Event Reports

The Intellectual Property Working Group held its regular meeting on 15 August 2019. This time, the Group discussed on two priority topics of the industry. The first topic discussed was the deadline for submission of request to delay requirement under Article 20 of Patent Law to locally manufactured registered patent. According to the Law, non-compliance to this requirement is punishable by revocation of the registered patent. The Directorate General of Intellectual Property (DG IP) has issued a policy to allow patent holders to delay the locally manufactured requirement, provided that the application is submitted before the following deadlines:

1 . For patents granted under the current 2016 Patent Law, the deadline is within 3 years from grant; and

2. For patents granted under the old Patent Law (before 26 August 2016), the deadline is within 3 years from passing of the new Patent Law on 26 August 2016 – which means 25 August 2019.

The second and last topic of discussion was about the Government’s plan to revise the Patent Law. In this regard, it is under the government’s opinion that some provisions are no longer suitable and need to be improved by considering compliance with international conventions and agreements, as well as the need to attract more innovations and investments to the country. This meeting further discussed the stipulations that are proposed by the DG IP to be revised, including regarding locally produced obligation in Article 20, Compulsory License in Article 82, and Implementation of Patent by the Government under Article 109. At the end of the meeting, the group agreed as requested by the DG IP to submit inputs regarding these provisions to be considered by the DG IP in developing the academic papers that will be used for the drafting the actual revision to the Patent Law.

The Transport and Logistics Working Group met on 12 August 2019 to specifically discuss taxation issues for the logistics sector. This meeting is chaired by Mr. Sugyanto Halim, CFO of DB Schenker, as the Deputy Head of the Transport and Logistics Working Group. The first agenda is regarding proposals by EuroCham to revise policy on implementation of VAT and withholding tax in freight forwarding services. These proposals have been developed by the industry since 2015 and well communicated to the relevant government ministries/agencies. In regard to withholding tax proposals, there have not been significant development in terms of policy framework however the Directorate General of Tax is developing the electronic tax slip (e-bukti potong) program to help reduce the administrative burden.

Responding to the proposal on VAT, the Ministry of Finance recently issued Regulation No. 32/2019 that offers zero percent VAT for freight forwarding service on export-oriented goods (and not including the import side). The group overall welcome the latest zero percent VAT incentives, however there are still remining challenges to become eligible to enjoy the zero percent rate. To be eligible for the zero percent rate, companies need to provide written agreement of each international transactions, as well as provide proof of payment from the recipient of exported taxable services abroad which can be difficult due to most multinational forwarding companies implement a netting mechanism with their affiliated counterparts abroad.

Lastly the group also shared latest updates on proposals to reduce administrative burden due to duplication of tax and commercial invoices. Reportedly, even when a company is already directly exchanging data using a special host-to-host system with the DG Tax, there is still a remaining challenge to get some flexibilities from the DG Tax to adjust the automated DG Tax’s electronic tax invoice system so that it can be fully integrated with the commercial invoices.