The VAT treatment of the supply of taxable goods that are used as collateral was not clearly regulated until the issuance of Government Regulation Number 44 (PP-44) on 2 December 2022. Under PP-44, when a taxable good held as a collateral is sold by the creditor, the transaction will be subject to VAT. Minister of Finance Regulation Number 41 of 2023 (PMK-41) issued on 13 April 2023 provides further guidance on the imposition, settlement, and reporting of VAT arising from these transactions. PMK-41 comes into effect as from 1 May 2023.
Source: taxathand.com
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