Indirect Tax News - March 2021

Update on Value Added Tax on sales of digital products to Indonesian customers

Since 1 July 2020 VAT has applied to intangible digital goods and services supplied into Indonesia by overseas providers. The Directorate General of Taxes (DGT) is actively screening key players in the Indonesian digital market place to be appointed as Digital VAT Collectors with respect to VAT on intangible digital goods and services.

When a company is appointed as a Digital VAT Collector, any sales the company makes of intangible goods and/or services within the Indonesian tax jurisdiction is subject to 10% VAT. All VAT collected during a month must be paid to the Indonesian Government by the end of the following month.

As of January 2021, 53 companies have been appointed as Digital VAT Collectors by the DGT, including major tech companies such as Facebook, Google, Microsoft, and most recently eBay Marketplace GmbH and Nordvpn S.A.

The DGT continues to identify and actively communicate with key digital business actors to determine their eligibility for appointment as Digital VAT Collectors. We expect the number of Digital VAT Collectors will continue to increase.

Irwan Kusumanto

Suwenny Leonardi