What is Ad Valorem?

Ad Valorem is a tax that is calculated based on the value of a transaction or property. As a simple example, you can find Ad Valorem on a restaurant receipt or bill . Typically, the receipt or bill includes the value added tax or VAT . VAT is calculated based on the number of transactions made.

For example, if you make a transaction of Rp. 200,000 and a VAT charged at 10%, the amount of tax generated is Rp. 20,000. The amount of tax is certainly different if the number of transactions is also different.

Example of Ad Valorem Tax

In addition to Value Added Tax (VAT) there are other types of taxes that are classified as Ad Valorem.

  • Sales Tax (VAT)
    Tax calculation based on the value of sales transactions subject to tax.
  • Land and Building Tax (PBB)
    Tax, the calculation of which is based on the value of the property subject to tax based on the Sales Value of the Tax Object (NJOP).
  • Inheritance Taxes Tax calculation based on inheritance value subject to tax.
  • Emigration Taxes Taxes imposed on emigrants or people who leave their home countries to settle into another country.

  • Stamp Duty In some countries, stamp duty is included as an ad valorem tax. This tax is calculated based on the value of documents that must use a stamp.

Leave a Comment