Saturday 16 December 2023

Imported Electric Car Incentive Valid until 2025, Still Subject to 11 Percent VAT


Incentives for fully imported electric cars, which were determined by the government through Presidential Decree 79 of 2023, will be valid until 2025. The incentives include discounts on import duties, PPnBM and regional taxes.

This incentive does not include Value Added Tax or VAT which is 11 percent. This is different from purchasing domestically made electric cars which already enjoy VAT of only 1 percent.

Deputy for Infrastructure and Transportation Coordination at the Coordinating Ministry for Maritime Affairs and Investment, Rachmat Kaimuddin, said that the 11 percent VAT for imported electric cars is not excluded to differentiate between those produced domestically.

“For those who want to commit to building a factory in Indonesia, we will provide relief for two years until the end of 2025, we will give zero percent sales tax on luxury goods and import duties, however, the VAT is still 11 percent so that it is different from those in ,” he said in Jakarta, Friday (15/12/2023).

He emphasized that the automotive industry which wants to build an electric car factory in the country is still allowed to import CBU cars until the end of 2025, as stated in Presidential Decree Number 79 of 2023 concerning Amendments to Presidential Regulation Number 55 of 2019 concerning the Acceleration of the Battery-Based Electric Motor Vehicle Program (Battery Electric Vehicle) for Electric Transportation.

Even so, Rachmat emphasized that they must produce the same number of vehicles domestically as the vehicles they import until 2027.

If the specified number is not achieved, Rachmat said they will be subject to sanctions in the amount equivalent to the incentives provided. given.

“So, if they import, for example, a thousand units until 2025, they have to produce a thousand units in 2027. If they don’t have enough, they have to pay, subject to sanctions equal to the incentives we provide. “So, you can’t just pretend to be producing even though it’s not,” Rachmat explained.

In addition, the VAT discount from 11 percent to 1 percent will also not apply to CBU products. The reason is, this product does not have Domestic Component Level requirements in accordance with the Presidential Decree.

Rachmat said that manufacturers can not only create their own factories, but are also allowed to collaborate with local assembly facilities to produce electric cars.

“Actually, in principle, TKDN must be 40 percent, so whether you build a factory or whether you can collaborate, as long as there is enough TKDN, then the workforce will be built domestically,” concluded Rachmat.

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