Indonesia imposes 10 per cent VAT on Facebook, Disney, Tiktok

In this Jan.17, 2017 file photo, the Facebook logo is displayed in a start-up companies gathering at Paris' Station F, in Paris. (AP Photo/Thibault Camus). Sketched by the Pan Pacific Agency.

JAKARTA, Aug 7, 2020, Bangkok Post. Indonesia has added more technology companies that will be obligated to apply 10% value-added tax on sales to Indonesian customers to include Facebook, Disney and TikTok, the tax office said in a statement on Friday, Bangkok Post reported.

Southeast Asia’s biggest country, which has a population of nearly 270 million people, announced last month it will impose 10% VAT on sales by technology firms including Amazon, Netflix, Spotify and Google, as spending patterns shift with increased remote working amid the pandemic, which has hit government finances.

The additional companies announced on Friday include 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.

The companies did not not immediately respond to requests to comment.

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.

Indonesia expects to record a 13% annual drop in state revenue this year as the coronavirus pandemic disrupts business activity.

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