Indonesia adds to VAT collector list as digital VAT receipts rocket

Appointed non-resident digital service providers help quadruple VAT receipts to over $270m

Indonesia has added a further seven VAT collectors at the end of 2021 to the list of non-resident providers of digital services who must charge and remit tax on provision of electronic services to consumers.

This brings the total to 94 since the Indonesia levied VAT on digital services on 1 July 2020. Tax receipt from digital services VAT income increased from IDR 731 billion to over IDR 3,900 billion (approx €240k).

VAT compliance obligations

Indonesia introduced VAT on digital services from foreign providers and facilitating marketplaces on 1 August 2020. This included a two-test VAT registration threshold:

1. Turnover of IDR600m per year; and, or
2. Over 12,000 Indonesian customers

The Directorate has since nominated each month larger taxpayers that it would require to VAT register. This included the headquarters and many subsidiaries of the biggest providers from around the world. This number is now 73 following this latest round.

Registered providers are expected to submit quarter VAT returns. An annual transactions breakdown is required, too. However any VAT due should be paid monthly and may settle their liabilities in US$.

The taxable supplies include: streaming or download media; apps; cloud services; e-books; subscriptions to online news or journals; membership to online clubs; and gambling.

VAT returns in Indonesia or anywhere globally can be challenging, but our VAT Filer can accurately populate any country submission with verified VAT or GST data from our VAT Calculator or VAT Auditor services.

Asia Pacific VAT on digital services