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MII NEWS
Knowing About What is Export Tax
01 Nov 2021
By Satrio Ardia
What is Export Tax?
Export Tax is a tax that is levied on the export of goods and services from one country to another.
Exports can be broadly categorized into two types: exports of goods and exports of services. The taxes imposed on these types of exports differ significantly.
What are the Different Taxes You Can Face if You Export?
If you want to export, it's important to understand what taxes you may charge. Taxes vary from state to state and sometimes from state to state.
The following are the various taxes you may face if you export:
- Customs duty: This is a tax imposed by the government on goods entering or leaving the customs area. Customs values are usually used to calculate the cost of import duties, if the rates used are advalorum (percentage) rates.
- Value Added Tax (PPN): This type of tax is a levy imposed on the sale and purchase of goods and services carried out by individual taxpayers or corporate taxpayers who have become Taxable Entrepreneurs (PKP).
How do I Avoid Higher Costs?
In order to avoid higher costs, it is important that you keep yourself updated on the import duties. Take a look at the tariff schedule from the Ministry of Finance to ensure that you are not having to pay any additional taxes or tariffs after your shipment.
It is also important that you follow the right procedures when importing or exporting.
What are Other Ways to Calculate My Export Tax Burden?
There are numerous ways to calculate the export tax burden of a given company. This is because export tax burden is often calculated by multiplying the value of exports with the applicable percentage rate. Here are some other methods that can be used in calculating the export tax burden:
1) Export Value multiplied by Export Duty Rate plus Import Duty Rate
2) Export Value multiplied by Import Duty Rate plus Export Duty Rate
3) Value of Exports divided by Import Volume divided from a given Country
4) Number of Countries exported to divided by Average Sales per Country.