Luxury Tax Levy has Been Lifted for Yacht Tourism

The government explained that the PPnBM relaxation on luxury import foreign yacht was intended to encourage the development of tourism activities, especially marine tourism.

I feel like we've been talking about this for years now.

Oh wait, we have... 20 November 2018

Luxury Yacht Tariff To Be Cut in 2019?

and August of that same year:

Change of Tax Policy – Foreign Yachts & Alcohol

Here we are, 2020, the longest year in the history of the 21st Century, and the regulation has been officially signed.

This is a game changer for the yacht tourism industry - and not good news for legacy & local operators

As I talked about in our previous coverage of this momentous decision, this is a big deal. It basically changes the entire landscape of the yacht tourism industry in Bali and all of Indonesia - and probably not for the benefit of local operators.

In the past, these tariffs have protected local companies from big cruise conglomerates and smaller luxury brand yachts that have more resources and global clout than local yacht tourism operators.

Ok, so what is PPnBM and why does it matter?

The PPnBM relaxation on foreign imported yachts is laid out in Government Regulation (PP) No.61/2020 concerning taxable goods (BKP) which are classified as luxury (other than motorized vehicles) subject to PPnBM. Previously that levy was above 75% - easily detering anyone from important their yacht into Indonesia to operate commercially.

In the new regulation, the government explained that

"PPnBM relaxation on the yacht is aimed at encouraging the development of tourism activities, especially marine tourism. Considering that the yacht is a luxury BKP, so to encourage the marine tourism industry, the submission by the producer or the import of the yacht for the tourism business needs to be exempted from the imposition of PPnBM," wrote the explanation of PP No.61/2020 quoted by Bisnis.com, Tuesday (3 November 2020).

However, the government also emphasized that if the yacht is not used for tourism activities or is transferred to another party, then the yacht PPnBM will be considered a gap in payment and must be paid. The payment period is 1 month after finding a discrepancy in the allocation of the fiscal facility.

Further details of the new regulation state that

Meanwhile, if within 1 (one) month the PPnBM payable is not paid or is underpaid, the Taxpayer (WP) will be subject to sanctions in accordance with the provisions of laws and regulations in the field of taxation.

Bali Yacht Services has obtained partial copies of the new regulation for your reference below:

Thanks for reading, any new developments regarding this new regulation will be added to here.

Check us out on Twitter @baliyachts

Bali Yacht Services aims to provide news and updates regarding the yacht maritime industry in Indonesia, with a special focus on boating & cruising in Bali.

Category: Yacht Tourism, Gov't Policy

Date: 6 November 2020