Indonesia issues new rules to make foreign Internet companies pay taxes

JAKARTA - Indonesia has said that overseas companies that have a significant presence in its booming Internet economy must appoint a representative in the country and pay all applicable taxes, according to a new regulation made public on Wednesday .

The new regulation, effective immediately after it was passed on Nov 25, calls for foreign-based companies that actively trade in goods or services electronically in Indonesia to be considered as equal to having a physical presence in the country and thus, must follow all tax rules accordingly, a copy of the regulation obtained by Reuters showed.

Such companies will be required to appoint a representative within Indonesia's jurisdiction who can act on its behalf, it said. "All this time we have only been a market. But now, if they are actively capitalising on our market, they must also be present here," he said.

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