MoF Regulation No. 200/PMK.03/2015 dated November 10, 2015

FISCAL TREATMENT FOR TAXPAYER AND TAXABLE ENTREPRENEUR WHO USE PARTICULAR COLLECTIVE INVESTMENT CONTRACT SCHEME RELATING TO FINANCIAL SECTOR DEEPENING

For income tax purposes, special purpose company (SPC) in particular collective investment contract (KIK) scheme will be considered as one unit with its KIK. Particular KIK scheme is real estate investment trust (DIRE) with or without SPC.
Dividend received by KIK from its SPC will be excluding in taxable income calculation and income tax article 23 withholding.

To obtain such fiscal treatment, KIK should attach the following documents in its annual income tax return when it receives dividend:

1. Copy of effective notification of DIRE issued by financial services authority (OJK);
2. Statement from OJK which mention taxpayer is a SPC in particular KIK scheme; and
3. Stamped duty statement which state SPC is merely set up for DIRE purposes.

Transfer of real estate from a party to SPC or KIK is not subject to income tax article 4 paragraph 2 and it does not need a statement of dispensation (SKB).

Revenue received from such transfer is considered as income tax object for the party who transfer it and the party should submit a written statement of real estate transfer to SPC or KIK to tax office where they are registered.

Authorized official who are notary, land deed official, district head or other authorized official, sign the deed, decision, agreement, deal or minutes of auction on land and/or building transfer relating to transfer of real estate from a party to SPC or KIK when the following documents are in present:

1. Copy of effective notification of DIRE issued and legalized by financial services authority (OJK);
2. Statement from OJK which mention taxpayer make a transaction with a SPC or KIK;
3. Stamped duty statement which mention taxpayer transfer its real estate to SPC or KIK;
4. Copy of a written statement of real estate transfer to SPC or KIK to tax office where they are registered and its receipt from tax office.

SPC or KIK is a low risk taxable entrepreneur who may get preliminary VAT overpayment tax restitution.

To get low risk taxable entrepreneur status, taxpayer should apply to DGT with following documents:

1. Copy of effective notification of DIRE issued by financial services authority (OJK);
2. Statement from OJK which mention taxpayer is a SPC in particular KIK scheme; and
3. Stamped duty statement which state SPC is merely set up for DIRE in form of KIK purposes.

DGT must issue a decision, whether giving a low risk status or notification of unprocessed application due to incomplete documents, within 15 days since a complete application is received. When 15 days period is overdue and DGT has not issued any decision, such application is considered as approved and decision letter must be issued within 15 days after its due date. Low risk status will be valid for 12 fiscal periods since its decision issued. Taxable entrepreneur may reapply its status when a validation period is expired.

Low risk status will be void when:

1. Taxable entrepreneur is under preliminary evidence examination or inspection; or
2. Based on examination result taxable entrepreneur does not run particular KIK scheme.

Low risk status will be end at the time of:

1. Issuance of preliminary evidence examination warrant; or
2. Examination result report is signed.

DGT may issue a notification letter of revocation of low risk taxable entrepreneur.

SPC or KIK may get a preliminary restitution of VAT overpayment by applying to DGT with following condition:

1. Already obtain a low risk status from DGT; and
2. There is a VAT in tax credit on acquisition of real estate.

Such application will valid for one fiscal period for one application by using VAT periodic tax return or special request letter.

After receiving such request, DGT will review:

1. Validation of its low risk status;
2. VAT in tax credit on acquisition of real estate;
3. Completeness of VAT tax return and all its attachments;
4. Correctness of VAT writing and calculation;
5. Taxable entrepreneur already paid the VAT.

DGT will issue a decision within one month after a complete application is received. When this period is overdue and no decision is issued, such application will be considered as approved and a decision must be issued within 7 days after the due date.

A decision will not be issued when:

1. Taxable entrepreneur is not a SPC or KIK in particular KIK scheme who get a low risk status;
2. No VAT tax credit on acquisition of real estate;
3. Incomplete attachment of VAT tax return;
4. No VAT tax overpayment;
5. VAT payment by taxable entrepreneur is not correct.

When such decision is not issued, the following provision will be applied:

1. A written notification will be sent to taxable entrepreneur; and
2. Such application will be processed under article 17B Law No. 16 Year 2009 concerning general taxation provision and procedures.

This regulation will be effective on its promulgation date.