Jakarta, Armfalcon.com – For those of you who are planning to build your own house in the near future, you need to understand how to calculate the tax so that it won’t be a problem in the future. This is because the government has regulated the rules regarding house construction taxes, but unfortunately, only a few people know about this.
When building a house, the government imposes a value added tax (VAT) on the owner of the house. The rate charged is 2.2% of the total costs incurred. This is in accordance with the rules stated in PMK Number 61/PMK.03/2022 concerning Value Added Tax (VAT) on Self-Building Activities (KMS). This rule applies from April 1, 2022.
How to calculate the tax?
Let’s look at the explanation from the Head of the Sub Directorate of Value Added Tax (VAT) for Trade, Services and Other Indirect Taxes of the DGT, Bonarsius Sipayung to Armfalcon.com.
He explained, the calculation is 20% multiplied by the 11% VAT rate, multiplied by the Tax Imposition Basis (DPP) or 2.2% of the DPP. The KMS DPP PPN is a certain value in the amount of the costs incurred and/or paid to construct the building for each tax period until the building is completed, but this fee does not include land acquisition costs.
“If for example the (total) cost of building is Rp. 1 billion, it means that the DPP is Rp. 200 million. So if an effective rate is made, it is 11% x 20% x total costs. That means around 2.2% x Rp. 200 million (Rp. 4 million). That is the VAT payable on self-construction activities,” said Bonarsius.
Furthermore, said Bonar, the VAT fee must be paid by the actor who carried out the KMS himself, then deposited in the bank.
“This is considered to have been reported when making a Tax Payment Letter (SSP) and will go to the DGT with the State Revenue Transaction Number (NTPN) listed in the SSP. So this (regulation) is also already payable, currently it’s just an adjustment,” he said.
VAT on KMS that has been deposited can be credited as long as it meets the conditions for input tax credit and SSP filling. Referring to PMK 61/2022, KMS is a building activity that is carried out not in business or work activities by individuals or entities, the proceeds of which are used alone or used by other parties.
This means that buildings can be in the form of houses, shophouses (shops), offices, and so on. The building area to be built is at least 200 m2 (two hundred square meters).
“The main construction consists of wood, concrete, masonry bricks or similar materials, and/or steel. It is intended for residences or places of business activity. And the area of the building to be built is at least 200 m2 (two hundred square meters),” writes Article 2 paragraph (4). So if the self-construction activity is in the form of a house or other building under an area of 200 m2, then VAT is not subject to it.
Furthermore, the KMS in question can be carried out simultaneously within a certain period of time or in stages as a unit of activity, as long as the deadline, between the stages of building is not more than 2 (two) years.
However, if the stages of building activity are more than 2 years, the activity is a separate building construction activity, as long as it fulfills the provisions.
In the process, individuals or entities that carry out KMS are required to report VAT payments, including individuals or entities that are taxable entrepreneurs (PKP) reporting VAT deposits in VAT Periodic Notification Letters (SPM) to the registered tax service office. Then, an individual or entity that is not a PKP is deemed to have reported VAT payments as long as they have made VAT payments.
There are new rules, here’s how to calculate personal taxes