats with the government-borne VAT facility.

• Article 9

This article describes the conditions under which the government-borne VAT incentive is not provided.

• Article 10

This article stipulates the authority of the head of the Tax Office (Kantor Pelayanan Pajak/KPP in Indonesian) to re-collect VAT payable under certain conditions.

• Article 11

This article elucidates that landed houses or flat units that have received the VAT exemption facility pursuant to statutory provisions in the field of taxation cannot utilise the government-borne VAT incentive pursuant to MoF Reg. 61/2024.

• Article 12

This article outlines the implementation and accountability of government-borne VAT for supplies of landed houses or flat units pursuant to statutory provisions.

• Article 13

This article stipulates the responsibility of the Ministry of Public Works and Public Housing and/or the People’s Housing Savings Management Agency (Badan Pengelola Tabungan Perumahan Rakyat/BP Tapera in Indonesian) to submit data on landed houses and flats to the DGT.

• Article 14

This article stipulates the entry of force date of MoF Reg. 61/2024, i.e., 19 September 2024.

To read MoF Reg. 61/2024 in full, feel free to download the regulation through Perpajakan DTC.