Changes in Collection of Article 22 Income Tax in relation to payment of delivery of goods and activities in the field of import or other business activities

On 3 February 2016, the Minister of Finance (“MoF”) issued regulation number 16/PMK.010/2016 (“PMK-16”) regarding the fifth amendment of MoF regulation No. 154/PMK.03/2010 on Collection of Article 22 Income Tax (“Art.22 Income Tax”) in relation to payment on delivery of goods and activities in the field of import or other business activities.

PMK-16 provides several clarifications on collection of Art.22 Income Tax, as follows:

  • Clarifies that Art.22 Income Tax on purchase of raw materials in the form of products of forestry, plantation, agriculture, farm, and fishery is collected only if the materials have not been processed/ manufactured.
  • Clarifies that the Art.22 Income Tax on sales of gold bars by an entity producing gold bars within the country includes an entity that produces gold bars through a third party.

 

This regulation is effective from 3 February 2016.