Taxation in Indonesia’s digital realm

29 June 2020

While the Covid-19 pandemic has caused a great deal of unprecedented disruption, it has also been a fertile ground for the growth and proliferation of digital companies due to the increasing use of online platforms for a range of activities including social interaction, entertainment, business and commerce.
In response to this new usage, the Indonesian government has issued regulations that will allow it to tax digital companies even though these companies may not have a physical presence in Indonesia. The new regulations attempt to close the legal loophole that existed under the former regulations under which tax obligations were only imposed on companies domiciled in Indonesia or those considered to be permanent establishments.

This is an extract of an article by Soemadipradja & Taher, an Indonesian law firm with which Allen & Gledhill has a strategic alliance. To read the full article from the Soemadipradja & Taher website www.soemath.com, please click here.