Twitter, Zoom to pay 10% VAT in Indonesia

Other firms that were named include business networking site LinkedIn Singapore, two units of Twitter, Skype Communications, Zoom Video Communications, antivirus provider McAfee Ireland, and Microsoft Ireland Operations.

Game developer Mojang AB, streaming platforms Novi Digital Entertainment and PCCW Vuclip (Singapore) as well as digital marketplaces Jingdong Indonesia Pertama and Shopee International Indonesia are now on the list, too.

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

Earlier this year, the Indonesian government announced that non-resident companies operating in sectors such as software, multimedia, and data should pay a 10% VAT starting July 1. Since then, US video streamer Netflix, Swedish music-streaming platform Spotify, Google Asia Pacific and Facebook have been added to the list.

Under the regulation, internet-based tech giants that generate annual sales of at least US$40,650 for digital products and services in Indonesia from at least 12,000 users are required to pay the VAT.

The move comes as more businesses go online and remote working becomes more widespread amid the Covid-19 pandemic, which has hit the Indonesian government’s finances.