AN ANALYSIS ON THE DISPUTE OF VALUE-ADDED TAX ON THE SALE OF COLLATERAL TAKEN OVER BY FINANCIAL SERVICE COMPANY

Abstract

This research analyzes the dispute of Value-Added Tax on the sale of collateral taken over by Financial Service Taxpayer, because Covid-19 pandemic increases non-performing loan and potentially increases the similar cases. The method employed was doctrinal research, law materials studied were statutes, court’s verdict, and legal literature, using purposive sampling, analyzed using polyangulation method, where the result is narrated descriptively. The finding of research is that taxpayers argue that the sale of taken-over collateral is exempted from Value-Added Tax because it is a part of financial service business, while tax authorities argues that it is not a part of banking service, and thereby should be imposed with Value-Added Tax. Chamber of Judges of Tax Court interprets systematically the Banking Law to comprehend the definition of banking service, and argues that the Sale of taken-over collateral is a part of banking service business and thereby is exempted from Value-Added Tax imposition. This argument is confirmed by Supreme Judge. Covid-19 pandemic increases non-performing loan and thereby potentially increases the sale of Collateral Taken Over by banking, tax authorities should make Judicial Review verdict over the dispute of the Sale of Taken-Over Collateral the formal legal source, thereby not impose Value-Added Tax over the Sale of Sale of Taken-Over Collateral to prevent the tax dispute, that will finally be canceled by both Chamber of Judges of Tax Court and Supreme Judges.