Trump Shouldn't Be Outraged By The Netflix Cs Tax

Illustration. (Photo: Unsplash)

JAKARTA - The government will collect a value added tax (VAT) of 10 percent for paid streaming services for movies, videos, games and music such as Netflix, Spotify, Zoom, and others. This regulation is contained in the Minister of Finance Regulation (PMK) number 48 of 2020 and will come into effect on July 1, 2020.

The President of the United States (US), Donald Trump was furious about this, and he instructed his government ranks to investigate several countries that impose taxes on these digital products. The reason is, most of the digital platforms that will be taxed are from the US.

According to the Center for Indonesian Taxation Analysis (CITA) Research Manager, Fajry Akbar, Trump shouldn't be angry about this. This is because, he said, every country has the right to collect taxes based on income in its region or destination based income.

"Communication is needed between the Indonesian government and the US. The implementation of PMK is not contradictory and should be acceptable to the US," said Fajry in a virtual discussion, Wednesday (10/06/2020).

Fajry said that the multilateral tax institutions such as the Organization for Economic Co-operation and Development (OECD) should also step in to face this polemic. The OECD must be able to mediate in current tax issues.

"However, there are still many countries that do not comply with OECD provisions," he said.

The polemic has increasingly become when the Head of the US Trade Representative (USTR), Robert Lighthizer, stated that digital taxes in several countries are an attempt to extract local income from companies operating globally.

For your information, investigations from the US government will be carried out on Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey and the UK. Currently, the US Department of Commerce has requested consultations with the governments of these countries.

Previously, the Director of Counseling, Services and Public Relations at the Directorate General of Taxes (DJP) Hestu Yoga Saksama said the government had determined VAT collection on the sale of digital goods and services through foreign merchants or service providers.

Even though it is effective from July 1, 2020, this VAT collection will be carried out as early as August 2020. This is expected to give enough time for both foreign digital product business actors and DGT to be able to prepare an easy, simple, and easy collection, payment and reporting system. and efficient.

With the enactment of this provision, VAT is imposed on digital products such as music streaming subscriptions, streaming movies, applications, digital games, and foreign online services. DGT will treat it the same as various conventional and digital products sold by domestic business actors.