ADMINISTRATIVE SANCTIONS IN THE FORM OF FINE IN CONNECTION WITH THE MAKING OF TAX INVOICES IN IMPLEMENTATION

INSTRUCTIONS FOR MAKING AND CORRECTING OR REPLACEMENT OF TAX INVOICES AND AFFIRMATION OF THE IMPOSITION OF ADMINISTRATIVE SANCTIONS IN THE FORM OF FINE IN CONNECTION WITH THE MAKING OF TAX INVOICES IN IMPLEMENTATION OF THE REGULATION OF THE MINISTER OF FINANCE NUMBER 6/ PMK.0 NAJAKAIK. 2022 BUDGET
Dear
1.
Echelon II Officials at the Head Office of the Directorate General of Taxes;
2.
Head of Regional Office;
3.
Head of Tax Service Office;
4.
Head of Technical Service Unit; and
5.
Head of Service, Counseling, and Tax Consultation Office,
within the Directorate General of Taxes.
A.

General

In connection with the promulgation of Regulation of the Minister of Finance Number 6/PMK.010/22 concerning Value Added Tax on the Delivery of Landed Houses and Flats Borne by the Government for the Fiscal Year 2022 (Regulation of the Minister of Finance Number 6/PMK.010/222), adjustments have been made to the arrangement concerning the preparation of tax invoices for the delivery of landed houses and flats utilizing the Government-borne Value Added Tax incentive. Minister of Finance Regulation Number 6/PMK.010/22regulates the obligation of the seller’s Taxable Entrepreneur to issue 2 (two) tax invoices, namely tax invoices with transaction codes 07 (zero seven) and 01 (zero one) for the delivery of landed houses and flats receiving incentives for Value Added Tax borne by the Government in 2022 budget.
The provisions for making 2 (two) tax invoices also apply to the use of Government-borne Value Added Tax incentives based on the Minister of Finance Regulation Number 6/PMK.010/22 for payments in March 2021 until the entry into force of the Minister of Finance Regulation Number 6/PMK. 010/2022. However, Minister of Finance Regulation Number 6/PMK.010/22 does not regulate the mechanism for issuing 2 (two) tax invoices for payments in March 2021 until the Minister of Finance Regulation Number 6/PMK.010/22 comes into force which will take advantage of tax incentives. Value Added is borne by the Government based on the Regulation of the Minister of Finance Number 6/PMK.010/22.
In addition, with the enactment of the Regulation of the Director-General of Taxes Number PER-03/PJ/2022 concerning Tax Invoices which stipulates that tax invoices must be uploaded to the Directorate General of Taxes using the e-Faktur application and obtaining approval from the Directorate General of Taxes, no later than the 15th day of the following month after the date of making the e-Faktur, it is necessary to explain the making of a tax invoice for payments in March 2021 until the entry into force of Regulation of the Minister of Finance Number 6/PMK.010/222.
In connection with these matters, in the context of utilizing the Value Added Tax incentives borne by the Government based on the Regulation of the Minister of Finance Number 6/PMK.010/22 for payments in March 2021 until the enactment of the Regulation of the Minister of Finance Number 6/PMK.010/2222, it is necessary to issue a Circular Letter of the Director-General of Taxes which provides instructions for the preparation and correction or replacement of tax invoices as well as confirmation of the imposition of administrative sanctions in the form of fines in connection with the preparation of tax invoices.
B.

Purpose and objectives

1.
Meaning
This Circular of the Director-General is intended to provide instructions for the preparation and correction or replacement of tax invoices as well as confirmation of the imposition of administrative sanctions in the form of fines in connection with the preparation of tax invoices in the implementation of the Regulation of the Minister of Finance Number 6/PMK.010/222.
2.
Destination
This Circular of the Director-General aims to create uniformity in the preparation and correction or replacement of tax invoices as well as the imposition of administrative sanctions in the form of fines in connection with the making of tax invoices in the context of implementing the Regulation of the Minister of Finance Number 6/PMK.010/222.
C.

Scope

The scope of this Circular of the Director-General includes:
1.
definition;
2.
general provisions for making tax invoices in the use of Value Added Tax incentives borne by the Government based on the Regulation of the Minister of Finance Number 6/PMK.010/22;
3.
when the Value Added Tax is payable and when the tax invoice is made;
4.
utilization of the Value Added Tax incentives borne by the Government based on the Regulation of the Minister of Finance Number 6/PMK.010/22 for payments in March 2021 until the enactment of the Regulation of the Minister of Finance Number 6/PMK.010/222;
5.
making and correcting or replacing tax invoices in the use of Value Added Tax incentives borne by the Government based on the Regulation of the Minister of Finance Number 6/PMK.010/22 for payments in March 2021 until the enactment of Regulation of the Minister of Finance Number 6/PMK.010/222;
6.
reporting of tax invoices for payments in March 2021 until the enactment of the Regulation of the Minister of Finance Number 6/PMK.010/22 which utilizes the Government-borne Value Added Tax incentive based on the Regulation of the Minister of Finance Number 6/PMK.010/22;
7.
the obligation of the seller’s Taxable Entrepreneur for the delivery of the landed house or apartment unit which originally utilized the Government-borne Value Added Tax incentive, but the delivery did not meet the requirements for the use of the Government-borne Value Added Tax incentive based on the Regulation of the Minister of Finance Number 6/PMK.010/22; and
8.
treatment of the imposition of administrative sanctions in the form of fines in connection with the making of tax invoices in the context of implementing the Regulation of the Minister of Finance Number 6/PMK.010/222.
D.

Base

1.
Law Number 6 of 1983 concerning General Provisions and Tax Procedures as amended several times, most recently by Law Number 7 of 2021 concerning Harmonization of Tax Regulations;
2.
Law Number 8 of 1983 concerning Value Added Tax of Goods and Services and Sales Tax on Luxury Goods as amended several times, most recently by Law Number 7 of 2021 concerning Harmonization of Tax Regulations;
3.
Government Regulation Number 1 of 2012 concerning the Implementation of Law Number 8 of 1983 concerning Value Added Tax of Goods and Services and Sales Tax on Luxury Goods as amended several times, most recently by Law Number 42 of 2009 concerning the Third Amendment to Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods, as amended by Government Regulation Number 9 of 2021 concerning Tax Treatment to Support Business Ease;
4.
Regulation of the Minister of Finance Number 8/PMK.03/2013 concerning Procedures for Reduction or Elimination of Administrative Sanctions and Reduction or Cancellation of Tax Assessment Letters or Tax Collection Letters;
5.
Regulation of the Minister of Finance Number 18/PMK.03/2021 concerning the Implementation of Law Number 11 of 2020 concerning Job Creation in the Field of Income Tax, Value Added Tax, and Sales Tax on Luxury Goods, as well as General Provisions and Tax Procedures;
6.
Regulation of the Minister of Finance Number 6/PMK.010/22 concerning Value Added Tax on the Delivery of Treaded Houses and Flats Borne by the Government for Fiscal Year 2022;
7.
Regulation of the Director-General of Taxes Number PER-03/PJ/2022 concerning Tax Invoices.
E.

Theory

1.
Definition
a.
The Law on General Provisions and Tax Procedures is Law Number 6 of 1983 concerning General Provisions and Tax Procedures and its amendments.
b.
Value Added Tax Law is Law Number 8 of 1983 concerning Value Added Tax of Goods and Services and Sales Tax on Luxury Goods and its amendments.
c.
Value Added Tax is Value Added Tax as referred to in the Value Added Tax Law.
d.
Taxable Entrepreneurs are entrepreneurs who deliver Taxable Goods and/or delivery of Taxable Services which are subject to tax based on the Law on Value Added Tax.
e.
Tax Invoice as proof of tax levy made by a Taxable Entrepreneur who delivers Taxable Goods or delivery of Taxable Services.
f.
Selling Price is value in the form of money, including all fees, requested or should be requested by the seller due to the delivery of Taxable Goods, excluding Value Added Tax collected under the Value Added Tax Law and discounted prices included in the Tax Invoice.
g.
Tax Imposition Base is the amount of Selling Price, Replacement, Import Value, Export Value, or other value used as the basis for calculating the tax payable.
h.
The tax Period is the period that becomes the basis for the taxpayer to calculate, deposit, and report the tax payable within a certain period by the provisions of the legislation in the field of taxation.
2.
General Provisions for Making Tax Invoices in Utilizing Government-borne Value Added Tax Incentives Based on the Regulation of the Minister of Finance Number 6/PMK.010/22
a.
The Tax Invoice is filled out completely and correctly by the provisions of the legislation in the field of taxation, including the following information or information:
1)
buyer’s identity is filled with:
a)
buyer’s name; and
b)
taxpayer identification number or population identification number;
2)
the name of the item is completed with the house identity code;
3)
the reference is filled in or the stamp “VAT is borne by the PMK EXECUTION GOVERNMENT NUMBER 6/PMK.010/222”.
b.
Upon receipt of payment or delivery of the landed house or apartment unit, the selling Taxable Entrepreneur is obliged to issue 2 (two) Tax Invoices with the following provisions:
1)
For Value Added Tax incentives borne by the Government in the amount of 50% (fifty percent) of the Value Added Tax payable, the Tax Invoice made consists of:
a)
Tax Invoice with transaction code 01 (zero one) for the 50% (fifty percent) portion of the Selling Price that does not receive the Government-borne Value Added Tax incentive; and
b)
Tax Invoice with transaction code 07 (zero seven) for 50% share. (fifty percent) of the Selling Price for which the Value Added Tax incentive is borne by the Government.
2)
For the Government borne Value Added Tax incentive of 25% (twenty-five percent) of the Value Added Tax payable, the Tax Invoice made consists of:
a)
Tax Invoice with transaction code 01 (zero one) for the 75% (seventy-five percent) portion of the Selling Price that does not receive the Government borne Value Added Tax incentive; and
b)
Tax Invoice with transaction code 07 (zero seven) for the 25% (twenty-five percent) portion of the Selling Price that receives the Government borne Value Added Tax incentive.
3.
When Value Added Tax is payable and When Tax Invoice is made
a.
When the Value Added Tax is payable by the provisions of Article 11 of the Value Added Tax Law, namely:
1)
at the time of handing over the right to use or control the landed house or apartment unit, legally or actually, to the buyer; or
2)
at the time of receipt of payment by the seller, if the payment is received before the delivery of the landed house or apartment unit as referred to in number 1).
b.
Tax Invoice must be made at the time of delivery of the landed house or apartment unit as referred to in letter a number 1) or at the time of receipt of payment as referred to in letter a number 2).
4.
Utilization of Government-borne Value Added Tax Incentives Based on Regulation of the Minister of Finance Number 6/PMK.010/22 for Payments in March 2021 until the Effectiveness of Regulation of the Minister of Finance Number 6/PMK.010/222
The delivery of a landed house or apartment unit by the seller’s Taxable Entrepreneur whose payment is made in March 2021 until the entry into force of the Minister of Finance Regulation Number 6/PMK.010/222, may be given an incentive for Value Added Tax borne by the Government based on the Regulation of the Minister of Finance Number 6 /PMK.010/22, as long as:
a.
landed house or apartment housing unit must meet the following requirements:
1)
The highest selling price is Rp. 5,000,000,000.00 (five billion rupiahs);
2)
is a new landed house and a new apartment housing unit that is submitted in a ready-to-occupy condition;
3)
have obtained a house identity code; and
4)
the first time it is submitted by the selling Taxable Entrepreneur who organizes the construction of a landed house or apartment dwelling unit and it has never been transferred;
b.
the landed house or apartment unit must have been registered by the seller’s Taxable Entrepreneur on the application at the ministry that administers government affairs in the housing and settlement area and/or the Public Housing Savings Management Agency no later than March 31, 2022;
c.
advance payment or the first installment to the seller’s Taxable Entrepreneur shall be made no later than January 1, 2021;
d.
there has not been a real transfer of rights to use or control a landed house ready for habitation or an apartment unit ready for habitation until December 31, 2021, as evidenced by the fact that an official report of handover has not been made;
e.
the actual transfer of rights to use or control a landed house ready for habitation or apartment unit ready for habitation is carried out during the Tax Period of January 2022 until the Tax Period of September 2022, as evidenced by the minutes of handover from January 1, 2022, to September 30, 2022; and
f.
the minutes of the handover as referred to in letter e must be registered in the application at the ministry that administers government affairs in the housing and settlement areas and/or the People’s Housing Savings Management Agency no later than the end of the following month after the month the handover takes place.
5.
Preparation and Correction or Replacement of Tax Invoices in the Utilization of Government-borne Value Added Tax Incentives Based on Regulation of the Minister of Finance Number 6/PMK.010/22 for Payments in March 2021 until the Effectiveness of Regulation of the Minister of Finance Number 6/PMK.010/222
a.
For payments in 2021 that have utilized the Value Added Tax incentive borne by the Government in the amount of 50% (fifty percent) of the Value Added Tax payable based on the Regulation of the Minister of Finance Number 21/PMK.010/2021 concerning Value Added Tax on the Delivery of Landed Houses and Units Occupancy of Flats Borne by the Government for the Fiscal Year 2021 (PMK-21/2021) or Regulation of the Minister of Finance Number 103/PMK.010/2021 concerning Value Added Tax on the Delivery of Treaded Houses and Residential Units of Flats Borne by the Government for the Fiscal Year 2021 (PMK- 103/2021), the following provisions apply:
1)
The seller’s Taxable Entrepreneur has issued 2 (two) Tax Invoices for each payment receipt in 2021, with transaction codes 01 (zero one) and 07 (zero seven). The “Selling Price” column for each Tax Invoice is to be filled in at 50% (fifty percent) of the value of money that should be paid in 2021 before deducting the discounted price.
2)
To be able to take advantage of the Government-borne Value Added Tax incentive based on the Regulation of the Minister of Finance Number 6/PMK.010/22, the seller’s Taxable Entrepreneur shall correct or replace the Tax Invoice with the transaction code:
a)
01 (zero one) for the part that does not get the Value Added Tax incentive borne by the Government by changing the fields in the “Selling Price” column which was originally 50% (fifty percent) of the Selling Price to 75% (seventy-five percent) of the Selling Price; and
b)
07 (zero seven) for the part that gets the Government-borne Value Added Tax incentive by:
(1)
replace the fields in the “Selling Price” column which was originally 50% (fifty percent) of the Selling Price to 25% (twenty-five percent) of the Selling Price; and
(2)
change the statement to “VAT is borne by the PMK EXECUTION GOVERNMENT NUMBER 6/PMK.010/222”,
during the Tax Period when the actual right to use or control the landed house is carried out or the apartment unit is ready for habitation.
b.
For payments in 2021 that have utilized the Government-borne Value Added Tax incentive of 100% (one hundred percent) of the Value Added Tax payable based on PMK-21/2021 or PMK-103/2021, the following provisions apply:
1)
The seller’s Taxable Entrepreneur has issued a Tax Invoice for every payment received in 2021, with transaction code 07 (zero seven). The “Selling Price” column on the Tax Invoice is filled in at 100% (one hundred percent) of the value of money that should be paid in 2021 before deducting the discounted price.
2)
To be able to take advantage of the Government-borne Value Added Tax incentive based on the Regulation of the Minister of Finance Number 6/PMK.010/22, the seller’s Taxable Entrepreneur:
a)
correct or replace the Tax Invoice with transaction code 07 (zero seven) as referred to in number 1) with:
(1)
change transaction code 07 (zero seven) to transaction code 01 (zero one); and
(2)
replace the fields in the “Selling Price” column which was originally 100% (one hundred percent) of the Selling Price to 50% (fifty percent) of the Selling Price;
and
b)
make a Tax Invoice with transaction code 07 (zero seven) for each part of the payment that gets the Government-borne Value Added Tax incentive, by:
(1)
fill in the column “Selling Price” in the amount of 50% (fifty percent) of the portion of the Selling Price that receives an incentive for Value Added Tax borne by the Government based on the Regulation of the Minister of Finance Number 6/PMK.010/22;
(2)
include the house identity code in the item name column; and
(3)
provide information on “VAT is borne by the PMK EXECUTION GOVERNMENT NUMBER 6/PMK.010/222”,
during the Tax Period when the actual right to use or control the landed house is carried out or the apartment unit is ready for habitation.
c.
For payments in March 2021 until the entry into force of Minister of Finance Regulation Number 6/PMK.010/22 which initially did not take advantage of Government-borne Value Added Tax incentives, but will take advantage of Government-borne Value Added Tax incentives based on Minister of Finance Regulation Number 6/PMK. 010/2022, the following conditions apply:
1)
The seller’s Taxable Entrepreneur has issued a Tax Invoice for each payment receipt, with the transaction code 01 (zero one). The “Selling Price” column on the Tax Invoice is filled in at 100% (one hundred percent) of the value of money that should be paid before deducting the discounted price.
2)
To be able to take advantage of the Government-borne Value Added Tax incentive based on the Regulation of the Minister of Finance Number 6/PMK.010/22, the seller’s Taxable Entrepreneur:
a)
correct or replace the Tax Invoice as referred to in number 1) with:
(1)
replace the Selling Price to be by the percentage of the selling price that does not get the Value Added Tax incentive borne by the Government based on the Regulation of the Minister of Finance Number 6/PMK.010/22: and
(2)
include the house identity code in the item name column,
at the time of actual surrender of the right to use or control the landed house ready for habitation or apartment unit ready for habitation; and
b)
make a Tax Invoice with transaction code 07 (zero seven) for each part of the payment that gets the Government-borne Value Added Tax incentive, by:
(1)
fill in the column “Selling Price” by the percentage of the portion of the Selling Price that gets the Government-borne Value Added Tax incentive based on the Regulation of the Minister of Finance Number 6/PMK.010/22;
(2)
include the house identity code in the item name column; and
(3)
provide information on “VAT is borne by the PMK EXECUTION GOVERNMENT NUMBER 6/PMK.010/222”,
for the Tax Period when the actual right to use or control the landed house is made or the apartment unit is ready for habitation is made.
d.
Examples of making and correcting or replacing Tax Invoices for payments in March 2021 until the entry into force of Minister of Finance Regulation Number 6/PMK.010/22 in the context of utilizing Government-borne Value Added Tax incentives based on Minister of Finance Regulation Number 6/PMK.010/222 are listed in Attachment letter A which is an integral part of this Circular of the Director-General.
6.
Reporting of Tax Invoices on Payments in March 2021 until the Effectiveness of Regulation of the Minister of Finance Number 6/PMK.010/22 Using Value Added Tax Incentives Borne by the Government Based on Regulation of the Minister of Finance Number 6/PMK.010/22
a.
The selling Taxable Entrepreneur is obliged to report the prepared Tax Invoice and/or substitute Tax Invoice as referred to in number 5, in the notification letter for the period of Value Added Tax by the provisions of the legislation in the field of taxation.
b.
The notification letter for the period of Value Added Tax as referred to in letter a is submitted no later than October 31, 2022.
c.
In the case of a seller’s Taxable Entrepreneur:
1)
does not report the Tax Invoice in the notification letter for the period of Value Added Tax as referred to in letter a; or
2)
report the Tax Invoice in the notification letter for the period of Value Added Tax, but does not submit the notification letter for the period of Value Added Tax as referred to in letter b,
The selling Taxable Entrepreneur is deemed not to have submitted a report on the realization of the Value Added Tax borne by the Government as referred to in Article 9 paragraph (1) letter b of the Regulation of the Minister of Finance Number 6/PMK.010/222. Thus, upon delivery of a landed house or apartment unit, it is not possible to take advantage of the Government-borne Value Added Tax incentive based on the Regulation of the Minister of Finance Number 6/PMK.01/2022.
d.
The examples of Tax Invoice reporting as referred to in letter c and letter d, are listed in Appendix letter C which is an integral part of this Circular Letter of the Director-General.
7.
Obligations of the Seller’s Taxable Entrepreneur for the Delivery of Landed Houses or Flats that Originally Utilized Government-borne Value Added Tax Incentives, but the Delivery Did not Meet the Requirements for Utilization of Government-borne Value Added Tax Incentives Based on Regulation of the Minister of Finance Number 6/PMK.010/22
a.
If the seller’s Taxable Entrepreneur has issued a Tax Invoice in the context of utilizing the Value Added Tax borne by the Government based on the Regulation of the Minister of Finance Number 6/PMK.010/222, however:
1)
the new landed house or apartment unit does not receive a house identity code;
2)
the actual transfer of rights to use or control a landed house ready for habitation or apartment unit ready for habitation is not carried out until September 30, 2022; and/or
3)
the minutes of the handover is not registered in the application at the ministry that administers government affairs in the housing and settlement areas and/or the Public Housing Savings Management Agency no later than the end of the following month after the month the handover takes place,
then the delivery of the landed house or apartment unit does not meet the requirements to take advantage of the Government-borne Value Added Tax incentive based on the Regulation of the Minister of Finance Number 6/PMK.010/22.
b.
Upon delivery of a landed house or apartment unit that does not meet the requirements to take advantage of the Government-borne Value Added Tax incentive as referred to in letter a, the selling Taxable Entrepreneur is obliged to correct or replace the Tax Invoice with transaction code 07 (zero seven) by replacing transaction code 07 ( zero seven) becomes transaction code 01 (zero one).
c.
If the correction or replacement of the Tax Invoice as referred to in letter b causes the Value Added Tax payable in the notification letter for the period of Value Added Tax to be greater, the selling Taxable Entrepreneur shall be subject to an administrative sanction in the form of interest by the provisions of the legislation in the field of taxation.
d.
If the selling Taxable Entrepreneur does not correct or replace the Tax Invoice as referred to in letter b, the Head of the Tax Service Office on behalf of the Director-General of Taxes may collect the Value Added Tax payable to the selling Taxable Entrepreneur by the provisions of the legislation in the field of taxation.
e.
An example of the correction or replacement of a Tax Invoice upon the delivery of a landed house or apartment unit that does not meet the requirements as referred to in letter a is contained in Attachment letter B which is an integral part of this Circular Letter of the Director-General.
8.
Treatment of the Imposition of Administrative Sanctions in the Form of Fines in connection with the Making of Tax Invoices in the Framework of Implementing the Regulation of the Minister of Finance Number 6/PMK.010/22
a.
If the Tax Invoice with transaction code 07 (zero seven) as referred to in number 5 letter b number 2) letter b) and letter c number 2) letter b) is made not by the time of making the Tax Invoice as referred to in number 3, the Entrepreneur shall be subject to Seller tax is subject to administrative sanctions in the form of fines as referred to in Article 14 paragraph (4) of the Law on General Provisions and Tax Procedures.
b.
For the administrative sanction in the form of a fine as referred to in letter a, the Head of the Regional Office on behalf of the Director-General of Taxes due to his position or at the request of the Taxpayer waives the administrative sanction by the provisions of the legislation in the field of taxation.
c.
Elimination of sanctions as referred to in letter b, is carried out as long as the Tax Invoice has been made correctly, completely, and clearly at the time of receipt of payment in March 2021 until the entry into force of Regulation of the Minister of Finance Number 6/PMK.010/222.
F.

Closing

With the stipulation of this Circular of the Director-General, the preparation of Tax Invoices and the correction or replacement of Tax Invoices, as well as the imposition of administrative sanctions in the form of fines in connection with the making of Tax Invoices in the context of implementing the Regulation of the Minister of Finance Number 6/PMK.010/222, are guided by this Circular of the Director-General. . Furthermore, it is requested that all related units within the Directorate General of Taxes carry out supervision about the implementation of this Circular of the Director-General in their respective work areas.
Thus, this Circular Letter of the Director-General is submitted to be known and implemented properly.
Set in Jakarta
on May 23, 2022
DIRECTOR-GENERAL,
ted.
SURYO UTOMO

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