General Information
Various fiscal incentives provided by the government have successfully attracted investments in the green industry sector, including the electric vehicle business sector. This week, ET-Consultant is back to deliver the types of tax incentives given to four-wheeled battery electric vehicles, namely exemptions from Customs Duties and Sales Tax on Luxury Goods, as regulated under Indonesian Investment Coordination Board Regulation Number 6 Year 2023.
CBU Four-Wheeled Battery Electric Vehicles
Business actors may receive tax exemptions for the import of Completely Built Up (CBU) Four-Wheeled Battery Electric Vehicles in a specified quantity within the incentive period, in the form of:
- 0% (zero percent) import duty; and
- Sales Tax on Luxury Goods being covered by the government.
CKD Four-Wheeled Battery Electric Vehicles
Business operators may receive tax exemptions for Completely Knocked Down (CKD) Four-Wheeled Battery Electric Vehicles in a specified quantity that will be assembled in Indonesia with a minimum Domestic Component Level of 20% (twenty percent) and a maximum of less than 40% (forty percent).
This incentive is valid for a certain period, in the form of:
- 0% (zero percent) import duty for the import of CKD Four-Wheeled Battery Electric Vehicles; and
- Sales Tax on Luxury Goods being covered by the government upon the delivery of Four-Wheeled Battery Electric Vehicles produced from the CKD Four-Wheeled Battery Electric Vehicles that have been granted incentives as mentioned in point a.
Requirements to Qualify for Tax Incentives
- To receive tax incentives, business actors must commit to manufacturing Four-Wheeled Battery Electric Vehicles in Indonesia by adhering to the technical specifications provided by the ministry responsible for the industry.
- There are certain investment criteria that must be met by the business actors concerned:
- Having the intention to set up manufacturing facilities for Four-Wheeled Battery Electric Vehicles in Indonesia;
- Previously invested in producing traditional four-wheeled vehicles in Indonesia and now planning to transition to battery electric vehicles, either partially or entirely;
- Alternatively, previously invested in facilities for manufacturing battery electric vehicles in Indonesia to introduce new products by enhancing production plans or capacity. This does not include expanding product variety without increasing production plans or capacity.
- The period for utilizing incentives of this regulation is effective until 31st December 2025.
***
ET Consultant is a Business Consultant and Legal Consultant Expert that provides support for local and multinational clients to start and manage their business operations in Indonesia. ET Consultant specializes in Business Incorporation, Licensing & Legal, Accounting & Taxes, Immigration, and Advisory Services.
Ready to find out more?
Excellent and Trusted Consultant (ET Consultant)
PPHUI Building Lantai 2 suite 210 Jl. H.R. Rasuna Said Kav. C-22 Kuningan
Jakarta Selatan, 12940 Indonesia.
Tlp : 021 5290 7039
Email : [email protected]