Zoom And Netflix Are Crowded In Use In The Middle Of COVID-19, Sri Mulyani Chases Taxes

JAKARTA - The corona virus pandemic or COVID-19 is increasingly spreading in Indonesia. Because of this, the government urges offices to implement a work from home system and not leave the house or stay at home, which makes workers and stakeholders use application services to support work activities.

The government, in Government Regulation in Lieu of Law (Perppu) No. 1/2020 concerning State Financial Policy and Financial System Stability, will collect digital taxes from companies that conduct electronic transactions, such as Netflix and Zoom.

Finance Minister Sri Mulyani explained that the decision to collect electronic transaction taxes was made because COVID-19 increased the movement of electronic transactions. This is because many people do activities at home and do not perform physical mobility.

"Maintaining the government's tax base. To maintain the government's tax base, especially like today using Zoom or Netflix. These companies do not exist in Indonesia so it is impossible to be taxed. However, the economic movement (because of these companies) is very large, "Sri Mulyani said in a video conference with journalists, Wednesday, April 1.

According to Sri Mulyani, the inclusion of digital tax into Perppu No. 1/2020 can provide a basis for taxes to collect VAT deposits on intangible imported goods and also for overseas platform services.

"Also for foreign tax subjects who are defined as having a significant economic presence in Indonesia," he said.

The rules regarding tax collection for electronic activities are regulated in Article 6 of Perppu No. 1/2020, namely:

Article 6

(1) Tax treatment in Trading through Electronic Systems (PMSE) as referred to in Article 4 paragraph (1) letter b shall be in the form of:

a. imposition of Value Added Tax on the utilization of Intangible Taxable Goods and / or Taxable Services from outside the Customs Area within the Customs Area through Trading Through Electronic Systems (PMSE); and

b. imposition of Income Tax or electronic transaction tax on Electronic Trading (PMSE) activities conducted by foreign tax subjects who meet the provisions of significant economic presence.

Then, in article 6 paragraph (6) it reads:

Foreign traders, foreign service providers, and / or overseas Trade Through Electronic Systems (PPMSE) providers that meet the provisions of significant economic presence can be treated as a permanent establishment and subject to Income Tax.

Meanwhile, the provisions for significant economic presence as referred to in Paragraph (6) are explained in Paragraph (7) which reads:

(7) Provisions for significant economic attendance as referred to in paragraph (6) are in the form of:

a. consolidated gross turnover of business groups up to a certain amount;

b. sales in Indonesia up to a certain amount; and / or

c. active users of digital media in Indonesia up to a certain number.