Indonesia to levy VAT on 'digital products and services' from July

18 May 2020

Reuters reports that the government of Indonesia plans to charge a 10% value added tax on the sale of digital products and services from 1 July 2020. Southeast Asia’s largest economy will reportedly impose the levy on digital products sold by non-domiciled internet companies ‘with a significant presence in the Indonesian market, including streaming services, applications and digital games’, according to a regulation published on the finance ministry’s website. The Ministry of Communication and Information (MCI) is amongst those to have previously said that over-the-top (OTT) services provided by streaming platforms such as Spotify and Netflix would be among those subject to the new VAT. Neither company responded to requests for comment.