VAT on Cavalry Horses Borne by the Government

Minister of Finance Sri Mulyani has stipulated that the Value Added Tax (VAT) on the transfer of cavalry horses will be borne by the government. This provision is regulated under the Minister of Finance Regulation (PMK) Number 61 of 2025.

Specifically, it is stated that the items eligible for VAT borne by the government include cavalry battalion horses and 43 other related equipment items. This facility is effective from the enactment of the regulation, i.e., from September 1 to December 31, 2025.

The government explained that the VAT-borne facility for cavalry horses and their equipment is provided to support the readiness of certain special animal defense equipment.

Accordingly, this facility applies to horses and their equipment delivered by VAT-Registered Persons (PKP) to the Ministry of Defense and/or the Indonesian National Armed Forces (TNI).

Provisions on Tax Invoices

For the use of this facility, PKP who transfer cavalry horses or their equipment to the Ministry of Defense (Kemenhan) or the Indonesian National Armed Forces (TNI) are required to issue a tax invoice and a report on the realization of VAT borne by the government.

The tax invoice issued must include the statement: “VAT borne by the government based on PMK Number 61 of 2025” in the tax invoice creation module.

If the module does not yet provide such an option, PKP may include the statement in the reference column of the tax invoice. Furthermore, the tax invoice that has been issued must be reported in the Periodic VAT Return (SPT Masa PPN) by the PKP making the transfer.

Exceptions to the VAT-Borne Facility

This VAT-borne facility does not apply if:

• The object transferred is not cavalry horses or their equipment as specified in the annex of the regulation.
• The VAT payable falls outside the stipulated period, namely September 1–December 31, 2025.
• The PKP does not issue an invoice or fails to submit the realization report.
• The tax invoice issued does not include the statement: “VAT borne by the government based on PMK Number 61 of 2025” in the tax invoice creation module.

Since the VAT is borne by the government, the payable VAT on the transfer of cavalry horses and their equipment will be charged to the State Budget (APBN) for Fiscal Year 2025. (ASP/KEN)