Tax Consultant in Bali in explaining Definition, Tax object, and Rate of Sales Tax on Luxury Goods. This is aimed at suppressing the consumptive lifestyle of Balinese People

At by IBU Consulting 2

Bali’s Tax Consultant in explaining Definition, Tax object, and Rate of Sales Tax on Luxury Goods. This is aimed at suppressing the consumptive lifestyle of Balinese People

By: Putu Dody Brahmanthara Prayoga, S.Ak. (employee at IBU Consulting Tax Consultant Office of Ida Bagus Made Utama, S.E., S.H., M.H., BKP., CPCLE.)

In 2024, the world has undergone significant changes due to the increasing sophistication of technology, which has led to the digitalization of almost everything. The upper class who prioritize their wants over their needs, have a consumptive lifestyle and tend to buy unnecessary and excessive items. According to Mr. Sandiaga Uno, Minister of Tourism and Creative Economy, Bali is the largest foreign exchange contributor in Indonesian Tourism. Considering that Balinese entrepreneurs in tourism sector can afford luxury goods.

Tax Consultants in Bali provide services for managing taxes related to the purchase of luxury goods, also known as PPnBM (Pajak Penjualan atas Barang Mewah or Sales Tax on Luxury Goods) and it is reported using SPT Masa PPN 1111 (VAT Periodic Tax Return). The tax rates are based on Law 42 of 2009 Article 8 Paragraph (1), which states that the Sales Tax on Luxury Goods is set at a minimum of 10% (ten percent) and a maximum of 200% (two hundred percent).

The Sales Tax on Luxury Goods (STLG) of Motor Vehicle, as stipulated in the Regulation of the Minister of Finance of the Republic of Indonesia Number 42/PMK.010/2022, concerning Amendments to the Regulation of the Minister of Finance Number 141/PMK.010/2021, concerning the Determination of Types of Motor Vehicles subject to Sales Tax on Luxury Goods and Procedures for Imposition, Granting, and Administration of Exemption and Refund of Sales Tax on Luxury Goods, are divided as follows:

Rates for motor vehicles with alternating internal combustion piston engines with a cylinder capacity not exceeding 3,000 cc, including hybrid vehicles (motor vehicles with both alternating internal combustion piston engines and electric motors as motors for propulsion), are 15%, 20%, 25%, and 40%.

Rates of 15%, 20%, 25%, 40%, motor vehicles with a compression-ignition internal combustion piston engine (diesel or semi-diesel) with a cylinder capacity not exceeding 3,000 cc, including hybrid vehicles (motor vehicles with both a compression-ignition internal combustion piston engine (diesel or semi-diesel) and an electric motor for propulsion).
Rates of 40%, 50%, 60%, 70%, motor vehicles with a spark-ignition reciprocating internal combustion piston engine of a cylinder capacity exceeding 3,000 cc but not exceeding 4,000 cc, including hybrid vehicles (motor vehicles with both a spark-ignition reciprocating internal combustion piston engine and an electric motor for propulsion).
Rates of 40%, 50%, 60%, 70%, motor vehicles with a compression-ignition internal combustion piston engine (diesel or semi-diesel) of a cylinder capacity exceeding 3,000 cc but not exceeding 4,000 cc, including hybrid vehicles (motor vehicles with both a compression-ignition internal combustion piston engine (diesel or semi-diesel) and an electric motor as the propulsion engine).
A rate of 15% for vehicles powered solely by an electric motor.

The following PPnBM rates for goods other than motor vehicles, as specified in the Regulation of the Minister of Finance of the Republic of Indonesia No. 15/PMK.03/2023 on Amendments to the Regulation of the Minister of Finance No. 96/PMK.03/2021 on Determination of Types of Taxable Goods other than Motor Vehicles Subject to Sales Tax on Luxury Goods and Procedures for Exclusion of Sales Tax on Luxury Goods, are divided as follows:

20% rate for luxury residential groups such as luxury houses, apartments, condominiums, townhouses and the like with a sales price of IDR 30,000,000,000.00 (thirty billion rupiah) or more.
Rate of 40%: a). Group of hot air balloons and steerable hot air balloons, other aircraft without propulsion, b). Group of bullets for firearms and other firearms, except for government use: Bullets and parts thereof, except air rifle bullets.
Rate of 50%: a). Group of aircraft other than those subject to the 40% rate, except for government use or commercial air transportation: a.1). Helicopters, a.2). Airplanes and other aerial vehicles other than helicopters, b). Group of firearms and other weapons, except for government use: – Artillery guns – Revolvers and pistols – Firearms (other than artillery guns, revolvers and pistols) and such devices operated by firing explosives.
Rate of 75% for luxury yachts excluding for government use or public transport. Public transport: (a) yachts, excursion boats and similar vessels specially designed for the transport of persons, ferry boats of all kinds, except for governmental purposes or public transport; (b) yachts, except for governmental purposes or public transport or tourism.

Tax Consultants in Bali can provide illustrations as well as formulas that can be explained as follows: firstly, we need to find how much VAT (PPN) and STLG (PPnBM).

PPnBM = price of goods x PPnBM rate

VAT = VAT rate x (price of goods – PPnBM)

Note: VAT is 11% since April 1^st, 2022 and it can be increased on 2025.

Here is an example:

Example 1

Mr. Swastika is a businessman in the production of Balinese traditional buildings, he buys a sports car with a compression-ignition internal combustion piston engine (diesel or semi-diesel) with an engine capacity of 3,800 cc and a fuel consumption of 21 km/liter for Rp. 1,000,000,000. The car is subject to a PPnBM rate of 40%. What is the total amount that Mr. Swastika will have to pay to bring the car into Indonesia?

VAT = VAT rate x (price of goods – PPnBM)

VAT = 11% x (1,000,000,000 – (1,000,000,000 x 40%))

VAT = 11% x (1,000,000,000 – (400,000,000))

VAT = 11% X 600,000,000

VAT = 66,000,000

This means that the total price of the car to be paid by Mr. Swastika is

Total = Car price + VAT + PPnBM

Rp.1,000,000,000 + Rp.66,000,000 + Rp.400,000,000 = Rp.1,466,000,000

Example 2

Mr. Kadek is the owner of a five-star hotel in Kuta, he bought a luxury house for Rp.38,000,000,000. The purchased house is classified as a luxury good with a PPnBM rate of 20%.

What is the total amount that Mr. Kadek has to pay to buy the luxury house?

VAT = 11% x (38,000,000,000 – (38,000,000,000 x 20%))

VAT = 11% x (38,000,000,000 – 7,600,000,000)

VAT = 11% x 30,400,000,000

VAT = 3,344,000,000

This means that the total amount to be collected and paid by Mr. Kadek is

Total = Luxury house price + VAT + PPnBM

Rp.38,000,000,000 + Rp.3,344,000,000 + Rp.7,600,000 = Rp.41,351,600,000

In accordance with the explanation of the material above, such as background, items included in the Sales Tax on Luxury Goods, types of rates, and case examples and discussions, making Tax Consultants in Bali consider the existence of Sales Tax on Luxury Goods (is very important because it has the aim of suppressing the consumptive lifestyle of the community on goods which classified as luxury and to make the tax burden fair between people or communities with high income and low income. These are the things that need to be understood about the Sales Tax on Luxury Goods). Hopefully, the government’s policy on Sales Tax on Luxury Goods can make Indonesians, especially Balinese citizens, less likely to buy luxury goods that are not really needed, by using money as best as possible, such as being used to invest to have provisions for the future.