Sri Mulyani Issues New Regulation on VAT Incentive

TAX REGULATION -JAKARTA. Finance Minister Sri Mulyani Indrawati has again issued a regulation on the provision of value-added tax incentives borne by the government (VAT DTP) for the purchase of houses ranging from IDR 2 billion to IDR 5 billion in 2024.

This incentive is a continuation of the VAT DTP incentive that has been running since November 2023.

Therefore, the government has issued a new policy so that this facility can be realized for the tax period January-December 2024.

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The new policy in question is the Minister of Finance Regulation (PMK) Number 7 of 2024 concerning Value Added Tax on the Delivery of Landed Houses and Flats Borne by the Government for the 2024 Fiscal Year.

The government believes that this incentive is useful for boosting Indonesia's economic growth by stimulating public purchasing power in the housing sector.

"Government support in the form of fiscal incentives in the housing sector in 2023 as regulated (...) needs to be continued in 2024," reads the consideration of the policy, Tuesday (20/2).

Referring to Article 5 paragraph (3), individuals who have received the VAT DTP incentive in 2023 and still have outstanding VAT payments in 2024, can utilize the VAT DTP incentive based on PMK 7/2024 for the remaining outstanding VAT payments.

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Meanwhile, individuals who have utilized the VAT DTP incentive for the 2023 fiscal year, cannot utilize similar incentives for the purchase of other landed houses or flats.

There are two requirements that must be met by taxpayers to obtain the VAT DTP incentive, including a maximum selling price of IDR 5 billion and the house must be new and ready to occupy.

Now, if the delivery is made from January 1 to June 30, 2024, the amount of VAT DTP given is 100% of the VAT payable from the tax base (DPP) up to IDR 2 billion with a maximum selling price of IDR 5 billion.

Then, for deliveries from July 1, 2024 to December 31, 2024, the government provides VAT DTP of 50% of the VAT payable from the DPP up to IDR 2 billion with a maximum selling price of IDR 5 billion.

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Referring to Article 11, houses that have received VAT exemption facilities in accordance with the provisions of tax legislation also cannot utilize VAT DTP based on this PMK.

"This ministerial regulation takes effect on the date of promulgation (February 13, 2024)," reads Article 14 of the policy.