What is PPnBM for Cars? This is the Legal Basis and Its Rates for 2025

The luxury tax on cars is currently a hot topic among the public. This is because it affects the purchase price of cars. So what does this term mean? For more details, please pay attention to the following review.

What is the Luxury Tax on Cars?

The luxury tax on cars is an acronym for Luxury Goods Sales Tax specifically for car purchases. In fact, the luxury goods sales tax policy is not only intended for car purchases. The luxury tax policy applies to all other types of luxury goods such as branded bags from well-known brands, luxury residences, to yachts.

Legal Basis for the Luxury Tax on Cars

The luxury tax on cars is also one of the policies that did not emerge suddenly. This policy actually has had a legal basis for a long time. The legal basis for the luxury tax refers to Law Number 8 of 1983 concerning VAT (Value Added Tax) and Luxury Goods Sales Tax (PPnBM).

In addition to that law, the legal basis for the luxury tax on cars also refers to other regulations such as Law No. 42 of 2009 concerning Value Added Tax on Goods and Services and Luxury Goods Sales Tax, Government Regulation No. 41 of 2013 concerning Taxable Goods Group classified as Motor Vehicles subject to Luxury Goods Sales Tax, PMK/PMK.010/2017, Government Regulation No. 22 of 2014, Government Regulation No. 74 of 2021, Minister of Finance Regulation No. 141/PMK.010/2021, and Minister of Finance Regulation No. 131 of 2024.

Luxury Tax Rates on Cars 2025

For the luxury tax rate on cars in 2025, it is actually still the same as the previous luxury tax rate which still refers to Government Regulation No. 22 of 2014. The complete rates are as follows.

1. 10% Rate

For the 10% luxury tax rate on cars, it is imposed on motor vehicles in the following categories.

Motor vehicles used to transport 1 to 15 people including the driver.
Motor vehicles with diesel or semi-diesel engines for all cylinder capacities.
Motor vehicles used to transport less than 10 passengers including the driver, other than station wagons or sedans with diesel or semi-diesel engines.
Motor vehicles with a single 4x2 drive axle with a capacity of 1500 cc.

2. 20% Rate

For the 20% luxury tax rate on cars, it is imposed on motor vehicles in the following categories.

Motor vehicles used to transport less than 10 passengers including the driver.
Vehicles other than station wagons or sedans with diesel or semi-diesel engines equipped with a single drive axle system (4x2) with cylinder capacities exceeding 1,500 cc up to 2,500 cc.
Cars with double cabins in the form of open cargo vehicles.

3. 30% Rate

For the 30% luxury tax rate on cars, it is imposed on motor vehicles in the following categories.

Motor vehicles used to transport less than 10 passengers including the driver.
Vehicles other than station wagons or sedans with diesel or semi-diesel engines equipped with a single drive axle system (4x4) with a cylinder capacity of 1,500 cc.

In addition to the three rates above, there are also rates of 40%, 50%, 60%, and 125%. For more detailed rate information, you can read Government Regulation No. 22 of 2014.

In addition to the luxury tax rates as explained above, car purchases in 2025 will also be subject to tax according to the latest VAT regulations, namely 12%.

Thus, the review of the latest luxury tax on cars in 2025. Hopefully, the above review is beneficial.