Technical Regulation for VAT Collection on Auctioned Goods Are Being Drafted

The government, through the Ministry of Finance (“ Kemenkeu ”), will issue Regulation of the Minister of Finance (“ RPermenkeu ”) regarding Procedures for the Collection of Value Added Tax (“ VAT ”) on the Delivery of Taxable Goods (Barang Kena Pajak–“ BKP ”) Through Auction Organizers (“ RPermenkeu on VAT for Auctions ”). This regulation is a follow-up to Article 9 paragraph (3) of Regulation of the Government No. 44 of 2022 (“ PP 44/2022 ”) onthe collection of VAT on the delivery of BKP through auction organizers.

“So far, there has been no comprehensive technical regulation, which has led to differences in practice, where some auction organizers collect VAT while others don’t,” said Rosmauli, Director of Counseling, Services, and Public Relations at the Directorate General of Tax (Direktorat Jenderal Pajak– “ DJP ”) of Kemenkeu to Hukumonline.

This regulation is expected to provide legal certainty as well as administrative ease in optimizing state revenue. The substances that are regulated include the scope of objects and subjects of VAT, classification of auction groups, the basis for tax imposition in the form of auction principal, and the designation of auction organizers as VAT collectors of other parties.

“It is currently undergoing harmonization at the Ministry of Law,” she added.