Indonesia asks Facebook, TikTok and Disney to pay 10% VAT: Tax reports

WION Web Team
Jakarta, Indonesia Updated: Aug 07, 2020, 12:50 PM(IST)

File photo: Facebook logo Photograph:( Reuters )

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The decision was made keeping in mind the shift in spending patterns of the 270 million residents of Indonesia during the pandemic

Indonesia had added Facebook, Disney and TikTok to the list of technology companies that will be obligated to pay 10 per cent Value Added Tax (VAT) on sales to Indonesian customers.

The decision to add these companies in the list was announced in a tax report on Friday morning.

The statement came after last month the country's tax department announced a 10 per cent VAT on sales by technology companies.

Also read: Microsoft planning to buy TikTok's global business: Reports

The decision was made keeping in mind the shift in spending patterns of the 270 million residents of Indonesia during the pandemic. This shift has caused financial difficulties for the government, that it aims to get rid of with this new tax plan.

Other organisations that are a part of the list are Amazon Netflix, Spotify, Google, three units of Facebook, Tiktok Pte Ltd, Apple Distribution International Ltd, The Walt Disney Company (Southeast Asia) Pte Ltd, and more of Amazon’s subsidiaries, including its audiobook unit Audible and its voice assistant Alexa.

Under Indonesia’s rules, non-resident foreign firms which sell digital products and services in Indonesia worth at least 600 million rupiah ($41,039.67) a year or which generate yearly traffic from at least 12,000 users will be required to pay the 10% VAT.

The companies added to the list on Friday have not issued a comment on the increase in tax.

The Indonesian government is expecting a huge drop of 13 per cent in its state revenue due to the ongoing pandemic.

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