Indonesia imposes 10% VAT on Facebook, Disney, Tiktok: tax office

FILE PHOTO: A Facebook logo is displayed on a smartphone in this illustration
FILE PHOTO: A Facebook logo is displayed on a smartphone in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

August 7, 2020

JAKARTA (Reuters) – Indonesia has added more techology 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.

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.

(Reporting by Tabita Diela; Additional reporting by Fanny Potkin; Writing by Fransiska Nangoy; Editing by Ed Davies)