The tax rate is the exchange rate or currency used as the basis for calculating tax transactions in Indonesia.
The tax transactions specifically are the settlement of Import Duties (Imports), Export Duties (Exports), Value Added Tax (PPN), Luxury Goods Value Added Tax (PPnBM), and Income Tax (PPh).
Primarily, the Tax Rate is used by companies or individuals conducting international trade transactions.
Where there are differences in exchange rates from various countries and the value of the Tax Rate will convert that value into rupiah currency.
Companies or individual businesses use the Tax Rate for their tax reporting purposes. And the Tax Rate is set directly by the Ministry of Finance (KMK) once every 1 week.
So, the tax rate will always fluctuate depending in particular on changes in the value of the American dollar (USD) which is used as the main reference.
Types of Transactions That Have a Relationship with the Tax Rate
The following is a further explanation of the types of tax transactions that have been mentioned previously
Import Duty is a levy imposed by the Government on various types of imported goods entering Indonesia.
Import Duty Tariffs are regulated directly by KMK in the Indonesian Customs Tariff Book (BTKI). Generally, the flat rate for Import Duty is 7.5%.
This import duty rate must be multiplied by the basic value of imposition of import duty (NDPBM). The NDPMBs are:
Goods Price ( Cost) + Insurance Value ( Insurance ) + Postage ( Freight )
So, the calculation of the Import Duty is:
NDPMB (which has been adjusted to the applicable tax exchange rate) x Import Duty Rates
For the record, all components of NDPBM must comply with the applicable tax rate.
In addition, companies or businesses that import goods are not included in the calculation of Import Duties only.
The imported goods must also be subject to Value Added Tax (PPN), Income Tax (PPh Article 22 Import), and PPnBM.
In particular, the Luxury Goods Added Tax (PPnBM) is imposed on imported goods that are included in the luxury goods category according to the provisions of the PPnBM regulation itself.
Value Added Tax (PPN) and Value Added Tax on Luxury Goods (PPnBM)
VAT is a levy imposed on an individual or corporate taxpayers who make transactions for buying and selling taxable goods or services.
While PPnBM has the same definition as VAT, it’s just that there are differences in the object of tax and the rate. Where the Tax Object of PPnBM tends to be luxury goods.
This type of tax rate payment must be deposited and reported at the end of each month to the state by the seller as a Taxable Entrepreneur (PKP).
In general, the VAT rate charged is 10%. However, the tariff value may change to a minimum of 5% and a maximum of 15% according to the terms and conditions of the applicable Government Regulation (PP).
Meanwhile, the PPnBM tariff is a minimum of 10% and a maximum of 20% according to the type of goods which is also regulated by the PP.
Basically, the formula for calculating VAT or PPnBM is the Sales Value of Tax Objects (NJOP) times the applicable rate. However, the specific calculation of VAT or PPnBM in the context of importing goods is:
NDPM + Import Duty + 10%
The rate of VAT and PPnBM for the export of goods or services is 0% or in other words not imposed at all.
Income Tax (PPh)
PPS is a levy imposed on Tax Subjects in the form of individuals or entities on the income earned.
The tax subject will calculate, deposit, and report PPh on the Tax Object in accordance with Law number 36 of 2008. In the context of importing goods or services, the PPh formulation is:
NDPM + Import Duty + 7.5%
Export Duty is a levy imposed by the state on exported goods based on the Customs Law.
Usually, Export Duties are imposed on types of goods in the form of Natural Resources owned and become the needs of the state.
And goods subject to Export Duties usually tend to be raw or semi-finished products. In general, the calculation formulation of Export Duty is:
Export Duty Rate x Export Price per unit of goods x quantity of goods x Currency exchange rate or tax rate
Update Tax Exchange Rates Through Journal Finance Applications
You as a businessman or company owner who conducts buying and selling transactions between countries (import-export) of course must always update the value of the Tax Exchange Rate.
Because apart from being the basis for calculating taxation, the Tax Rate can also be used as an indicator in making decisions on your international trade transactions.
In addition, you must also enter data on tax information imposed on the Tax Objects that are traded.
Therefore, you must have an accounting system that can also document the value of taxes imposed on each of your business transactions.
You can try Jurnal, Online Accounting Software that offers complete and detailed accounting features.
With the invoice software from the Journal, you don’t have to worry about changes in exchange rates in the accounting process.
Because the Journal is equipped with a Multi-Currency or Multi-Currency feature that has been integrated with online exchange rates from Bank Indonesia, Taxes, and the Fixer API, so you can determine the exchange rate that suits your business.