Twitter, Zoom, 10 More Tech Companies Added by Indonesia to List of Businesses That Must Pay 10 Percent VAT

Indonesia on Tuesday added 12 more companies, including social media firm Twitter and video-conferencing site Zoom, to a list of internet-based businesses that must pay a 10 percent value-added tax on sales.

In July Indonesia had already announced that Alphabet's Google Asia Pacific, Netflix and Facebook among other tech companies would be liable to VAT.

Governments globally are seeking to ensure that internet-based tech giants are paying their fair share of taxes. Indonesia's moves come amid a shift to more online business with increased remote working during the coronavirus and as the pandemic has hit government finances.

Among companies named on Tuesday were business networking site LinkedIn Singapore, two units of Twitter, Skype Communications, Zoom Video Communications, antivirus provider McAfee Ireland, and Microsoft Ireland Operations.

The Indonesian tax office also put game developer Mojang AB, streaming platforms Novi Digital Entertainment and PCCW Vuclip (Singapore) on the list, as well as digital marketplaces Jingdong Indonesia Pertama and Shopee International Indonesia.

The companies must start charging VAT to advertisers and other customers from Oct. 1.

The companies were not immediately available to comment.

Under rules introduced earlier this year, non-resident foreign firms that generate annual sales of at least IDR 600 million (roughly Rs. 29.7 lakh) for digital products and services in Indonesia from at least 12,000 users are required to pay the VAT.

Indonesia, the world's fourth most populous country with a population of nearly 270 million, is experiencing a boom in its digital economy which is expected to reach $130 billion (roughly Rs. 9,57,677 crores) by 2025, a study by Google, Temasek Holdings and Bain & Company predicts.

© Thomson Reuters 2020

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