Room rental services including renting of goods in kind services for the delivery of motion not subject to VAT, except rental room in the hotel business is not subject to Value Added Tax.
Services in the field of hospitality which are not subject to Value Added Tax include:
- Rental services including enhancements in the hotel rooms, lodging houses, motels, guesthouses, hostels, and facilities associated with the activities of hospitality for guests staying;
- Rental space for events on the event or meeting in a hotel, inn, motel, inn and hostel room rental services for the delivery of Value Added Tax imposed in addition to services in the fields of hospitality, among others:
a. For office space rental services;
b. Room rental services to business premises or shops;
c. Room rental services in residential, apartments, flats;
d. Rental space for meetings (convention hall);
e. And other similar rental space.
Necessity for Entrepreneurs By Room Rental Service
Room Rental Service in addition to businessmen in the field of hospitality for one year the delivery room rental service with a gross turnover of more than Rp. 600,000,000.00 (six hundred million rupiahs), shall:
- Sign up at your local tax office to be confirmed as Taxable Person;
- Collect, deposit and report value added tax payable.
Calculating VAT on Room Rental Services
VAT payable on the room rental rate is calculated by multiplying the VAT tax bases. VAT Rate = 10% Basic Tax on room rental are as follows:
a. Tax basis is the amount of space rental reimbursement or compensation or rental value of an empty room or should be requested by the taxpayers who rented the room, not including service charge. VAT payable is: 10% x Total Rental Value
b. Imposition of Tax Basis of service charge is:
- Replacement of the invoice amount
- Total service charge requested by Taxable Person who rented the room. Service charge, which is a reward for services which led to a rented room can be occupied in accordance with the objectives desired by the tenant. Service charge may consist of the cost of electricity, water, security, cleanliness, and administrative costs. VAT payable is 10% x Total Service Charge.