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Indonesia adds 8 more digital firms that must pay VAT

With latest additions, total number of foreign technology companies liable to pay Value-added Tax increased to 36

Iqbal Musyaffa   | 09.10.2020
Indonesia adds 8 more digital firms that must pay VAT

JAKARTA, Indonesia

Indonesia has added eight more foreign digital companies to a list of businesses that must pay a 10% value-added tax (VAT) on sales.

With the latest additions, the total number of foreign technology companies liable to pay VAT increased to 36, Hestu Yoga Saksama, the spokesman for Finance Ministry’s Taxation Directorate General.

Among companies named on Friday were Alibaba Cloud (Singapore) Pte Ltd, GitHub, Inc., Microsoft Corporation, Microsoft Regional Sales Pte. Ltd., UCWeb Singapore Pte. Ltd., To The New Pte. Ltd., Coda Payments Pte. Ltd, and Nexmo Inc.

“These companies must start charging VAT on digital products and services to advertisers and consumers from Nov. 1,” said Hestu.

Previously, Indonesia announced that Facebook, Apple, TikTok, Amazon, Alexa, and Walt Disney among other tech companies would be liable to VAT starting Sept. 1.

He hopes that all companies that made annual sales of 600 million Indonesian rupiahs ($41,116) to take the initiative and report themselves to the tax office.

Indonesia, the world's fourth most populous country with a population of nearly 270 million, is experiencing a boom in its digital economy which is expected to reach $130 billion by 2025, a study by Google, Temasek Holdings and Bain & Company predicted.


*Writing by Maria Elisa Hospita from Anadolu Agency's Indonesian language service.

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