by taxpert® team*
Minister of Finance Regulation Number 99/PMK.010/2020 regarding Criteria and/or List of staple goods of which are mostly required by the people that are not subject to Value Added Tax (referred to as “PMK-99/2020”) was issued on August 4th, 2020 and entry into force on August 5th, 2020. PMK-99/2020 issued to replace Minister of Finance Regulation Number 116/PMK.010/2017 dated August 15th, 2017 regarding the same (referred to as “PMK-116/2017”).
As replacement to PMK-116/2017, PMK-99/2020 remain all of staple goods of which are mostly required by the people that are not subject to Value Added Tax as mentioned in PMK-116/2017 as follows: rice and grain; corn; sago; soy; consumption salt; meat; egg; milk; fruits; vegetables; yams; seasonings; and consumption sugar.
Main difference between PMK-99/2020 and PMK-116/2017 is on fresh fish. In PMK-99/2020, fresh fish is categorized as staple goods of which are mostly required by the people that are not subject to Value Added Tax and which was not categorized in PMK-116/2017. The issuance of PMK-99/2020 give an enlightenment on how VAT treatment on fresh fish.
Further, as taxpayers and tax consultants, we may be wondering why finally fresh fish categorized as staple goods of which are mostly required by the people that are not subject to Value Added Tax? In our opinion, this is a common question because when we see Law of The Republic of Indonesia Number 42 Year 2009 on The Third Amendment of Law Number 8 Year 1983 on The Value Added Tax of Goods and Services and Tax of Luxury Goods Sale (referred to as “UU PPN”) on article 4A paragraph 2 letter b, fresh fish is not mentioned as staple goods of which are mostly required by the people that are not subject to Value Added Tax. The explanation of article 4A paragraph 2 letter b UU PPN only mention 11 (eleven) staple goods which are: rice; grain; corn; sago; soy; salt; meat; egg; milk; fruits; and vegetables. Regardless of that, Government of the Republic of Indonesia have done in-depth study and have very good reasons finally adding fresh fish as staple goods of which are mostly required by the people that are not subject to Value Added Tax.
Furthermore, since PMK-99/2020 only listed fresh fish as staple goods of which are mostly required by the people that are not subject to Value Added Tax, then processed fish such as: smoked fish, salted fish, canned fish, and other processed fish are subject to Value Added Tax. Processing changes goods in shape and nature defines as producing activities in UU PPN as mentioned in article 1 number 16. In our opinion, this provision is so clear and no need to argue.
*The writing above is simple and non-binding analysis on PMK-99/2020 wrote by us (taxpert® team). It means our opinion as stated in the writing may be different with the opinion of the Directorate General of Tax and we are not responsible for such differences. Please refer to the full version of PMK-99/2020 for reference. Click the button below to download, only available in Bahasa Indonesia.
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