Indonesia cut taxes on luxury goods, from homes to vehicles

TAX - JAKARTA. The Indonesian government has again relaxed the tax rules. After reducing the sales tax on luxury goods in luxury homes, apartments or condominiums, the government also cut the income tax on the sale of homes and apartments at prices above Rp 30 billion to 1%.

This tax deduction is in the Minister of Finance Regulation (PMK) 92/2019 which takes effect on June 19, 2019.

This new rule changes some of the provisions in the previous rules, namely PMK 253/2008 concerning certain corporate taxpayers as collectors of income tax from buyers selling luxury goods.

The new regulation also applies to condominium apartments and the like which have a selling price or transfer of more than Rp 30 billion.

Besides, in PMK 92/2019, other luxury items such as private aircraft or helicopters, cruise ships, yachts and the like are subject to a 5% income tax.

Then, four-wheeled vehicles in the form of sedans, jeeps, SUVs, MVPs, minibusses and the like, whose selling price is above Rp.2 billion or cylinder capacity of more than 3,000 cc is subject to 5% income tax.

Whereas for two-wheeled and three-wheeled vehicles subject to 5% income tax, the selling price is more than Rp. 300 million.

This change was made to encourage the growth of the property sector. "It is necessary to adjust the basic provisions for collection, criteria, nature, and magnitude of tax collection on the purchase of goods classified as very luxurious," said the Ministry of Finance in a statement quoted by Kontan.co.id, Tuesday (6/25).

In the previous regulation, PMK 253/2008, all types classified as luxury goods were subject to a 5% income tax. Very luxury goods are private aircraft, cruise ships, and the like with a selling price of more than Rp 20 billion.

Then, houses and land with a building area of ​​more than 500 square meters and apartments, condominiums and the like with a building area of ​​more than 400 square meters with a selling price of more than Rp 10 billion.

Then, four-wheeled vehicles such as sedans, jeeps, SUVs, MPVs, minibusses and the like with a selling price of more than IDR 5 billion and engine capacity of more than 3,000 cc.