Criteria for VAT-Collecting Digital Companies Determined

The Directorate General of Taxes (DGT) will appoint business actors as Value Added Tax (VAT) collector on transactions of intangible taxable goods or taxable services, from outside into customs areas, whose transactions use electronic system (PMSE).

The appointment is only made for digital business actors who met the criteria, as contained in the regulation of the Director General of Taxes number PER-12/PJ/2020 which is a derivative of the regulation of the Minister of Finance (PMK) number 48/PMK. 03/2020.  

In a regulation that took effect on 1 July, 2020, the digital company designated as a VAT collector has a minimum transaction value of IDR 600 million a year or IDR 50 million a month. Or at least, the digital company has been accessed by more than 12,000 visitors in a year or 1,000 visitors in one month.

For digital companies that have not been appointed, they can choose to be a collector by sending a notification to the DGT. Notifications are delivered via electronic mail or email, application or system provided by DGT.

Right and Obligation

As proof that the company has been appointed as a VAT collector, the DGT will issue a special identity and Registered Certificate. The identity is a means for business actors in carrying out their rights and obligations as VAT collector.

Here are some of the obligations that must be fulfilled by the appointed company. First, VAT Collector of e-commerce (PSME) must conduct account activation and update data online, through a system provided by the authorities. 

Secondly, VAT collector of e-commerce must collect VAT of 10% of each money paid by the buyer and issue a commercial invoice, billing, order receipt or similar document as proof of VAT collection. In order for these documents to be equivalent to a tax invoice, they must be accompanied by an identity such as a name, a Tax ID Number (NPWP) or an email address registered on DGT.

Read: DGT Issues New Rule Regarding SSP, Account Code and Tax Payment Ammended

Third, the PMSE VAT collector is obliged to deposit the VAT collected at each tax period, no later than the end of the following month after the tax period ends. VAT deposits are made electronically to the state cash account through a perception bank, perception post or other perception institution in Indonesia, using a billing code.

The VAT deposited can be in the form of Rupiah, United States Dollar (USD) or other foreign currencies stipulated by the DGT. However, if the VAT is deposited in a foreign currency, then the deposit is made through a perception bank or a perception institution serving foreign currencies.

Fourth, digital companies as VAT collector are required to report VAT collected quarterly, every three tax periods, not more than the end of the following month after the period ends.

The quarterly period referred to is, for the first quarter covering the January to March tax period, the second quarter for the April to June tax period, the third quarter of the July to September tax period and the fourth quarter of the October to December tax period.

The VAT collection report must contain at least information on the number of buyers, the amount of payment, the amount of VAT collected and the amount of VAT deposited.