Part 4: Technical Guidelines on The Imported Goods For Use
By : Riza Buditomo, Muhammad Ramzi, Rinaldi Raymond
PART 4: TECHNICAL GUIDELINES ON THE IMPORTED GOODS FOR USE
In relation to declaring import declaration form (Pemberitahuan Impor Barang “PIB”) of intangible goods being imported into Indonesia, in 2022, the Indonesian Minister of Finance (MOF) issued MOF Regulation No. 190 of 2022 on imported goods for use ("MOF Reg 190"). One of the notable highlights of MOF Regulation 190 is the new import declaration procedure for use and intangible goods (e.g., digital goods).
However, as it is necessary to rearrange the technical guidelines for the implementation of the clearance of imported goods for use, the Directorate General Customs and Excise (Customs) issued implementing regulation on the imported goods for use, i.e., Customs Regulation No. 2 of 2023 on the Technical Guidelines of the Imported Goods for use ("Customs Reg 2").
Customs Reg 2 specifies that PIB for software should at least contain the following information:
- Details of the customs office at the importer's domicile
- Type of PIB
- Type of importation done by the importer
- Type of payment
- Data on the sender
- Data of the importer or its customs broker (PPJK), if the importer authorizes the PPJK to carry out customs arrangements
- Data on the transaction
- Data on the currency
- Data on the basic value for calculating import duty(NDPBM)
- Data on Free on Board (FOB)
- Data on the value of Cost, Insurance and Freight (CIF)
- Import duty rates (post-tariff) and explanation of the classification of goods
- Country of origin
- Types of payable levies, i.e., import duty, value-addedtax, income tax and/or sales tax on luxury goods
II. Key Issue
This regulation specifies the import declaration formality and compliance to declare the imported goods for use in the form of intangible goods, e.g., software for server products or other digital goods, which include software and digital goods that are transmitted electronically, as discussed below. However, the regulation still gives riseto some questions about certain types of software that are subject to import duty and taxes. Formality of PIB for import on intangible goods: In essence, Customs Reg 2
re-emphasizes the PIB formalities and customs obligations. To force the importers to comply with the formality of PIB and fulfil its Customs obligation.
We set out below the key takeaways of the new implementing regulation of the imported goods for use, specifically on the implications of the import of software:
- The general rule that a PIB must be submitted before the transfer of goods does not apply for imported intangible goods. In this case, intangible goods should be declared within 30 days after the payment date of the purchase transaction, not after the transmission itself. Customs Reg 2 also emphasizes some details e.g., the specific information should be contained in PIB.
- PIB of the intangible/digital goods, e.g., software,goods should be separated from the physical goods or devices: the PIB of the intangible goods should consist of intangible goods only and must be declared with HS Code, heading 9901.
- Customs verification on the formality of PIB: Computer Services System (SKP) or Customs officials may verify the status of importer or customs broker, and its formality in PIB’s fulfilment includes the following data elements:
Verification results status
If the importers and PPJK are blocked or if the PIB is in appropriate; meaning that whether the importer and customs broker status are suspended and could not be able to perform any customs activity. Thus, SKP or Customs and Excise officials will issue a Notification of Rejection (NPP).
If the importers or PPJK are not blocked, and the PIB is filled incorrectly, the SKP or the Customs and Excise Official will issue a Registration Number (Nopen).
PIB for intangible imported goods that have obtained a Registration Number is deemed to have completed fulfilment of its Customs obligations. The Customs Office gives the Nopen to indicate that PIB has fulfilled the formal requirements.
III. Impact on the Importers
- More emphasis on the formality of PIB for imported intangible goods. Customs Reg 2 re-emphasizes the PIB formalities and its customs obligations. To force the importers to comply with the formality of PIB and fulfil its Customs obligation. For instance, Customs Reg 2 emphasizes compliance in implementing import declaration of intangible goods being imported into Indonesia that are transferred through electronic transmission, i.e., intangible goods such as software or other digital goods. Those goods should be declared in a PIB that consists of certain elements, including the sender's data, the importer, or the customs broker (PPJK), the invoice, data on the transaction, and the country of origin.
- The PIB of the intangible goods must consist of intangible goods only, which are separated from the physical goods or devices. This means the Government wants to add import taxes on the intangible imported goods as state revenue.
- More clarity on Customs verification on the formality of PIB. To prove the PIB, customs officials may verify the status of the importer or customs broker, whether suspended or not, and its formality in PIB’s fulfilment and customs obligation. Subsequently, they will issue the verification result status whether the PIB is rejected (NPP) or PIB is approved (Nopen).
- The importers must ensure compliance with PIB’s formality and fulfil its customs obligation to smooth the importation process.