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Indonesia adds tech giants like Microsoft and Alibaba in the list of companies that must pay VAT

Indonesia added 8 more companies including Microsoft and Alibaba Cloud (Singapore) Pvt. Ltd. into the list of companies that must pay 10 % value added tax in their sales.

Back in July, the country announced some companies that would be predisposed to VAT. Some of those companies are Alphabet Inc’s Google Asia Pacific, Facebook, and Netflix.

Names being added to the list since July

A total of 36 firms have been named since July.

On Friday, companies GitHub Inc, UCWeb Singapore Pte Ltd, To The New Pte Ltd, Microsoft Regional Sales Pte Ltd, Coda Payments Pte Ltd and Nexmo Inc are incorporated. These companies must pay taxes starting from November 1st.

The governments all over the world are taking required measures to ensure that such huge tech companies pay their fair share of taxes. These steps by Indonesia come within the shift to online business and remote working due to the COVID-19 pandemic. Needless to say, due to the present situation, the government’s financial condition took an enormous hit.

Other companies that are put in the VAT list

Some other companies in the list are LinkedIn Singapore, Skype Communications, Twitter, and the popular video conferencing tool Zoom Video Communications.

Microsoft Ireland Operations and McAfee Ireland are also present in the list.

The tax department of Indonesia also put Mojang AB, Novi Digital Entertainment, PCCW Vuclip (Singapore), along with Jingdong Indonesia Pertama and Shopee International Indonesia.

The companies must start charging the advertisers and the customer’s value added tax on the products they purchase.

However, there are no official comments or statements from the tech giants.

Indonesia facing a boom in its digital economy

Earlier this year, some rules related to taxes were established. According to those rules, non-resident foreign companies that acquire at least 600 million rupiah as annual sales from at least 12,000 users in the country must pay value added tax.

It is a known fact that Indonesia is the fourth most populated country in the world with a population of over 270 million. And it is currently going through a flourishing and tremendous growth in its digital economy. Plus, it shall reach $130 billion by the end of 2025, research says.

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