Indonesia has added more technology companies that will be obligated to apply 10% value-added tax on sales to Indonesian customers to include Facebook, Disney and TikTok.
Earlier, Indonesia announced a 10% VAT on sales by technology firms including Amazon, Netflix, Spotify and Google, as spending patterns shift with increased remote working amid the coronavirus pandemic, which has caused financial crisis.
The additional companies include three units of Facebook, Tiktok Pte Ltd, Apple Distribution International Ltd, The Walt Disney Company (Southeast Asia) Pte Ltd, and more of Amazon’s subsidiaries, including its audiobook unit Audible and its voice assistant Alexa.
Facebook said the company would comply.
“In Indonesia, we will start collecting VAT as of September 1, 2020, as required under Indonesia regulations,” a Facebook spokeswoman said.
Under the rules, non-resident foreign firms which sell digital products and services in Indonesia worth $41,040 a year, or which generate yearly traffic from at least 12,000 users, must pay the 10% VAT.
Tech giants are increasingly facing tougher fiscal regimes in Southeast Asia, including in Thailand and the Philippines, where legislation pending house approval proposes VAT of 7% and 12% respectively.
Indonesia expects a 13% annual drop in state revenue this year as the coronavirus disrupts business activity.