10 December 2019
Indonesia reportedly issued regulations on 4 December that provide for the taxation of foreign digital/e-commerce companies with a significant presence in Indonesia. The regulations were approved on 25 November and apply with immediate effect.
The regulations include that all foreign companies that actively trade in goods or services electronically in Indonesia are treated as having a taxable physical presence in Indonesia and must appoint a representative to comply with all applicable tax obligations. Whether a foreign company has a taxable presence, however, depends on whether certain thresholds are met in terms of the amount of online traffic from Indonesia, the transactions amount in value or volume, and others. The specific thresholds are still to be provided. Companies with existing digital/e-commerce operations in Indonesia are reportedly given a two-year grace period to comply with the new regulations.
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