VALUE ADDED TAX OF GOODS AND SERVICES

VALUE ADDED TAX OF GOODS AND SERVICES

A. Basic Law of Value Added Tax (VAT)
Legislation governing value added tax (VAT) and sales tax on luxury goods (PPnBM) is Law. 8 Year 1983 regarding VAT on Sale of Goods and Services Luxury Goods, as amended by Law no. 11 in 1994 and amended again by Act no. 18 of 2000.

B. Pros and Cons of VAT

1. Excess VAT:
a. Prevent double taxation.
b. Neutral in the local and international trade.
c. VAT on capital gains can be obtained rage back in the acquisition,
d. Judging from the great state revenue, VAT chances, the title as the money maker. Because the consumer as the bearers of the tax burden does not feel burdened by the tax making it easier for tax authorities to pick it up.

2. Weaknesses VAT:
a. Relatively high administrative costs when compared to other indirect taxes, both on the part of the tax administration or on the taxpayer.
b. Regressive impact, ie the higher the ability of consumers, the tax burden borne lightly.
c. VAT is very vulnerable from the efforts of such taxes.
d. VAT rate requires a more careful supervision by the tax administration on the level of taxpayer compliance in taxation obligations.


C. Objects of Value Added Tax

VAT levied on:
1. BKP submission within the Customs Area conducted by Taxable. Its terms are:
a. Tangible goods are handed over the BKP.
b. Intangible goods delivered an intangible BKP.
c. Carried out in the submission of Regional Customs.
d. Submission made in the ordinary course of business or work.
2. Import BKP.
3. JKP submission made within the Customs Area by Taxable. Its terms are:
a. Services are delivered JKP
b. Delivery is conducted within the Customs Area
c. Submission made in the ordinary course of business or work
4. Utilization of intangible Taxable Goods from outside the Customs Area within the Customs Area.
5. Utilization of Taxable Service from outside the Customs Area within the Customs Area.
6. Exports by Taxable BKP.
7. Activities undertaken do not build your own business or work activities by private persons or entities whose results are used alone or used in any other party.
8. Delivery of assets which, according to the original purpose of fatherly not be traded (not inventory) by PKP, along dibatar Input Tax under the provisions at the time of acquisition is creditable.



D. Taxable goods and exception

Taxable goods (BKP) is that according to the nature of intangible goods or chattels may be legal or not to move goods and intangible goods are taxed under the VAT Act. Exceptions BKP
Basically, all items are BKP, unless the Act specify otherwise. Types of goods that are not subject to VAT are set by regulation based on groups of items as follows:

a. Goods resulting from the mining, quarrying, and drilling are taken directly from the source, such as:
• Crude oil (crude oil)
• Natural gas
• Geothermal
• Sand and gravel
• The coal before it is processed into coal briquettes, and
• Iron ore, tin ore, copper ore, nickel ore and silver ore and bauxite ore.

b. Staple items that are needed by many people, such as:
• Rice
• Grain
• Corn
• Sago
• Soybeans
• both the iodized salt and non iodized.

c. Food and beverages served in hotels, restaurants, restaurants, shops, and the like include food and beverages consumed both on-site or not, excluding food and drinks are delivered by a caterer or catering business.
d. Money, gold bullion, and securities (stocks, bonds, etc.).


E. Taxable Services and exceptions

Taxable services (JKP) is any activity or service based on commitment suatau legal actions that cause suatau goods or facilities or facilities available or fatherly rights to use, including services provided fatherly produce goods to order or request, and the material provided by the customer is charged VAT taxes by law. JKP exception.
Basically all taxable services, other than those imposed by the VAT Act. Types of services that are not subject to VAT are set by regulation based on groups of services as follows:

a. Services in the field of medical health services,
b. Services in the field of social services,
c. Services in the delivery of mail with stamps,
d. Services in banking, insurance, and lease with option rights,
e. Services in the religious field,
f. Services in education,
g. Services in the field of arts and entertainment that is not taxable totonan including services in non-commercial art, such as:
Traditional art performances are held for free of charge.
h. Broadcasting services in the field of non-advertising nature, such as: radio and television broadcasting dilakuakn by government agencies or private non-advertising nature and is not financed by commercial sponsors aiming.
i. Services in the field of public transport on land and diair, such as: public transport services on land, at sea, in lakes, and rivers made by the Government or private.
j. Services in the field of labor,
k. Services in hospitality,
l. Services provided by the government in order to run the government in general, includes services performed by government agencies, such as: the provision of Building Permit, Business Licensing Trade, granting Taxpayer Identification Number, Identity Card Making.

G. Tax subject

Of provisions regulating VAT object in section 4, 16C, and 16D VAT Act 1984 can be seen that the subject of VAT can be grouped into two categories, namely:

a. Taxable
Provision which provides that subject to VAT should Taxable is article 4 of the letters a, b, c, and f as well as Article 1 of Chapter 16D Jo number 15 VAT Act 1984 section Jo Government Regulation No. 143 of 2000.

Of these chapters can be seen that:

1) What do the delivery of taxable goods and / or taxable services which may be subject to VAT is a taxable employer (section 4 letter a and letter c Jo Article 1 paragraph 15 of VAT Act 1984 Jo article 2, paragraph 1 of Government Regulation Number 143 Year 2000).

2) The export of taxable goods are liable to VAT Taxable (article 4 letter f the VAT Act 1984).

3) The surrender of assets which, according to its original purpose is not for sale Taxable Tax (VAT Act 1984 section 16D).

4) The form of cooperation which, if handed operation of taxable goods and / or taxable service is liable to VAT Taxable (article 2 paragraph 2 of Regulation No. 143 of 2000).

b. Not Taxable
VAT should not be subject Taxable, but not Taxable can be the subject of VAT as stipulated in article 4 of the letters b, d, and the letter e and the VAT Act 1984 section 16C.
Based on these chapters in mind that may be subject to VAT:

1) Any person who imports taxable goods (Article 4 letter b of the VAT 984).

2) Those who take advantage of Intangible Taxable Goods and or Taxable Services from outside the Customs territory within the Customs Area (article 4 letter d and letter e VAT Act 1984).

3) Anyone who build themselves couldn't the company or work environment (Article 16 C of VAT Act 1984).

J. Tax Rates and Tax Base

a. The tax rate

1. Value Added Tax

The current VAT rate is 10%. While the rate of VAT on exports Taxable Goods is 0%. The imposition of a tariff of 0% does not mean exemption from the imposition of VAT, but the input tax has been paid of the goods exported can be credited.
Based on considerations of economic development or enhancement needs and fatherly development funds, with government regulations can be changed VAT rate as low as 5% and as high as 15% while using the principle of a single rate.

2. Sales Tax on Luxury Goods

Tariffs on luxury goods sales (PPnBM), Government regulation, can be defined in several groupings fees are the lowest rates of 10% and the highest tariffs by 75%. The current luxury sales tax rate is 10%, 20%, 30%, 40%, 50%, and 75%.

b. Tax base
The DPP are:
1. The sale price
2. Replacement value
3. The value of exports
4. The value of imports
5. Other values ​​are determined by the decision of the Minister of Finance.

K. How to Calculate VAT dam PPnBM

How to calculate VAT are as follows:
VAT = Tax Base x Tax Rate

Example:
Employers subject to tax "A" sells to entrepreneurs cash taxable BKP "B" with a selling price of Rp. 5,000,000.00. VAT is payable: 10% x Rp = Rp 2,500,000.00 25,000,000.00. VAT amounting to Rp 2,500,000.00 is an Output Tax, levied by the employer taxable "A". As for taxable employers 'B', the VAT is input tax.

HOW TO CALCULATE PPnBM are as follows:
PPnBM = Tax Base x Tax Rate

you could download the paper in Indonesian here :

Powerpoint
Paper