As of August 1, 2020, Spotify, Netflix and 4 other digital companies are required to collect 10% tax

The Government of Indonesia through the Director General of Taxes (DGT) today announced 6 global companies that have agreed to collect 10% Value Added Tax for each of their customers in Indonesia.

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The six companies are, Google, Spotify, Netflix, Amazon, and 2 companies that are also owned by Google. The Director General of Taxes assesses that Spotify, Netflix and their friends are eligible to collect value added tax (VAT) in Indonesia.

The regulations regarding digital tax collection in Indonesia have been regulated in the Minister of Finance Regulation (PMK) No.48/PMK.03/2020. Regarding the collection of value added tax (VAT) on trade transactions through the electronic system (PMSE), which took effect last July 1.

That way, the customers of the above six companies in Indonesia will experience price increases after this regulation comes into effect.

The following is a complete list of companies that have been appointed by the government as VAT collectors in this first wave:

Netflix International BV,
Spotify AB.
Amazon Web Services Inc.
Google Asia Pacific Pte. Ltd.
Google Ireland Ltd.
Google LLC.

Each customer will get a tax of 10% of the price before adding the tax when buying digital products from this company. Where the amount of value added tax must be stated on the receipt or receipt issued by the seller as proof of VAT collection.

In addition, the Directorate General of Pakak of the Ministry of Finance also continues to communicate with other foreign business actors who have businesses such as Netflix, Google, Sportify, Amazon and friends, to conduct socialization and find out their readiness.

So, in the near future the Director General of Taxes hopes that outside business actors appointed as VAT collectors for digital products such as Netflix, Google, Sportify, Amazon will continue to grow.

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