Trump Furious Indonesia Still Exploring Google et al
10:14 AM
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Minister of Finance Sri Mulyani ensured that Indonesia would still levy a value-added tax (VAT) of 10% on each digital goods and services from abroad.
Minister of Finance Sri Mulyani
The policy took effect from July 1, 2020. Ani said the assertion, the Minister was familiarly called, even though the President of the United States (US) Donald Trump was furious because digital companies from the country, such as Facebook, Google, Zoom, to Netflix, would be taxed.
According to Ani, what worries the US is the existence of income tax collection (PPh) on foreign digital companies originating from the land of Uncle Sam. Whereas what Indonesia wants to do is to collect VAT for digital transactions.
That is in the Minister of Finance Regulation (PMK) 48 / PMK.03 / 2020 concerning Procedures for Appointment of Collection, Collection, and Deposit, as well as VAT, Reporting on Utilization of Intangible Taxable Goods and/or Taxable Services from Outside the Customs Area Inside Customs Regions through Trade through Electronic Systems (PMSE).
"PMK No. 48 / PMK.03 / 2020 regulates VAT on foreign tax subjects or subjects that we have not been able to ask to collect and collect VAT, because the company is domiciled abroad, but service here. Netflix Example "There is service here, but its existence is not in Indonesian jurisdiction," Ani said in a virtual APITA KITA press conference yesterday.
"Through Perppu No. 1/2020, PMK, and Regulation of the Directorate General, now the subject of foreign taxes can be a collector and collector to be submitted to the Indonesian government. The VAT is not the subject of his letter from the USTR (United States Trade Representative). "The USTR is concerned about PPh, while this is the subject of talks at the OECD (Organization for Economic Cooperation and Development)," continued Ani.
She added PPh levies on digital transactions are indeed still a tough discussion at the OECD Forum. The reason is, if digital PPh levies are applied, there will be a possibility of a reduction in the income of the original company because there must be a share of the PPh levy to the country where the company gets income.
The principle of physical presence is still the main requirement held by some countries in the application of PPh collection. However, on the other hand, some countries are of the opinion that to collect income tax, economic presence requirements can be applied without having a physical presence.
Therefore, Ani emphasized that the steps taken by the Trump administration were not in any way related to the implementation of digital VAT collection that would be taken by Indonesia.
"The VAT has no dispute because the VAT paid is the people who enjoy it. Coupled with the COVID-19 outbreak, everything has moved to digital. So it must be addressed in terms of taxation," Sri Mulyani said.
Look for the collectors
On the same occasion, Director General of Tax of the Ministry of Finance Suryo Utomo revealed that the government was currently discussing with foreign companies that transact digitally in Indonesia. The goal is to find out who can collect the VAT.
"Hopefully, starting in July, we will have appointed one as the collector. So that in August 2020, they can do the collection," Suryo said.
Media Indonesia, Page-10, Wednesday, June 17, 2020
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