Latest Tax Regulation: Buyers Can Request Refund for Excess 12% VAT
In a recent development, the government has made a significant decision regarding value-added tax (VAT) regulations. It has been decided that the 12% VAT will only apply to luxury goods and services. For items outside this luxury category that were previously subject to an 11% VAT, there will be no increase in the tax rate.
Policy Details and Implications
Under the new policy issued by the Directorate General of Taxes (DJP) to address cases of incorrect tax rate collection, individuals who have already been charged a 12% VAT by the seller can request a refund for the excess payment. This new regulation is outlined in Director General of Taxes Regulation Number PER-01/PJ/2025, which is an implementation of Ministry of Finance Regulation Number 131 of 2024.
Referring to Chapter II Article 4 on Tax Invoice Provisions during the Transition Period, if there is an excess collection of VAT amounting to 1% (originally 11% but mistakenly collected at 12%), the following provisions will apply:
– Buyers can request a refund for the 1% excess VAT from the seller.
– Upon request for VAT refund, the selling Taxable Entrepreneur (PKP) must issue a replacement Tax Invoice.
Reassurance from Tax Authorities
Director General of Taxes, Suryo Utomo, has assured taxpayers regarding the refund of excess tax payments. He emphasized the importance of handling the transition smoothly by ensuring that any overcharged amounts are returned promptly. Suryo stated, “This is how we are organizing the transition. If there is an overcharge, it will be refunded. There are various ways to do this, such as directly returning the amount to the individual or correcting the tax invoice.”
This new regulation aims to provide clarity and fairness in tax collection processes, ensuring that individuals are not unfairly burdened with excess tax payments. It also reflects the government’s commitment to transparency and accountability in tax administration.
