Indonesia on Tuesday added 12 more companies, including social media firm Twitter and video-conferencing site Zoom, to a list of internet-based businesses that should pay a 10 percent value-added tax on sales.
In July Indonesia had already announced that Alphabet’s Google Asia Pacific, Netflix and Facebook among other tech companies would be liable to VAT.
Governments globally are seeking to be sure that internet-based tech giants are paying their reasonable share of taxes. Indonesia’s moves come amid a shift to more online trade with increased remote working right through the coronavirus and because the pandemic has hit government finances.
Among companies named on Tuesday were trade networking site LinkedIn Singapore, two units of Twitter, Skype Communications, Zoom Video Communications, antivirus provider McAfee Ireland, and Microsoft Ireland Operations.
The Indonesian tax office also put game developer Mojang AB, streaming platforms Novi Digital Entertainment and PCCW Vuclip (Singapore) on the list, in addition to digital marketplaces Jingdong Indonesia Pertama and Shopee International Indonesia.
The companies should start charging VAT to advertisers and other customers from Oct. 1.
The companies were not immediately to be had to remark.
Under rules introduced earlier this year, non-resident foreign firms that generate annual sales of no less than IDR 600 million (more or less Rs. 29.7 lakh) for digital services and products in Indonesia from no less than 12,000 users are required to pay the VAT.
Indonesia, the world’s fourth most populous country with a population of almost 270 million, is experiencing a boom in its digital economy which is expected to succeed in $130 billion (more or less Rs. 9,57,677 crores) by 2025, a study by Google, Temasek Holdings and Bain & Company predicts.
© Thomson Reuters 2020
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