Question

PT Amcol Metal is a company that makes household appliances made of aluminum and fiber. The company has just appointed Afifa to become a staff in charge of taxation. As a new staff member, Afifa was asked to carry out VAT tax administration, where the Company has the following policies:

1. During this time, the Company bought goods from non-PKP suppliers. This is done because the price is cheaper.

2. The Purchasing Department does not have administrative staff, and tax invoices are often lost. To handle this incident, the Company will usually ask the intermediary company to provide tax invoices and the evidence so that all input VAT can be credited.

3. For sales transactions, Afifa is asked to separate sales that have been paid and sales that have not been paid. If it has been paid, the tax invoice will be reported as output VAT. However, if it has not been paid, the output VAT will not be reported first. This is done in accordance with Company policy to maintain cash flow for operational activities.

Question:

If you are Afifa, provide your answers to the following questions regarding each of the Company's policies in the above case:

a. Explain the possible risks faced by the Company regarding the policies in point (1) in the above case! Explain your answer based on the rules in force! (3%)

b. Based on the conditions in item (2) in the above case, give your opinion about the Company's tax management! Also give your opinion about purchasing a tax invoice from an intermediary company! (6%)

c. Explain whether the policy in item (3) in the above case is in accordance with applicable regulations! Also explain the possible risks faced by the Company with the policy! (6%)

Answer 1

(a) The company decided to purchase goods from non-pkp suppliers as they were providing goods comparatively at lower cost. In other words, these are the companies which are not branded and dosn't have any value in market. They simply sell goods and take money. Their officials will not provide support for any querry related to tax administration

(b) Frist of all company has to take care of their officials and should recrut as per requirement. Not having adminstrative staff in purchasing department is big problem and loosing all tax invoices is another big issue. Because without tax invoice, input VAT cannot be credited. So the company has to ask duplicated tax invoices from the intermediarry company.

(c) In case of sales transactions, all applicable tax which is collected has to be paid to regulators timely and reporting of same has to be done timely. If not done, there will be penaly clause from concerned regulatory.