Six Digital Companies Already Collected IDR 97 Billion in PMSE VAT

JAKARTA.The Directorate General of Taxes (DGT) revealed that they had received a deposit of Value Added Tax (VAT) for Trade Through Electronic Systems (PMSE) of IDR 97 billion. The VAT comes from six global entities that were appointed as PMSE VAT collectors in the first batch and began collecting them since August 2020.

Quoting Bisnis.com, the six entities include Amazon Web Services Inc., Google Asia Pacific Pte.  Ltd., Google Ireland Ltd., Google LLC., Netflix International B.V., and Spotify AB.  However, DGT was reluctant to elaborate on the PMSE VAT collection from each of these entities, as it is related to data confidentiality.
 
These companies were previously considered to have met the criteria as PMSE VAT collectors as stipulated in the Regulation of the Director General of Taxes number PER-12/PJ/2020. Some criteria that must be met include having 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 one year or 1,000 visitors a month.

The amount of VAT that must be collected by the digital content provider company is 10% of the transaction value or that is delivered to its customers in Indonesia.

The Number of Collectors Increased

The number of VAT collectors who have been appointed currently amounts to 36 entities, after the authority increased the number of collectors in the third batch by 10 companies. As stated in the DGT's written statement, the global technology companies appointed in the third batch included Alibaba Cloud (Singapore) Pte Ltd, GitHub, Inc., Microsoft Corporation, Microsoft Regional Sales Pte.  Ltd., UCWeb Singapore Pte.  Ltd., To The New Pte.  Ltd., Coda Payments Pte.  Ltd., and Nexmo Inc.

Thus, starting from 1 November 2020, VAT will be collected from the sales of content from the entity and must be included in the receipt or invoice issued by the seller as tax withholding slip.

This additional revenue is expected to increase tax revenue which has been depressed due to the Corona Virus Disease 2019 (Covid-19) pandemic. As an illustration, until August 2002 the realization of tax revenues was recorded at IDR 676.93 trillion, down 15.64% from the realization in the same period in 2019. Meanwhile, VAT and Sales Tax on Luxury Goods (SLTG) revenues were recorded at IDR 255.38 trillion or corrected 27.62% of August 2019 revenue.

Meanwhile, the DGT also hopes that the number of PMSE VAT collectors will continue to grow. Therefore, digital companies that have met the criteria as collectors are expected to notify the DGT to immediately be appointed as PMSE VAT collectors.