Luxury Home Tax, How to Calculate the Tax

Luxury Home Tax, How to Calculate the Tax

Luxury house tax– Luxury house tax is levied on occupancy with a total area of 400m2 or more. Or a house that uses electricity with a power of more than 6,600 watts. In addition to houses, apartments, flats and the like, they are also included in the category of Taxable Goods which are classified as luxury so that Sales Tax on Luxury Goods (PPnBM) is imposed at a rate of 20% (twenty percent).

Luxury house tax rules or in this case include Sales Tax on Luxury Goods (PPnBM). It has been stated in Government Regulation of the Republic of Indonesia Number 7 of 2002 concerning the Second Amendment to Government Regulation Number 145 of 2000 concerning Classification of Taxable Goods. as Luxury Goods Subject to Sales Tax on Luxury Goods.

What is a Luxury Home Tax

Luxury house tax

What is a luxury home tax? Luxury house tax is Sales Tax on Luxury Goods or PPnBM which is impos on transactions of Taxable Goods (BKP) classifi as luxury, whether produc domestically or through import goods from abroad.
In Government Regulation of the Republic of Indonesia Number 7 of 2002 concerning the Second Amendment to Government Regulation Number 145 of 2000 concerning Groups of Taxable Goods Classifi as Luxury Subject to Sales Tax on Luxury Goods, it is stated that luxury residential groups such as luxury houses, apartments, condominiums, town houses, and the like are subject to a luxury home tax rate of 20%. Apart from houses, other luxury items that are subject to PPnBM include:

1.Car

Luxury car PPnBM is a sales tax impos on certain types of cars as regulat by Government Regulation 22 of 2014 and PMK-64/PMK.011/2014. Owning a vehicle itself has different tax values and adjusts itself to the capacity of the car engine you have.

2.Possession of Firearms

In Indonesia it is very difficult to get a license to own a firearm. Due to strict regulations, firearm ownership will be subject to PPnBM up to 40%. Not everyone can own a firearm and it takes a very strict process to be able to have one.

3.Electronic Device

The government has also imposed a Sales Tax on Luxury Goods on Taxable Goods such as electronic devices. The regulation regarding the taxation of electronic devices has been mention in the Minister of Finance Regulation (PMK) Number 121/PMK.011/2013 which was sign directly by the Minister of Finance on 26 August 2013.

There are several electronic devices that are subject to PPnBM worth 10%, namely:

  • Refrigerators with a capacity of more than 180 liters and have a selling price of over IDR 10 million per unit
  • Air conditioning machine with cooling capacity above 1 PK or with a selling value above IDR 5 million per unit
  • Digital cameras and various forms of photographic cameras that have a selling and import value of more than Rp. 10 million per unit
  • Instant water heaters or water heaters that have a storage area that has an import value or a selling price of more than IDR 5 million.

Luxury House Tax Amount According to PPnBM

According to PPnBM, luxury homes subject to tax rates are houses with a total area of 400m2 or more. As well as homes that use electricity with a power of more than 6,600 watts. The amount of this luxury home tax itself is 20% of the transaction price. And it is only charged once when the house is handed over to the consumer.
The purpose of holding PPnBM takes into account Article 5 of the Value Added Tax (PPN) Law, including:

  • Fairness of tax burden between low-income consumers and high-income consumers
  • Control of consumption of luxury goods
  • Protection against small or traditional producers
  • Security of state revenue

It should also be not that PPnBM which also includes luxury house tax has its own characteristics, namely PPnBM is an additional levy in addition to or after VAT. In addition, PPnBM is not a tax that can be credit with VAT. PPnBM is only collect once when importing BKP which is classifi as luxury or when the delivery of luxury BKP is carri out by a manufacturer PKP from BKP which is classifi as luxury.

How to Calculate Luxury Home Tax

Luxury house tax must be paid by the Taxable Entrepreneur (PKP) and collect by the State Treasury Service Office. The Treasurer of the Central and Regional Governments, and the Directorate General of Customs and Excise. Tax payments or deposits can be made using the Tax Deposit Form (SSP) which is available at the tax service office and Tax Counseling and Consultation Service Offices (KP2KP) throughout Indonesia.

SSP is said to be complete and valid if the deposit amount is in accordance with what is stated on the Taxpayer Nominative List (DNWP). Prepared by the payee Bank, Post and Giro Office, or the Office of the Directorate General of Taxes. Customs and Excise accepts deposits. For reporting, after PPnBM alias PPnBM is calculated as PKP. Taxpayers must report it to the local KPP no later than the end of the following month after the tax period ends.

For example, for the March tax, it must be report no later than April 15. PPnBM list on SKPKB, SKPKBT, and STP that has been paid off must be report immediately to the issuing KPP. For PPnBM on imports collect by the Directorate General of Customs and Excise, the payment is no later than 1 day after the collection is made.

Then how to calculate luxury home tax? Here’s an illustration!

PT Maju Bangun Persada sells luxury home products at a price of Rp. 25 billion in the Cilandak area. The house is includ in BKP which in addition to being subject to VAT, is also subject to PPnBM at a rate of 20%. So, how much is PPnBM or luxury house tax?

Basis of Imposition of PPnBM Home Tax = IDR 25,000,000,000
VAT = 10% x IDR 25,000,000,000 = IDR 2,500,000,000
PPnBM = 20% x Rp25,000,000,000 = Rp5,000,000,000

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