US Companies Need Time to Fulfill Digital Tax Rules

Sunday, 14 June 2020

US Companies Need Time to Fulfill Digital Tax Rules

JAKARTA. Digital companies from the United States (US) claim they still need time to carry out taxation policies made by the Indonesian government for electronic transactions.

Previously, Indonesia had issued a special regulation on tax collection on digital transactions, through Government Regulation in Lieu of Law (Perppu) number 1 of 2020, and Minister of Finance Regulation (PMK) number 48 of 2020.

In the regulation, business actors both from domestic and abroad who run e-commerce business  (PMSE) will be the subject to tax in the form of Value Added Tax (VAT), Income Tax (PPh) and electronic transaction tax. Specifically regarding the obligation to collect VAT, it will be effective on July 1, 2020.

Citing, digital companies from US claimed that it took at least three months to system and human resources, to carry out this policy. For this reason, the US-based entity will continue to establish communication with the Directorate General of Taxes (DGT).

Read: Tax Issue Amid on Increase in BPJS Kesehatan 

This determination was conveyed to ward off the accusation, that the US refused the policy and would investigate the policies of a number of countries that would impose taxes on digital transactions.

A number of countries are now starting to glance at digital transactions as a source of state revenue. One of the neighboring countries of Indonesia, Thailand also plans to perform similar step. 

Quoting, the country of white elephants, plans to collect 7% VAT on digital transactions. The rule is currently still being discussed jointly between the government and the Thai parliament. 



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