Indonesia postpones VAT on foreign e-commerce to 1 August 2020

30 June 2020

The Indonesian tax authorities have postponed the introduction of VAT at 10% on all e-commerce goods and service transactions made by non-resident companies to 1 August 2020.

Currently, non-resident businesses providing e-commerce supplies to Indonesia do not have to charge VAT on their sales. However, to remove the unfair advantage that this gives to non-resident companies over Indonesian resident providers, the Indonesian government will introduce VAT at 10% on these types of transactions from August 2020.

The tax authorities also confirmed that the new tax must be charged and collected by the non-resident suppliers, who will have to register for VAT in the country.