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Google alerts users of 12% VAT on services from Jan. 1
The tech giant has published a website notice alerting all users of an impending billing increase as a result of the planned VAT hike to 12 percent starting in January 2025, preempting the government's formal decision on the matter expected next week.
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The Google logo is transposed on a binary code display in this illustration created on April 29, 2018, in Paris. (AFP/Lionel Bonaventure)
G
oogle has informed users in Indonesia that a new 12 percent value added tax (VAT) will apply to all locally available products and services of the United States tech giant starting on Jan. 1, 2025.
The current VAT rate is 11 percent and applies to a variety of goods and services, including those provided by global digital platforms.
The new VAT rate of 12 percent will be reflected on all bills and invoices from Google Cloud and affect all Google Ads products for both businesses and individuals with a billing address in Indonesia, according to a statement on the company’s website.
“To comply with local tax requirements in Indonesia, Google will be required to increase the VAT rate charged on digital products and services sold to customers located in Indonesia from 11 percent to 12 percent,” it reads.
Read also: VAT hike ‘could backfire’, posing threat for state revenue
The company also notes that users need not take any action in relation to the change, which will be reflected in a direct increase in their advertising costs.
The rate hike is in line with the 2021 Tax Harmonization (HPP) Law, which mandates the government to gradually increase the VAT from 10 to 11 percent in April 2022, and then to 12 percent by January 2025.
