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New Regulations on Import Taxes | 1
New Regulations on Import Taxes
Tax AlertOctober 2018
A. Changes to Article 22 withholding tax for certain imported goods
The Minister of Finance (MoF) has issued MoF Regulation No. 110/PMK.010/2018 (PMK110), effective 13 September 2018, which increases the rate of Article 22 income tax on the importation of certain goods or delivery of goods for other business activities.
The changes come in the context of a current account deficit and weakening Rupiah exchange rate against the US Dollar. Article 22 income tax is a non-final (pre-payment) against the annual corporate income tax position of the importer. As such, there would be a cash-flow impact but perhaps not an overall increased burden, subject to the ability to recover tax refunds where required.
PMK110 amends MoF Regulation No. 34/PMK.010/2017 (PMK34).
Under PMK34, Directorate General of Customs and Excise (DGCE) is responsible to collect Article 22 income tax on the import or export of certain goods as follows:
Category Import of:Art. 22 income tax rate
1
Certain consumer goods, which among others are perfume, clothing, carpet, garment, shoes, statues, ceramic goods, glass products, gold and silver products; and consigned goods up to certain amount, which are subject to single import duty tariff according to the Customs Law, whether or not imported by using Importer Identification Number (Angka Pengenal Impor - API).
10.0%
2
Other certain consumer goods, which among others are electric households, telephone equipment, monitor and projectors, motor cars and other motor vehicles, whether or not imported by using API.
7.5%
3Soybeans, wheat and wheat flour, if imported by using API.
0.5%
2 | New Regulations on Import Taxes
Category Import of:Art. 22 income tax rate
4Goods other than goods stated under category 1, 2 and 3, if imported by using API. 2.5%
5Goods as stated in category 3 and 4, if imported without using API.
7.5%
6 Un-claimed goods that are auctioned. 7.5%
Export of:
7Certain coal, metal minerals and non-metal minerals mining commodities.
1.5%
PMK110 changes the list of imported consumer goods in categories 1 and 2, moving some category 2 (7.5%) goods into category 1 (10%) and also adding goods previously in category 4 (2.5%) into either category 1 or 2. Other provisions governed under PMK34 are still applicable.
Some further detail on the changes on Article 22 income tax rates is provided in Appendix 1. However, please note that the table in Appendix 1 only indicates the Harmonized System (HS) group of the imported goods by using the first 4 (four) digits HS code of the product category. Not necessarily all items under the said HS group is included in either category 1 or 2. For the exact imported goods subject to Article 22 income tax under category 1 or 2, please refer to the attachments of PMK110 describing the exact 8 (eight) digits HS code of the imported goods.
B. Changes on the import provisions for consigned goods
On 6 September 2018 the Minister of Finance has issued MoF Regulation No. 112/PMK.04/2018 (PMK112), which will be effective on 10 October 2018. PMK112 is an amendment of MoF Regulation No. 182/PMK.04/2016 (PMK182) that governs the import provisions on consigned goods. Consigned goods are defined as goods that are sent through a postal organizer in accordance with postal laws and regulations.
It is stated that the rationale for the new regulation is to protect the national interest, given the increase in volume of imported goods through consigned goods mechanisms and to push domestic industrial growth.
Previously under PMK182, imported consigned goods for consumption with a maximum customs value of Free-on-board (FOB) USD100.00 for each consignee per shipment could be exempt from import duty. PMK112 decreases the maximum customs value for the exemption to FOB USD75.00 for each consignee per day; or more than one shipment per day provided that total customs value of all shipments does not exceed FOB USD75.00. If the value exceeds the threshold, the shipment is subject to import duty and import taxes on the whole customs value.
Where the threshold is exceeded, the customs and excise officer handling the consigned goods and/ or computer service system will officially assess the import duty tariff and the customs value. For the imported consigned goods that have been officially assessed by the customs and excise officer, the assessment covers:
a. Import duty tariff is assessed at the rate of 7.5%; and
b. Customs value is assessed based on all of consigned goods’ customs value in accordance with the Customs Law and regulations on customs value assessment.
However, official assessment on import duty tariff at the rate of 7.5% as stated in (a) above is not applicable for imported consigned goods in the form of books (previously under PMK182 only science books are excluded from the official assessment).
PMK112 also changes some definitions and limits concerning importation of tobacco and alcohol products.
Other provisions governed by PMK182 are still applicable.
New Regulations on Import Taxes | 3
Appendix 1
The table below shows the changes from PMK34 to PMK110 on the imported goods subject to Article 22 income tax under categories 1 and 2 based on the first four digits of the HS code.
Where the product categories are not check-marked under PMK34, it means that group of products have moved from category 4 (2.5%) as additional group of products that are now subject to either category 1 (10%) or category 2 (7.5%) under PMK110. Where the group of products are check-marked under both categories 1 and 2, it means some of the goods are subject to Article 22 income tax at the rate of 10% and some are subject to Article 22 income tax at the rate of 7.5%.
HS Group Goods descriptions
Old PMK34
New PMK110
Old PMK34
New PMK110
Category 1 @10% Category 2 @7.5%
0901Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee in any proportion.
√
0902 Tea, whether or not flavoured. √
1601Sausages and similar products, of meat, meat offal or blood; food preparations based on these products.
√
1602 Other prepared or preserved meat, meat offal or blood. √
1604Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs.
√
1605Crustaceans, molluscs and other aquatic invertebrates, prepared or preserved.
√
1704 Sugar confectionery (including white chocolate), not containing cocoa. √
1806 Chocolate and other food preparations containing cocoa. √
1902Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as spaghetti, macaroni, noodles, lasagne, gnocchi, ravioli, cannelloni; couscous, whether or not prepared.
√
1904
Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn flakes); cereals (other than maize (corn)), in grain form or in the form of flakes or other worked grains (except flour, groats and meal), pre-cooked or otherwise prepared, not elsewhere specified or included.
√
1905Bread, pastry, cakes, biscuits and other bakers' wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products.
√
2006Vegetables, fruit, nuts, fruit-peel and other parts of plants, preserved by sugar (drained, glace or crystallised).
√
2101
Extracts, essences and concentrates, of coffee, tea or mate, and preparations with a basis of these products or with a basis of coffee, tea or mate; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof.
√
2103Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard.
√
2105 Ice cream and other edible ice, whether or not containing cocoa. √
2106 Food preparations not elsewhere specified or included. √
4 | New Regulations on Import Taxes
HS Group Goods descriptions
Old PMK34
New PMK110
Old PMK34
New PMK110
Category 1 @10% Category 2 @7.5%
2202Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non-alcoholic beverages, not including fruit or vegetable juices of heading 20.09.
√
2204Wine of fresh grapes, including fortified wines; grape must other than that of heading 20.09.
√
2205Vermouth and other wine of fresh grapes flavoured with plants or aromatic substances.
√
2206Other fermented beverages (for example, cider, perry, mead, sake); mixtures of fermented beverages and mixtures of fermented beverages and non-alcoholic beverages, not elsewhere specified or included.
√
2208Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 % vol.; spirits, liqueurs and other spirituous beverages.
√
2710
Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 % or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils.
√
3213Artists', students' or signboard painters' colours, modifying tints, amusement colours and the like, in tablets, tubes, jars, bottles, pans or in similar forms or packings.
√
3304Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen or sun tan preparations; manicure or pedicure preparations.
√
3305 Preparations for use on hair. √
3306Preparations for oral or dental hygiene, including denture fixative pastes and powders; yarn used to clean between the teeth (dental floss), in individual retail packages.
√
3307
Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or included; prepared room deodorisers, whether or not perfumed or having disinfectant properties.
√
3401
Soap; organic surface-active products and preparations for use as soap, in the form of bars, cakes, moulded pieces or shapes, whether or not containing soap; organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap; paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent.
√ √
3402
Organic surface-active agents (other than soap); surface-active preparations, washing preparations (including auxiliary washing preparations) and cleaning preparations, whether or not containing soap, other than those of heading 34.01.
√
3403
Lubricating preparations (including cutting-oil preparations, bolt or nut release preparations, anti-rust or anti-corrosion preparations and mould release preparations, based on lubricants) and preparations of a kind used for the oil or grease treatment of textile materials, leather, furskins or other materials, but excluding preparations containing, as basic constituents, 70 % or more by weight of petroleum oils or of oils obtained from bituminous minerals.
√
New Regulations on Import Taxes | 5
HS Group Goods descriptions
Old PMK34
New PMK110
Old PMK34
New PMK110
Category 1 @10% Category 2 @7.5%
3405
Polishes and creams, for footwear, furniture, floors, coachwork, glass or metal, scouring pastes and powders and similar preparations (whether or not in the form of paper, wadding, felt, nonwovens, cellular plastics or cellular rubber, impregnated, coated or covered with such preparations), excluding waxes of heading 34.04.
√
3406 Candles, tapers and the like. √
3506Prepared glues and other prepared adhesives, not elsewhere specified or included; products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg.
√
3605 Matches, other than pyrotechnic articles of heading 36.04. √
3606Ferro-cerium and other pyrophoric alloys in all forms; articles of combustible materials.
√
3702Photographic film in rolls, sensitised, unexposed, of any material other than paper, paperboard or textiles; instant print film in rolls, sensitised, unexposed.
√
3922Baths, shower-baths, sinks, wash-basins, bidets, lavatory pans, seats and covers, flushing cisterns and similar sanitary ware, of plastics.
√
3925 Building equipment made of plastics, not elsewhere specified or included √
3926Other articles of plastics and articles of other materials of headings 39.01 to 39.14.
√
4011 New pneumatic tyres, of rubber. √
4013 Inner tubes, of rubber. √
4014Hygienic or pharmaceutical articles (including teats), of vulcanised rubber other than hard rubber, with or without fittings of hard rubber.
√
4015Articles of apparel and clothing accessories (including gloves, mittens and mitts), for all purposes, of vulcanised rubber other than hard rubber.
√
4016 Other articles of vulcanised rubber other than hard rubber √
4304 Artificial fur and articles thereof. √
4414 Wooden frames for paintings, photographs, mirrors or similar objects. √
4601
Plaits and similar products of plaiting materials, whether or not assembled into strips; plaiting materials, plaits and similar products of plaiting materials, bound together in parallel strands or woven, in sheet form, whether or not being finished articles (for example, mats, matting, screens).
√
4602Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from goods of heading 46.01; articles of loofah.
√
5701 Carpets and other textile floor coverings, knotted, whether or not made up. √
5702Carpets and other textile floor coverings, woven, not tufted or flocked, whether or not made up, including "Kelem", "Schumacks", "Karamanie" and similar hand-woven rugs.
√
5705 Other carpets and other textile floor coverings, whether or not made up. √
6 | New Regulations on Import Taxes
HS Group Goods descriptions
Old PMK34
New PMK110
Old PMK34
New PMK110
Category 1 @10% Category 2 @7.5%
5805Hand-woven tapestries of the type Gobelins, Flanders, Aubusson, Beauvais and the like, and needle-worked tapestries (for example, petit point, cross stitch), whether or not made up.
√
5904Linoleum, whether or not cut to shape; floor coverings consisting of a coating or covering applied on a textile backing, whether or not cut to shape.
√
6101Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, knitted or crocheted, other than those of heading 61.03.
√
6102Women's or girls' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, knitted or crocheted, other than those of heading 61.04.
√
6107Men's or boys' underpants, briefs, nightshirts, pyjamas, bathrobes, dressing gowns and similar articles, knitted or crocheted.
√
6108Women's or girls' slips, petticoats, briefs, panties, nightdresses, pyjamas, negligees, bathrobes, dressing gowns and similar articles, knitted or crocheted.
√
6109 T-shirts, singlets and other vests, knitted or crocheted. √
6112 Track suits, ski suits and swimwear, knitted or crocheted. √
6113Garments, made up of knitted or crocheted fabrics of heading 59.03, 59.06 or 59.07.
√
6114 Other garments, knitted or crocheted. √
6115Panty hose, tights, stockings, socks and other hosiery, including graduated compression hosiery (for example, stockings for varicose veins) and footwear without applied soles, knitted or crocheted.
√
6116 Gloves, mittens and mitts, knitted or crocheted. √
6117Other made up clothing accessories, knitted or crocheted; knitted or crocheted parts of garments or of clothing accessories.
√
6201Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, other than those of heading 62.03.
√
6202Women's or girls' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, other than those of heading 62.04.
√
6207Men's or boys' singlets and other vests, underpants, briefs, nightshirts, pyjamas, bathrobes, dressing gowns and similar articles.
√
6208Women's or girls' singlets and other vests, slips, petticoats, briefs, panties, nightdresses, pyjamas, negligees, bathrobes, dressing gowns and similar articles.
√
6210Garments, made up of fabrics of heading 56.02, 56.03, 59.03, 59.06 or 59.07.
√
6211 Track suits, ski suits and swimwear; other garments. √
6212Brassieres, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof, whether or not knitted or crocheted.
√
New Regulations on Import Taxes | 7
HS Group Goods descriptions
Old PMK34
New PMK110
Old PMK34
New PMK110
Category 1 @10% Category 2 @7.5%
6213 Handkerchiefs. √
6214 Shawls, scarves, mufflers, mantillas, veils and the like. √
6216 Gloves, mittens and mitts. √
6301 Blankets and travelling rugs. √
6302 Bed linen, table linen, toilet linen and kitchen linen. √
6303 Curtains (including drapes) and interior blinds; curtain or bed valances. √
6304 Other furnishing articles, excluding those of heading 94.04. √
6306Tarpaulins, awnings and sunblinds; tents; sails for boats, sailboards or landcraft; camping goods.
√
6307 Other made up articles, including dress patterns. √
6309 Worn clothing and other worn articles. √
6310Used or new rags, scrap twine, cordage, rope and cables and worn out articles of twine, cordage, rope or cables, of textile materials.
√
6506 Other headgear, whether or not lined or trimmed. √ √
6704Wigs, false beards, eyebrows and eyelashes, switches and the like, of human or animal hair or of textile materials; articles of human hair not elsewhere specified or included.
√
6907Ceramic flags and paving, hearth or wall tiles; ceramic mosaic cubes and the like, whether or not on a backing; finishing ceramics.
√
7003Cast glass and rolled glass, in sheets or profiles, whether or not having an absorbent, reflecting or non-reflecting layer, but not otherwise worked.
√
7004Drawn glass and blown glass, in sheets, whether or not having an absorbent, reflecting or non-reflecting layer, but not otherwise worked.
√
7005Float glass and surface ground or polished glass, in sheets, whether or not having an absorbent, reflecting or non-reflecting layer, but not otherwise worked.
√
7006Glass of heading 70.03, 70.04 or 70.05, bent, edge-worked, engraved, drilled, enamelled or otherwise worked, but not framed or fitted with other materials.
√
7009 Glass mirrors, whether or not framed, including rear-view mirrors. √
7312Stranded wire, ropes, cables, plaited bands, slings and the like, of iron or steel, not electrically insulated.
√
8413Pumps for liquids, whether or not fitted with a measuring device; liquid elevators.
√
8414Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters.
√
8471Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included.
√ √
8481Taps, cocks, valves and similar appliances for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves.
√
8 | New Regulations on Import Taxes
HS Group Goods descriptions
Old PMK34
New PMK110
Old PMK34
New PMK110
Category 1 @10% Category 2 @7.5%
8506 Primary cells and primary batteries √
8510Shavers, hair clippers and hair-removing appliances, with self-contained electric motor.
√
8517
Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless networks (such as a local or wide area network), other than transmission or reception apparatus of heading 84.43, 85.25, 85.27 or 85.28.
√ √
8518
Microphones and stands therefor; loudspeakers, whether or not mounted in their enclosures; headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers; audio-frequency electric amplifiers; electric sound amplifier sets.
√
8519 Sound recording or reproducing apparatus. √
8523Discs, tapes, solid-state non-volatile storage devices, "smart cards" and other media for the recording of sound or of other phenomena, whether or not recorded, including matrices and masters for the production of discs.
√
8539Electric filament or discharge lamps, including sealed beam lamp units and ultra-violet or infra-red lamps; arc-lamps; light-emitting diode (LED) lamps.
√
8544
Insulated (including enamelled or anodised) wire, cable (including co-axial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors.
√
8701 Tractors (other than tractors of heading 87.09). √
8702Motor vehicles for the transport of ten or more persons, including the driver.
√
8703Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02), including station wagons and racing cars.
√ √
8704 Motor vehicles for the transport of goods. √
8708 Parts and accessories of the motor vehicles of headings 87.01 to 87.05. √
8711Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars.
√ √
9202 Other string musical instruments (for example, guitars, violins, harps). √
9608
Ball point pens; felt tipped and other porous-tipped pens and markers; fountain pens, stylograph pens and other pens; duplicating stylos; propelling or sliding pencils; pen-holders, pencil-holders and similar holders; parts (including caps and clips) of the foregoing articles, other than those of heading 96.09.
√
9609Pencils (other than pencils of heading 96.08), crayons, pencil leads, pastels, drawing charcoals, writing or drawing chalks and tailors' chalks.
√
9619Sanitary towels (pads) and tampons, napkins and napkin liners for babies and similar articles, of any material.
√
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