FILE PHOTO: Indonesia's Finance Minister Sri Mulyani Indrawati attends the World Economic Forum on ASEAN at the Convention Center in Hanoi, Vietnam September 12, 2018. REUTERS/Kham
The minister said it was “because they have what is called a significant economic presence, although they don’t have a branch here,” listing Google, Amazon and Netflix as examples of companies to be affected by the upcoming rules.Google had a tax dispute with Jakarta in 2016 over alleged tax evasion, including missing VAT payments on advertising revenues, which it resolved with an undisclosed settlement.
The bill, which needs parliamentary approval, is part of broader tax reforms in Southeast Asia’s largest economy intended to improve revenue collection, increase compliance and attract investment. The corporate tax rate would be lowered to 20% from 25% starting from 2021, while for companies with public share ownership of at least 40% the rate will be 17% from 20% now, she said.
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