Back in July, the Indonesian government announced the introduction of a 10 percent VAT on Amazon, Netflix, Spotify and Google sales on the local market. The newly announced companies that will be charged the 10 percent are three units of Facebook, Tiktok, Apple Distribution International, The Walt Disney Company (Southeast Asia), and more of Amazon’s subsidiaries, including its audiobook unit Audible and its voice assistant Alexa.
Facebook said it will comply with the government’s decision. “In Indonesia, we will start collecting VAT as of 1 September, as required under Indonesia regulations,” a Facebook spokeswoman said. The other companies did not immediately respond to requests for comment.
Under the new regulations, non-resident foreign firms which sell digital products and services in Indonesia worth at least IDR 600 million (approximately USD 41,040) per year, or which generate yearly traffic from at least 12,000 users, must pay the 10 percent VAT.
The Indonesian tax office also said it continues to identify other technology companies to inform them of the digital tax rules, adding that the number of firms subject to the VAT will increase. The government says its VAT rules aim to create a level playing field between foreign and local companies and between conventional and digital businesses.
