DECREE OF MINISTER OF FINANCE
No.239/KMK.01/1996

ON
THE IMPLEMENTATION OF GOVERNMENT REGULATION No.42/1995 ON IMPORT DUTY,
IMPORT SURCHARGES, VALUE ADDED TAX AND SALES TAX ON LUXURY GOODS
AS WELL AS INCOME TAX WITHIN THE FRAMEWORK OF IMPLEMENTING GOVERNMENT PROJECTS
FINANCED WITH FOREIGN GRANTS OR LOANS

THE MINISTER OF FINANCE,

Considering :

that with the stipulation of Government Regulation No.42/1995 concerning import duty, import surcharges, value added tax and sales tax on luxury goods as well as income tax within the framework of implementing government projects financed with foreign grants or loans, it is deemed necessary to lay down a decree of the Minister of Finance on the implementation of the government regulation.

In view of :

• 1. Law No.6/1983 on general provisions and taxation procedures (Statute Book of 1983 No.49, Supplement to Statute Book No.3262) as already amended by Law No.9/1994 (Statute Book of 1994 No.59, Supplement to Statute Book No.3566);
• 2. Law No.7/1983 on income tax (Statute Book of 1963 No.50, Supplement to Statute Book No.3263) as already amended by Law No.7/1991 (Statute Book of 1991 No.93, Supplement to Statute Book No.3459) and the latest by Law No.10/1994 (Statute Book of 1994 No.60, Supplement to Statute Book No.3569);
• 3. Law No.8/1983 on value added tax on goods and service-and sales tax on luxury goods (Statute Book of 1983 No.51, Supplement to Statute Book No.3264) as already amended by Law No.11/1994 (Statute Book of 1994 No.61, Supplement to Statute Book No.3568);
• 4. Law No.10/1995 on customs affairs (Statute Book of 1995 No.75, Supplement to Statute Book No.3612);
• 5. Government Regulation No.6/1969 on import levies (Statute Book of 1969 No.7) as already amended and supplemented the latest by Government Regulation No.26/1988 (Statute Book of 1988 No.50, Supplement to Statute Book No.3384);
• 6. Government Regulation No.47/1994 on the calculation of taxable income and the settlement of income tax in the current year (Statute Book of 1994 No.76, Supplement to Statute Book No.3579);
• 7. Government Regulation No.50/1994 on the implementation of Law No.8/1983 on value added tax on goods and services and sales tax on luxury goods, as already amended by Law No.11 /1994 (Statute Book of 1994 No.79, Supplement to Statute Book No.3581);
• 8. Government Regulation No.42/1995 on import duty, import surcharges, value added tax and sales tax on luxury goods as well as income tax within the framework of implementing government projects financed with foreign grants or loans;
• 9. Presidential Decree No.56/1988 on the appointment of certain organizations and treasurers to collect and remit value added tax and sales tax on luxury goods;
• 10. Presidential Decree No.15/1994 on the customs inspection of goods imported within the framework of implementing government projects financed with foreign aid;
• 11. Presidential Decree No.16/1994 on the guidelines on the realization of the state budget as already amended by Presidential Decree No.24/1995;
• 12. Decree of the Minister of Finance No.599/KMK.04/1994 dated December 21, 1994 on the appointment of collectors of income tax under Article 22, the characteristics and the amount of tax collected as well as the procedure for remitting and reporting tax collected, as already amended by Decree of the Minister of Finance No.147/KMK.04/1995 dated April 3, 1995.

DECIDES :

By revoking :

Decree of the Minister of Finance No.191/KMK.04/1995 dated May 12, 1995 on import duty, import surcharges, value added tax and sales tax on luxury goods as well as income tax within the framework of implementing government projects financed with foreign loans.

To stipulate :

THE DECREE OF THE MINISTER OF FINANCE CONCERNING THE IMPLEMENTATION OF GOVERNMENT REGULATION No.42/1995 ON IMPORT DUTY, IMPORT SURCHARGES, VALUE ADDED TAX AND SALES TAX ON LUXURY GOODS AS WELL AS INCOME TAX WITHIN THE FRAMEWORK OF IMPLEMENTING GOVERNMENT PROJECTS FINANCED WITH FOREIGN GRANTS OR LOANS.

Article 1

Referred to in this decree as :

• a. Government projects shall be projects which are included in the Project List (DIP) or other documents treated as a such, including projects financed with funds under a subsidiary loan agreement (PPP);
• b. Foreign loans shall be state revenues which are in the form of foreign exchange and/or foreign exchange converted into the rupiah, or in the form of goods and/or services including expertise and training from foreign donors, and which must be paid back under certain conditions;
• c. Foreign grants shall be state revenues which are in the form of foreign exchange and/or foreign exchange converted into the rupiah, or in the form of goods and/or services including expertise and training from foreign donors, which are not necessarily paid back;
• d. Other documents treated as DIP shall be documents on annual budget for projects which are accommodated in the List of Project Financing (DIPP), the Letter of Approval of Project Budget (SPABP), the Annual Financing Plan (RPT), the Letter of Details of Plantation Project Financing (SRP3), the Budget Plan (RAB), the List of Subsidiary Loan (DIPPLN), the Letter of Authorization (SKO), and other documents stipulated by the Minister of Finance;
• e. Subsidiary Loan Agreement (PPP) shall be the subsidiary loan agreement between the government c.q. the Ministry of Finance and state-owned companies (BUMN)/regional administration-owned companies (BUMD)/regional administrations (PEMDA) in connection with projects implemented by BUMN/BUMD/PEMDA by using grants or two step loans;
• f. Main contractors shall be contractors, consu1tants and suppliers, which according to existing contracts implement government projects financed with foreign grants or loans, including experts and trainers financed with foreign grants;
• g. Contracts shall be agreements on the procurement of goods and services (KPBJ) or other documents treated as such, which are signed by project managers or authorized officials and main contractors.

Article 2

(1) The import of goods by main contractors within the framework of implementing government projects wholly financed with foreign grants or loans shall be exempted from import duty (BM) and import surcharges (BMT) which are due as of April 1, 1995.

(2) The import of goods by main contractors within the framework of implementing government projects partly financed with foreign grants or loans shall have only portion of government projects financed with foreign grants or loans exempted from BM and BMT which are due as of April 1, 1995.

Article 3

(1) The import of taxable goods (BKP), the use of taxable services (JKP) from outside customs areas, the use of intangible BKP from outside customs areas, the delivery of BKP and/or the provision of JKP by main contractors within the framework of implementing government projects wholly financed with foreign grants or loans shall not be subject to collection of value added tax (PPN) and sales tax on luxury goods (PPnBM) which are due as of April 1, 1995.

(2) The import of BKP, the use of JKP from outside customs areas, the use of intangible BKP from outside customs areas, the delivery of BKP and/or the provision of JKP by main contractors within the framework of implementing government projects partly financed with foreign grants or loans, shall have only portion of government projects financed with foreign grants or loans exempted from collection of PPN and PPnBM which are due as of April 1, 1995.

Article 4

(1) Income received or earned by main contractors in connection with the implementation of government projects wholly financed with foreign grants or loans, shall have its income tax (PPh) which is due as of April 1, 1995, borne by the government.

(2) Income received or earned by main contractors in connection with the implementation of government projects partly financed with foreign grants or loans, shall only have its PPh on portion of income received or earned in connection with the implementation of government projects financed with foreign grants or loans which is due as of April 1, 1995, borne by the government.

(3) PPh on income received or earned by local workers and expatriates working for main contractors shall be subject to the withholding of PPh under Articles 21 and 26 of Law No.7/1983 on income tax as already amended the latest by Law No.10/1994.

Article 5

(1) The government-borne PPh on income received or earned by main contractors in connection with the implementation of government projects financed with foreign grants or loans as meant in Article 4 paragraphs (1) and (2) shall be credited against PPh on the entire income which is due.

(2) If the annual income tax returns (SPT PPh) indicate overpayment, then overpayment originating in the government-borne PPh shall not be restituted.

Article 6

(1) Main contractors implementing government projects partly financed with foreign grants or loans shall remit BM, 8MT and PPnBM as well as PPh originating in sources of funds other than foreign grants or loans in accordance with the law in force.

(2) The master list of goods to be imported shall be made by the project manager in accordance with the contract and be validated by the first echelon official or the official appointed to supervise the relevant project.

(3) A copy of the contract along with the master list as meant in paragraph (2) shall be submitted by the project manager to the Minister of Finance c.q. the Director General of Customs and Excise.

(4) A copy of the contract shall be submitted to the Tax Service at which the main contractor is registered as taxpayer, and if the main contractor does not yet have taxpayer code number (NPWP), then the contract shall be submitted to the Tax Service for Organizations and Foreigners.

Article 7

(1) Exemption of BM and BMT as meant in Article 2, uncollection of PPN and PPnBM as meant in Article 3, as well as uncollection of the government-borne PPh as meant in Article 4 in connection with the import of goods by main contractors, do not need a customs and excise deposit form (SSBC) (for BM and BMT) and a tax deposit form (SSP) (for PPN and PPnBM as well as PPh).

(2) Import declarations (PIUD) for the import of goods as meant in paragraph (1) already having an "Exempted from BM and BMT, PPN and PPnBM Uncollected, Government-borne PPh" stamp affixed, shall be treated as evidence of collection of tax due.

(3) In connection with the delivery of BKP and/or the provision of JKP which are/is not subject to collection of PPN and PPnBM as meant in Article 3, main contractors shall make tax invoices having a "PPN and PPnBM Uncollected" stamp affixed.

(4) The government-borne PPh as meant in Article 4 on payment from the treasurer or other authorized bodies shall be complete with SSP PPh or evidence of collection of PPh having a "Government-borne PPh" stamp affixed.

Article 8

(1) The acquisition of BKP and/or JKP by main contractors implementing government projects financed with foreign grants or loans shall remain subject to PPN and PPnBM collected by taxable companies (PKP) delivering BKP and/or providing JKP.

(2) PPN which is already paid by main contractors in connection with the acquisition of BKP and/or JKP as meant in paragraph (1) shall constitute input tax which can be credited against output tax.

Article 9

If BM, BMT, PPN and PPnBM as well as PPh which are due in connection with the implementation of government projects financed with foreign grants or loans, and which are already collected or remitted as of April 1, 1995, then main contractors may apply to the Tax Service at which they are registered for refunds on PPN, PPnBM and PPh, and to the Customs and Excise Inspection Office through which the goods are entered for refunds on BM and BMT.

Article 10

Further provisions required for the implementation of this decree shall be stipulated by the Director General of Budgetary Affairs, the Director General of Taxation, and the Director General of Customs and Excise, either jointly or individually, according to their respective fields of task.

Article 11

This decree shall come into force as from the date of stipulation and be retroactively valid as from April 1, 1995.

For public cognizance, this decree shall be announced by placing it in the State Gazette of the Republic of Indonesia.

Stipulated in JAKARTA
On April 1, 1996

THE MINISTER OF FINANCE
sgd.
MAR'IE MUHAMMAD