Tax on Solar Panels

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  • adrian_lux
    Member
    • Apr 2024
    • 12

    Tax on Solar Panels

    IMO : The only viable solar technology are the latest versions direct from China - bifacial HST (Heterojunction solar cells). 23% efficiency. 25 year guarantee.

    Does anyone have knowledge on sales tax, import tax and duty on these items?

    As a pensioner, income tax rebate I don't care about.
    ?
  • marcus
    Member
    • Jul 2008
    • 9239

    #2
    Originally posted by adrian_lux View Post
    ...Does anyone have knowledge on sales tax, import tax and duty on these items?...

    From https://atonergi.com/pajak-panel-surya-di-indonesia/ (consultation , design ,..)
    Title : Solar Panel Tax in Indonesia (no date , certainly before April 2022)


    1. Value Added Tax (VAT) : 10% (11% now , 12% in Jan 2025 , from poster)
    Tax is imposed on every sale and purchase transaction of goods or services in Indonesia...

    2. Sales Tax on Luxury Goods (PPnBM)
    This tax is imposed on the sale of luxury goods such as cars, yachts or airplanes. Solar panels are also included in the luxury goods category and are subject to PPnBM of 10%.

    3. Income Tax (PPh)
    This tax is imposed on solar panel owners who use the solar panels to produce electricity for personal or business purposes.

    To calculate income tax, you need to calculate the income earned from solar panels. After knowing the income earned, you can use the PPh formula.
    For use of solar panels for personal purposes: PPh = (Income – Tax Deduction) x PPh Rate
    For the use of solar panels for business purposes: PPh = (Income – Operational Costs – Tax Deduction) x PPh Rate
    Tax deductions for PPh include installation costs, and maintenance costs. However, keep in mind that the amount of tax deduction that can be used depends on government policy that can change at any time.


    ------------------------------------------------------


    Ask Customs : https://mail.customs.go.id/

    https://indonesian.alibaba.com/g/imp...rom-china.html (buy solar panels)

    https://www.basenton.com/id/guide-to...ls-from-china/ (import guide from Chinese manufacturer)

    https://www.beacukai.go.id/layanan-publik.html (customs import services)

    Comment

    • adrian_lux
      Member
      • Apr 2024
      • 12

      #3
      Thank you Marcus. So Sales tax 11 %, Import Duty 7.5%.

      Energy is considered a luxury in Indonesia and subject to 10% tax. Wow! Total approx. 30%.

      The part about income tax is not relevant to me since I will not sell electricity to the grid. I read a while back that whatever your PLN rating, for example 2.2 kW, you cannot install solar exceeding this rating. Is this for technical reasons or because they do not want competition for PLN? Since I intend to exceed I cannot sell back to the grid.

      It says here that tax is abated, but what is the legal definition of a "project".

      Given that most countries are on the "Zero carbon" bandwagon I was expecting some sort of tax incentives for solar, as is implemented by most/all such countries. Yet, not in Indonesia.

      Given the atrocious position of straddling the equator with ideal solar conditions but bottom of the class for solar energy in ASEAN I expected some sort of remedial action. Apparently not in the way of tax abatement.

      I also saw articles about the Indonesian government investing gazillions of taxpayer money to create a local solar manufacturer industry. I wonder what the logic there is? This would have to be high tech, research and development, large scale manufacturing based; going up against China. Is that likely?

      As I have seen in other cases, personally importing latest product here is a risky and costly affair. Too bad.

      Comment

      • marcus
        Member
        • Jul 2008
        • 9239

        #4
        From https://setkab.go.id/pemerintah-terb...idak-dibatasi/
        Title : Government Issues Latest Rules for Rooftop PLTS, Installation Capacity is Not Limited , March 2024

        The government through the Ministry of Energy and Mineral Resources (ESDM) issued Minister of Energy and Mineral Resources Regulation Number 2 of 2024 concerning Rooftop Solar Power Plants Connected to the Electric Power Network Holders of Business Permits for Providing Electricity for Public Use (IUPLTU) which will come into effect on 31 January 2024 .

        Acting Director General of New, Renewable Energy and Energy Conservation (Dirjen EBTKE), Ministry of Energy and Mineral Resources, Jisman P Hutajulu said the issuance of this regulation was a response to developing dynamics and efforts to accelerate the increase in the implementation of Rooftop Solar Power Plants (PLTS). The issuance of this regulation is also an effort to improve and replace the Minister of Energy and Mineral Resources Regulation Number 26 of 2021 regarding Rooftop PLTS.

        "The government views that the implementation of the PLTS Rooftop regulations has not yet reached its optimal potential, but we are confident that this challenge can be overcome with hard work, innovation and collaboration of all stakeholders, including government, academics, business entities, media and society, one of the results of which is the issuance of this regulation. ," said Jisman at the Socialization of Minister of Energy and Mineral Resources Regulation Number 2 of 2024, Tuesday (05/03/2024), in Jakarta.

        Jisman said, with a target of 1 gigawatt (GW) of rooftop PLTS connected to the PLN network and 0.5 GW from non-PLN every year, assuming the capacity of 1 solar module is 450 wattpeak (Wp), the production of around 3.3 million solar panels is needed. .

        "Rooftop PLTS has an intermittent nature so the development of Rooftop PLTS must be calculated carefully by paying attention to system reliability, so it is necessary to set a quota for PLTS entering a system every year," said Jisman who is also the Director General of Electricity, Ministry of Energy and Mineral Resources.

        Jisman said that on the upstream side, Indonesia has silica sand resources that can be utilized for the solar cell industry. Therefore, the Rooftop PLTS program is expected to encourage the growth of the solar module industry in Indonesia and support the planned development of the upstream solar cell industry in Central Java, Batam Island and Rempang Island.

        Meanwhile, the Director of Aneka EBT, Ministry of Energy and Mineral Resources, Andriah Feby Misna asked IUPTLU holders, both PLN and non-PLN business areas to follow up on this regulation by proposing a quota for Rooftop PLTS systems for five years to the Director General of Electricity, Ministry of Energy and Mineral Resources to then evaluate and set.

        "We have discussed the quota for the Rooftop PLTS system with PT PLN as the largest IUPTLU holder and have obtained an indication of the quota for the Rooftop PLTS system which can be developed until 2028. This quota will be proposed by PT PLN to the Ministry of Energy and Mineral Resources to then be determined and reduced to a clustering quota, ” explained Feby.

        Through Minister of Energy and Mineral Resources Regulation Number 2/2024, the government has made several regulatory improvements which generally aim at efficiency and transparency as well as increasing public interest in installing Rooftop PLTS. The main rules contained in this regulation include:

        – Rooftop PLTS installation capacity is not limited to 100 percent of PLN's installed power but is based on PLN quota availability.
        – Rooftop PLTS system capacity quota in clustering (at PLN UP3 level) published by PLN via PLN's official website, application and/or social media. This quota is determined by the Director General of Electricity every five years.
        – Elimination of the import-export mechanism. The value of excess electrical energy from the customer's rooftop PLTS system to the IUPTLU holder's network is not taken into account in determining the amount of the customer's electricity bill.
        – Elimination of capacity fees for all types of PLN customers.
        – Arrangement and simplification of the application time for PLTS Rooftop installation by PLN customers and the application is served by PLN based on the first in first serve (FIFS) mechanism.
        – The cost of procuring advanced meters as a replacement for import-export kWh meters is borne by the IUPTLU holder.
        – Application-based service mechanism for easy submission of applications, reporting and monitoring of the Rooftop PLTS program.
        – Availability of a Rooftop PLTS Complaint Center to receive complaints from Rooftop PLTS customers or IUPTLU holders.

        Comment

        • marcus
          Member
          • Jul 2008
          • 9239

          #5
          Originally posted by adrian_lux View Post
          (1) Energy is considered a luxury in Indonesia and subject to 10% tax. Wow ! ...

          (2) Given that most countries are on the "Zero carbon" bandwagon I was expecting some sort of tax incentives for solar, as is implemented by most/all such countries. Yet, not in Indonesia.

          (3) I also saw articles about the Indonesian government investing gazillions of taxpayer money to create a local solar manufacturer industry. I wonder what the logic there is? This would have to be high tech, research and development, large scale manufacturing based; going up against China. Is that likely? ...

          (1) Not energy , but solar panels .
          I did read an article that there are people thinking that installation of solar panels are mostly done by a minority who can afford .

          (2) There were some subsidies in 2022 in addition to the ability to sell the surplus to the Government's electric grid . But there are people thinking subsidies should be used in other areas . I think it makes sense for a country like Indonesia . In my country there were some economic studies showing that it is economically beneficial to install solar panel (it was a good kind of investment) .

          (3) I guess even China is moving some of its production to other countries , so I guess Indonesia wants some share of that .


          Comment

          • Nathan51
            Member
            • Oct 2012
            • 12

            #6
            Are imports of solar panels and inverters exempt from import duty and Sales arax in Batam?

            Comment

            • marcus
              Member
              • Jul 2008
              • 9239

              #7
              Originally posted by Nathan51 View Post
              Are imports of solar panels and inverters exempt from import duty and Sales tax in Batam?

              From https://news.ddtc.co.id/barang-di-ba...faktanya-45325
              Title : Are goods in Batam cheaper because they are tax free? It turns out this is the fact
              By Nora Galuh Candra Asmarani , Editor : Sapto Andika Candra , January 2023

              ...Cheaper prices for goods in Batam are indeed the effect of Batam's designation as a free trade area and free port (KPBPB)...usually better known as a free zone (Free Trade Zone/FTZ).

              "KPBPB is an area...of Indonesia which is separated from the customs area so that it is free from the imposition of import duties, VAT, PPnBM and excise,"

              The designation of Batam as a free zone means that goods sent from abroad to Batam are exempt from taxes and import duties. However, the tax and import duty exemption only if the goods stay in Batam.
              For this reason, if the goods are sent or released from Batam to other regions in Indonesia, they will be treated as imported goods. Thus, these goods will be taxed in accordance with applicable regulations.
              “Taxable goods (BKP) that are released from the Free Zone to other places within the Customs Area are subject to VAT. "In the event that the BKP is a BKP that is classified as luxury, the expenditure of the BKP in question is subject to VAT and PPnBM," states Article 2 paragraphs (1) and (2) PMK 62/2012...

              Comment

              • Nathan51
                Member
                • Oct 2012
                • 12

                #8
                Thanks for the clarification.

                Comment

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