28 Mar 2016
Prediction on Taxation on E-Commerce in Indonesia
Social network giant Facebook paid just € 4.327 ($ 6.643) for Corporate Tax in 2014 in UK. It was less than the tax the average UK employee paid on their salary (The average UK Salary is € 26.500 and payroll tax is € 5.392,80)
UK government is going to tax on the income earned from UK since a lot of UK companies paid Facebook to advertise even Facebook in Europe registered as tax payer in North Ireland.
Indonesia e commerce business also has similar situation where a lot of local companies paid for advertising through the market place or social network like Youtube, Google, etc.
So far the owner of foreign market place or social network is not subject to Indonesia Corporate Tax. Indonesia is still using the current tax laws and regulations where they are similar for the transactions on goods and services (traditional transactions).
Tax treaties that Indonesia has with other countries looks not enough strong to tax the income earned from the source countries i.e. Indonesia.
By history, Indonesia tax regulation tend to follow the trend on the developed and neighborhood countries. So it is very possible, in the future that Indonesia will tax the owner of market place and content provider like Amazon, e bay, Google and social network like Facebook, Linked in, etc on the income earned from Indonesia.
Agung Tjahjady SH, CPA, MM, BKP
Registered Tax Consultant, Advocate
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