Indonesian government plans to collect value-added tax from foreign digital companies such as Google, Facebook, Amazon, Twitter, and Netflix, which lack a physical presence in the country but gain revenue from domestic consumers. The rule will included in the omnibus law for taxation will provide a stronger legal basis for the government to tax digital-based companies.
Moreover, the digital-based companies would be declared a foreign tax subject, which will mandate them to collect value-added tax from economic activities conducted in Indonesia and deposit taxes with the tax authority.
With the revised tax code, Indonesia is following in the footsteps of Singapore and Australia, countries that have implemented the so-called Netflix law. Governments around the world are banding together to try to find a way to collect tax from over-the-top media streaming services and other companies of their ilk.