Tax rate is the exchange rate or currency used as the basis for calculating tax transactions in Indonesia. Specifically, the taxation transaction is the settlement of Import Duty (Import), Export Duty (Export), Value Added Tax (VAT), Luxury Value Added Tax (PPnBM), and Income Tax (PPh). Primarily, the Tax Exchange is used by companies or individuals conducting international trade transactions. Which is where there are differences in the exchange rates of various countries and the value of the Tax Exchange will convert this value into rupiah currency. Individual companies or businesses use the Tax Exchange for their tax reporting purposes. And the Tax Exchange is set directly by the Ministry of Finance (KMK) every 1 week. So, the Tax Exchange will always change depending on the particular change in the value of the currency US dollar (USD) which is used as the main reference. The following is a further explanation of the types of taxation transactions previously mentioned:
Import duty
Import Duty is a levy imposed compulsorily by the Government on various types of imported goods that enter Indonesia. The import duty tariff is regulated directly by the KMK in the Indonesian Customs Tariff Book (BTKI). Generally, the flat rate for import duties is 7.5%. This import duty tariff must be multiplied by the basic value of import duty (NDPBM). The NDPMB is:
Price of Goods ( Cost) + Value of Insurance ( Insurance ) + Shipping ( Freight )
So, the calculation of import duty is:
NDPMB (adjusted to the applicable tax rate) x Import Duty
For the record, all components of the NDPBM must be in accordance with the applicable Tax Rate. In addition, companies or businesses that import goods do not arrive at the calculation of import duties alone. The imported goods must also be subject to Value Added Tax (VAT), Income Tax (Article 22 Import Tax), and PPnBM. Specifically the Luxury Goods Added Tax (PPnBM) is imposed on imported goods that fall into the category of luxury goods in accordance with the PPnBM regulations themselves.
Value Added Tax (VAT) and Value Added Tax on Luxury Goods (PPnBM)
VAT is a levy that is charged to personal or corporate taxpayers who carry out transactions of sale of taxable goods or services. While PPnBM has the same definition as VAT, it’s just that there are differences in tax objects and rates. Which is where the Tax Object of PPnBM tends to be luxury goods. This type of tax payment must be deposited and reported at the end of the month to the state by the seller as a Taxable Entrepreneur (PKP).
In general, the VAT rate charged is 10%. However, the value of the tariff may change with a minimum value of 5% and a maximum of 15% according to the terms and conditions of the applicable Government Regulation (PP). Whereas the PPnBM rate is a minimum of 10% and a maximum of 20% according to the type of goods also regulated by PP.
Basically, the formulation for calculating VAT or PPnBM is the Tax Object Sales Value (NJOP) times the applicable rate. But specifically the calculation of VAT or PPnBM in the context of importing goods is:
NDPM + Import Duty + 10%
The VAT and PPnBM tariffs for the export of goods or services are 0% or in other words are not charged at all.
Also read: Differences in Income Tax 21 and Income Tax 23
Income Tax (PPh)
Income Tax is a levy imposed on a Tax Subject in the form of an individual or entity whose income is earned. Tax subjects will calculate, deposit, and report income tax on tax objects in accordance with Law number 36 of 2008. In the framework of importing goods or services, the formulation of PPh is:
NDPM + Import Duty + 7.5%
Export Duty
Export Levy is a levy imposed by the state on export goods based on Customs Law. Usually, export duty is imposed on the types of goods in the form of natural resources that are owned and become the country’s needs. And goods that are subject to export duties usually tend to be raw or semi-finished products. In general, the formulation of calculation of export duty is:
Export Levy Tariff x Export Price per unit of goods x quantity of goods x Currency exchange rates or Tax Exchange rates
You as a businessman or owner of a company that conducts transactions between countries (import-export) of course must always be updated about the value of the Tax Exchange. Because in addition to being a basis for calculating taxation, the Tax Exchange can also be used as an indicator in making decisions on your international trade transactions. Plus, you also need to enter the tax information data that is imposed on the Tax Objects that are traded. Therefore, you must have an accounting system that can also document the value of taxes that are imposed on each of your business transactions
