Q19. How do I check Indonesia’s import tariff rate?

Details about Indonesia's customs system are as follows.

Tariff classification method

Indonesia introduced the HS system in 1989, and the total number of items decreased from the previous approximately 5,000.

increased from dogs to 9,100 (based on HS 9 units). Indonesia's import tariffs are comprised of a multiple system of general tariffs and preferential tariffs (Common Effective Preferential Tariff) applied to ASEAN countries. Since 2006, Korea, China, Japan, etc.

With the conclusion of the FTA, three FTA tariff systems were added, including the China-ASEAN FTA (2006), the Korea-ASEAN FTA (2007), and the Japan-ASEAN FTA (2008).

The tax law that came into effect on March 1, 2017 changed the HS 10-unit system to the 8-unit system. As of 2022, the number of items searched with 8 HS codes is 11,522, an increase of 5.6% compared to 2017.

tariff rate

▶Rough system of tariff rates

The Indonesian government has been continuously promoting tariff reductions since 1985 as part of its trade liberalization policy. However, from safety and cultural/social perspectives, high import tariffs are still applied to some protected industries/products.

Q20. What taxes are levied when using consignment cargo such as courier service? Consignment goods are cargo that the customer has applied for transportation to the company. Consignment (barang kiriman) defined in Indonesian law is a legal term in the postal field.

These are goods sent through postal service operators in accordance with regulations, and include e-commerce goods, postal mail, couriers, parcels, etc. delivered through transaction methods other than e-commerce platforms.

The Indonesian Ministry of Finance announced on December 31, 2019, the Ministry of Finance Decree No. 199 of 2019 (No.199/PMK.010/2019), which is a revision of the Ministry of Finance Ordinance on consumption tax and internal tax on consignment cargo related to the lowering of the duty-free limit for consignment cargo. This has been implemented since January 30, 2020.

The law is regulated by the Ministry of Finance's Enforcement Regulations on the collection procedures for value-added tax and sales tax on imported luxury goods and exemption from import duties (No231/KMK.03/2001), and the Ministry of Finance Ordinance on the procedures for excise tax exemption (No34/PMK.04/2010). , This is a law amending the Ministry of Finance Ordinance (No34/PMK.010/2017) on prepaid corporate tax (PPh 22 tax) related to delivered goods, imports, and other business activities, etc., and the import of consignment cargo through the enactment of Ministry of Finance Ordinance No. 199 of 2019. to

The Ministry of Finance Decree (No182/PMK.04/2016) was withdrawn.

According to the Indonesian Customs Service, the reasons for drastically lowering the duty-free limit for consignment cargo are: first, the application of an equal tax system to domestic and international shipments; second, a rapid increase in the number of imported products through e-commerce; and third, the same tax system for online and offline distribution markets. Fourth, it is because it reflects the opinions of local companies. The main changes in the existing law through Ministry of Finance Ordinance No. 199 of 2019 are ① lowering the tariff exemption limit for consignment cargo from US$75 to US$3, ② non-collection of prepaid income tax on consignment cargo less than US$1,500 ( (excluding some items), ③ excluding preferential taxation for bags, clothing, and footwear, ④ adjusting the consumption tax exemption limit for cigarettes, etc.

The following import tax rates are applied not only to the consignment amount but also to specific items.

Import tax rate on consignment by condition

Source: No 199/PMK.010/2019, Embassy of the Republic of Korea in Indonesia (January 2020)

• Note: Due to non-collection of prepaid corporate tax (10%, NPWP 20% for consignment value exceeding $3 but less than $1,500), the integrated tax rate for consignment cargo is approximately 17.5% (tariff rate 7.5%) from the previous approximately 5% or 37.5%. , VAT reduced to 10%)

In addition to the above, we provide the following information for your reference regarding consignment cargo such as e-commerce goods.

How to Calculate Indonesian Import Tax Rate

• Taxable price (Nilai Pabean) calculation method -> CIF price (product price + international transportation cost + insurance cost)

• Import price (Nilai impor) calculation method -> Dutiable price + import tariff (BeaMasuk)
• Import tariff (Bea Masuk): Import tariff on consignment by condition
• Value Added Tax (PPN): Import price
• Prepaid corporate tax (PPh 22): Import price

* Tax exchange rates can be viewed every Wednesday on the Ministry of Finance website: https://fiskal.kemenkeu.go.id/dw-kurs-db.asp

** If an exception is applied according to the tax law at the general applicable tax rate (fixed rate), other tax rates such as tax exemption are applied.

Other notes regarding consignment regulations

Information on delivery, unloading, storage, etc. of consignment cargo

• Logistics business operators located in areas other than customs must submit a declaration in the form of a cargo list to the customs authorities. Afterwards, if unloading of the consignment listed on the cargo list is permitted, the reporter will receive a registration number.
• Consignments approved for disposal can be loaded into the Temporary Storage Area (TPS).

The process of releasing consignment from customs

• Imported consignments are stored in a temporary storage area (TPS) and are allowed to be released only after customs approval.
• Imported consignments are mainly exported from TPS for purposes such as personal use, temporary import, shipment to customers residing in Indonesia, storage in bonded warehouse, and re-export.
• In the case of consignment cargo for personal use, the consignment list in the form of a letter or document and the consignment cargo are taken out through customs by the shipping company.
• If the value of the consignment does not exceed $1,500, the consignment may be released by submitting the cargo waybill to customs authorities.
• If the value of the consignment exceeds $1,500 and the recipient is a corporation, if the consignment is subject to an extension of the import tax payment deadline and/or preferential tariffs, and in the case of temporary import, a PIB (Product Import Notice) must be submitted. .
• In the case of temporary import, the procedures specified in the Temporary Import Law must be followed, and in case of delivery to another customs area, the initial temporary storage area (TPS), the expected temporary storage area (TPS) of arrival, transport number, departure/arrival date, Number of packaging and types, products

Q21. Are taxes levied on exports to Indonesia?

Indonesia imposes export taxes on some products for reasons of protecting its resources and stabilizing prices in the domestic market. Export taxes are limited to leather, lumber, cocoa beans, palm oil, palm oil crude oil and its products, ores or raw materials, and export taxes range from 0 to 40% depending on the product. If you wish to export these products from Indonesia to another country, please check the HS code of the above items and check the tariff rate through the Indonesian Customs Manual (BTKI, BUKU TARIF KEPABEANAN INDONESIA).

If export tax is not listed in the customs manual, the product is free of export tax. There may be differences depending on the product, but in the case of CPO, lumber, etc., the export tax does not change on a monthly basis, but the export standard price changes. To calculate export tax, you must use the standard unit price. You can check the monthly unit price on the Korea Customs Service website below. It can also be viewed on the Ministry of Trade website.

For your information, there are often inquiries about whether it is possible to correct the license after export, but correction of the license after export is not possible. In cases where an additional difference occurs due to price adjustment after export, it is reported that the additional income is reported to the tax office based on related data and the relevant corporate tax is paid. Therefore, if the payment of income tax on the export price according to the export certificate and the payment of income tax on the additional difference are separately organized, it is believed that there will be no problem during future audits from the exporter's perspective. I hope to receive a confirmation from you.

Q22. What FTA treaties can be used in trade with Indonesia?

In accordance with the Korea-ASEAN FTA Agreement, a reciprocal tax rate system* was introduced for some items imported from ASEAN countries from September 10, 2008. In this regard, high tariff maintenance items may be subject to general tariffs. In some cases, the general tariff rate for some products, such as petrochemical products, is lower than the Korea-ASEAN FTA tariff rate. In this case, submission of proof of origin is not required. Please note that if you do not submit proof of origin, you will be charged normal tariff rates (MFN).

* Mutual correspondence tax rate

If the FTA partner country does not make tariff elimination concessions to protect its own industry and exports items (sensitive items) that maintain high tariffs to the other country, the importing country is subject to reciprocity even if the importing country has promised to eliminate tariffs in the FTA agreement. This refers to a system that does not eliminate tariffs or imposes tariffs at the level of the other country's tariff rate. Accordingly, among the items (sensitive items) on which ASEAN countries maintain high tariffs on goods imported from Korea for the purpose of protecting their own industries, etc., if the items in question are imported into Korea, our country may be subject to Instead of granting the FTA preferential tariff benefits promised to ASEAN in the agreement, the tariff rate (MFN tax rate) applied to countries that have not concluded an FTA is applied. However, if the tariff rate applied by an ASEAN country to goods imported from Korea is 10% or less, Korea also applies the same tariff rate as that of the ASEAN country to the same goods imported from ASEAN countries.

In the case of the Korea-ASEAN FTA, the certificate of origin must be issued at the time of export or immediately after shipment (within 3 working days from the date of shipment). Regarding the retroactive period, Korea-ASEAN

In the case of FTA, in the exceptional case where the C/O is not issued at the time of export or immediately after shipment (within 3 working days from the shipment date), it can be issued retroactively by writing “ISSUED RETROACTIVELY” within 1 year from the shipment date. .

Meanwhile, when the Korea-Indonesia CEPA goes into effect and is applied, “ISSUED RETROACTIVELY” must be entered within one year from the date of shipment in “exceptional cases where it is not issued before, at the time of shipment, or within 7 calendar days after the shipment date,” retroactively. Issuance is possible.

However, it is important to note that the standard for determining whether to issue a certificate retroactively from the date of shipment is “working days” in the Korea-ASEAN FTA and “calendar days” in the Korea-Indonesia CEPA.

If requested by the issuing authority of the exporting Party issuing the certificate of origin, the exporter applying for the issuance of the certificate of origin must submit all appropriate documents relating to the originating status of the product, including statements from the supplier or producer in accordance with domestic laws and regulations. Please note that this must be possible.

< Korea-ASEAN FTA vs. Comparison of Korea-Indonesia CEPA differences >

division	Korea-ASEAN FTA	Korea-Indonesia CEPA (draft)
Issuance method	Institutional issuance	Institutional issuance, later converted to autonomous issuance * Negotiation of regulations/forms for autonomous issuance within 2 years of effective date, effective date 10 Adopt autonomous issuance within one year
C/O method	Paper C/O	Both paper C/O and electronic C/O selection
Retroactive issuance period	If it is not issued at the time of export or immediately after shipment (within 3 working days from the date of shipment) * Including shipping date	If it is not issued before, at the time of, or within 7 calendar days from the date of shipment. * Including shipping date
third country	Third country	Fill in the Remark column
invoice	invoicing Check the box

PSR regulation method	Common regulations other than the HS code stipulated separately (CTH or RVC40)	PSR regulations by HS code
C/O PSR abbreviation	The standard for change in rate rather than change in number of 4 units is CTC, based on added value. Listed as RVC%	Listed as CC, CTH, CTSH for tax change standards, BD for deduction corporations among value-added standards, and BD for integrated corporations. Listed as BU
Post application	Absence of post-application regulations	Post-application mentioned in the agreement, domestically stipulated by law
Origin Cumulative	Products originating from other ASEAN countries can be used as origin materials.	As this is an independent agreement between Korea and Indonesia, goods originating from other ASEAN countries are considered originating materials. Unavailable

Q23. If the basic tax rate is lower than the FTA preferential tax rate, is there no need to use the FTA? In accordance with the Korea-ASEAN FTA Agreement, a reciprocal tax rate system* was introduced for some items imported from ASEAN countries from September 10, 2008. Related to this

In relation to this, items with high tariffs may be subject to general tariffs. In some cases, the general tariff rate for some products, such as petrochemical products, is lower than the Korea-ASEAN FTA tariff rate. In this case, submission of proof of origin is not required. Please note that if you do not submit proof of origin, you will be charged normal tariff rates (MFN).

Q24. How is the certificate of origin issued and when should it be submitted?

In the case of the Korea-ASEAN FTA, the certificate of origin must be issued at the time of export or immediately after shipment (within 3 working days from the date of shipment). Regarding the retroactive period, in the case of the Korea-ASEAN FTA, “ISSUED RETROAC TIVELY” must be written within 1 year from the date of shipment in “exceptional cases where the C/O is not issued at the time of export or immediately after shipment (within 3 working days from the date of shipment); Retroactive issuance is possible.

Meanwhile, when the Korea-Indonesia CEPA goes into effect and is applied, “ISSUED RETROACTIVELY” must be entered “in exceptional cases where it is not issued before or at the time of shipment, or within 7 calendar days after the shipment date” and “ISSUED RETROACTIVELY” within 1 year from the shipment date. Issuance is now possible.

However, it is important to note that the standard for determining whether to issue retroactively from the date of shipment is “working days” in the Korea-ASEAN FTA and “calendar days” in the Korea-Indonesia CEPA.

If requested by the issuing authority of the exporting Party issuing the certificate of origin, the exporter applying for the issuance of the certificate of origin must submit all appropriate documentation relating to the originating status of the product, including statements from the supplier or producer in accordance with domestic laws and regulations. Please note that this must be possible.

< Korea-ASEAN FTA vs. Comparison of Korea-Indonesia CEPA differences >

division	Korea-ASEAN FTA	Korea-Indonesia CEPA (draft)
Issuance method	Institutional issuance	Institutional issuance, later converted to autonomous issuance * Negotiation of regulations/forms for autonomous issuance within 2 years of effect, effective date Adopt autonomous issuance within 10 years
C/O method	Paper C/O	Both paper C/O and electronic C/O selection

Retroactive issuance period	Not issued at the time of export or immediately after shipment (within 3 working days from the date of shipment) *Includes shipping date	If not issued before, at the time of, or within 7 calendar days from the shipment date * Including the shipment date
third country invoice	Third country invoicing Check the box	Fill in the Remark column
PSR Rule method	Common regulations other than the HS code stipulated separately (CTH or RVC40)	PSR regulations by HS code
C/O PSR abbreviation	Instead of a 4-unit rate change, the standard for rate change is CTC, and the added value standard is RVC%. write	Based on the change in tax number, write CC, CTH, and CTSH. Among the value-added standards, write BD for mutual aid corporations and BU for integrated corporations.
after death apply	Absence of post-application regulations	Post-application mentioned in the agreement, domestic law stipulated to be set as
Origin Cumulative	Products originating from other ASEAN countries can be used as originating materials.	As this is an independent agreement between Korea and Indonesia, goods originating from other ASEAN countries are considered originating materials. Unavailable

Q25. Are tariffs exempted if raw materials are imported for export purposes? So what are the methods and procedures?

When raw materials are imported for export purposes, import tariff exemption and VAT deferral (or refund) are provided. This is called the KITE system. You can proceed with exemption from import tariffs and VAT deferral (bank guarantee or custom bond deposit) before import customs clearance, or you can receive a refund after paying import duties and value-added tax at the time of import customs clearance, but it must be done at a KITE-approved corporation. This applies, and companies that have not received KITE approval cannot receive a refund of customs duties paid.

The import process using the KITE system is as follows.

Additionally, imported cargo must be exported within one year from the import declaration date. The documents required when recovering collateral are as follows:

When cargo is imported from overseas and exported overseas under the KITE system

• PIB Copy (copy of import declaration)
• Income Invoice Packing List Copy
• Original SSPCP (import tax payment receipt)
• Original copy of SPPB (Cargo Customs Clearance Approval Certificate) with customs officer’s confirmation signature
• LPBC/LHP (inspection order and inspection report)
• PEB Copy (Export Declaration Copy)
• Original B/L or AWB
• Export Invoice, Packing List Copy

When raw materials are imported from a domestic bonded corporation and exported overseas

• 5 Copy
• Income Invoice, Packing List Copy
• Original SSPCP (import tax payment receipt)
• SPPB-KB Copy with customs officer's confirmation signature
• Purchase Order
• LPBC/LHP (inspection order and inspection report)
• PEB Copy (Export Declaration Copy)
• Original B/L or AWB
• Export Invoice, Packing List Copy

When raw materials imported from overseas are processed and exported to a domestic bonded corporation

• PIB Copy (copy of import declaration)
• Income Invoice, Packing List Copy
• Original SSPCP (import tax payment receipt)
• Original copy of SPPB (Cargo Clearance Approval Certificate) with customs officer confirmation signature
• 4 original
• Original Sales Contract
• Invoice Copy
• Purchase Order

After preparing the documents in accordance with the above, submit them to the jurisdiction/local customs office and receive a receipt. Afterwards, the jurisdiction/regional customs office will review the refund, and if approved, the customs office will issue SKPFP and SPMK and collect the collateral after approval.

Items excluded from tax exemption and refund are as follows:

• Cost of by-products, waste, and scrap that are not exported
• Import duties on consumables such as lubricants and fuels and factory equipment
• Fines imposed for violating import regulations

Q26. What is the definition of the reciprocal tax rate system and when is it used? The reciprocal tariff rate system refers to cases where an FTA partner country exports items (sensitive items) that maintain high tariffs to the other country without granting tariff elimination concessions to protect its own industry.

This refers to a system in which the importing country may not eliminate tariffs based on reciprocity or may impose tariffs at the level of the other country's tariff rate, even if the importing country has promised to eliminate tariffs in the FTA agreement.

If this system is implemented, ASEAN countries maintain high tariffs on goods imported from Korea for the purpose of protecting their own industries (sensitive items), and if these items are imported into Korea, there will be concerns about future damage to the domestic industry. For these items, the tariff rate (MFN rate) applicable to countries that have not concluded an FTA will be applied.

For example, currently, Indonesia, Malaysia, the Philippines, and Vietnam classify passenger cars exported by Korea as 'sensitive items' and do not grant them preferential FTA tariff benefits. Therefore, if these four countries export passenger cars to Korea, Korea will apply the MFN tariff rate of 8% rather than the FTA preferential tariff rate of 0% to passenger cars imported from the four countries.

However, if the tariff rate applied by an ASEAN country to goods imported from Korea is 10% or less, Korea also applies the same tariff rate as that of the ASEAN country to the same goods imported from the ASEAN country. For example, Malaysia does not grant FTA preferential tariff benefits to motorcycles exported by Korea, so Korea must also apply the MFN tariff rate of 8% rather than the FTA preferential tariff rate of 3%. However, since Malaysia's tariff rate is 5%, we also have to apply MFN tariff rate of 5%. % tariff rate will be applied.

The mutual response tax rate system is intended to prevent the possibility of damage to the domestic industry that may occur if the import of goods to which the mutual response tax rate is applied rapidly increases due to ASEAN's early tariff reduction, and ASEAN's early reduction of tariffs on Korea's export products. It can be said that it is being introduced for the purpose of increasing the effect of FTA.