Indonesia to Charge 10% Value Added Tax on Sales of Foreign Digital Products

According to a regulation published by the Ministry of Finance of Indonesia, Internet companies will be required to pay a 10% Value Added Tax (VAT) on the sales of digital products and services, effective from the 1st of July 2020. This is expected to include streaming services, applications and digital games, such as Netflix and Spotify. 

Meanwhile, the Directorate General of Taxes in Indonesia stated that the tax on digital products sold by non-resident Internet companies is an effort on the part of the Government of Indonesia to create a fair playing field for all businesses.

Indonesia’s Minister of Finance Sri Mulyani Indrawati echoed this sentiment, stating that the charg...