Higher Netflix bill? Govt to charge VAT on imported digital goods, services starting July
17 May, 2020
The Finance Ministry begins charging ten percent value-added tax (VAT) on imported digital goods and services, which include video and music streaming subscriptions, beginning with July 1 so that they can boost state earnings amid the COVID-19 outbreak.
According to Finance Ministerial Regulation No. 48/2020, the tax will be collected from customers by the digital goods and services providers or their representatives in Indonesia which will be appointed by the ministry’s Taxation Directorate General.
“The regulation will connect with music and film streaming subscriptions, digital applications and games and online services from abroad. They will have the same treatment as conventional products put through VAT together with similar digital products produced by domestic businesses,” the directorate general wrote in a statement published on Friday.
“[The tax] is probably the government’s efforts to make a level playing field for all business players, especially between domestic and foreign players and also conventional and digital businesses.”
The ministry will appoint providers that contain passed a particular transaction value or amount of traffic to accumulate the VAT because of their goods and services. Meanwhile, companies that contain met the transaction requirement but have not been appointed were also urged to notify the authorities.
The ministerial regulation is a follow-up to a government regulation in lieu of law issued on March 31 that aims to aid the government’s efforts to fight the adverse economic impacts of the COVID-19 pandemic.
Previously, Finance Minister Sri Mulyani Indrawati said companies such as for example streaming service Netflix and online meeting iphone app Zoom were a few examples of foreign businesses with a substantial economic presence in the united states that would be subjected to the tax.
Source: www.thejakartapost.com
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