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 imposed taxes on these digital products, one of which, Indonesia.
Responding to this, Minister of Finance Sri Mulyani said that what the US is questioning is Income Tax (PPh), which is how companies divide their PPh obligations between jurisdictions, and not about VAT.
"VAT is not the subject of the USTR (United States Trade Representative) letter. The USTR is questioning PPh which is the subject of talks at the OECD (Organization for Economic Co-operation and Development), how a company divides its income tax obligations between jurisdictions," he said, in a virtual press conference entitled 'Our State Budget', Tuesday, 16 June.
According to Sri Mulyani, issues that are still being discussed, one of the talks is, for example, there are companies operating in 50 countries and each generating revenue, how taxes will be distributed in each country and at the head office.
"This is what is discussed at the G20 and OECD. The principles emerge whether it is a matter of location, that's why there is a global problem or regional taxation, whether economic present or permanent resident," he said.
Meanwhile, the Director General of Taxes at the Ministry of Finance, Suryo Utomo, targets that in July there will be an appointment of a trade organizer through an overseas electronic system to collect VAT.
"Starting July, we hope that someone will be appointed and hopefully by August they will be able to collect VAT on the tax object," said Suryo.
According to Suryo, currently his staff are in discussion with PMSE organizers abroad regarding their readiness to collect and deposit VAT on transactions for goods and services outside the customs area.
"The context of this PPN is that every use of goods and services from outside Indonesian customs is subject to VAT and is collected by the PMSE appointed by the DJP on behalf of the Minister of Finance," he said.
For your information, through the Minister of Finance Regulation Number 48 / PMK. 03/2020, foreign tax subjects can become tax collectors and collectors to be submitted to the Indonesian government.
The rules for trading through an electronic system (PMSE) are already contained in Government Regulation in Lieu of Law (Perppu) Number 1 of 2020 concerning State Financial Policy and Financial System Stability. Collections, deposits, and VAT reporting on digital products originating from abroad will be carried out by PMSE business actors, namely foreign traders or service providers, overseas PMSE operators, or domestic PMSE operators appointed by the Minister of Finance through the Director General of Taxes .
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
