JAKARTA: Indonesia’s plan to impose 10% value-added tax (VAT) on digital services offered by technology giants is not the subject of a trade investigation by the United States, Indonesia’s finance minister Sri Mulyani Indrawati said on Tuesday.
The US Trade Representative’s office earlier this month said it was investigating digital services taxes (DSTs) being adopted or considered by several countries, such as Britain, Italy and Indonesia.
Indonesia announced last month it would require big internet companies to pay VAT on digital products and services – including streaming services, applications and games – starting July, though authorities have more recently pushed the deadline to no later than August.
“The VAT plan is not the subject of the USTR letter. It took issue with plans for corporate tax, which remains a subject of discussions led by the OECD (Organisation for Economic Cooperation and Development),” Indrawati told a streamed briefing.
The US embassy in Jakarta could not immediately be reached for comment.
Indrawati said Indonesia would not impose corporate income tax before the OECD and G20 countries agree on a global standard for such taxes, likely later this year.
She noted that consumers were paying VAT when they bought a product or a service, rather than companies.
The USTR has also been reviewing Indonesia’s eligibility for its Generalised System of Preferences trade facility since 2018 due to concerns about market access for US goods, services and investment. – June 16, 2020, Reuters
