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Jakarta Post

Tech giants to face tighter tax scrutiny

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Fri, September 6, 2019   /  01:21 pm
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Indonesia will follow in the footsteps of several major economies by taxing digital companies, with a newly proposed taxation bill set to serve as legal footing for the government to collect corporate income tax from foreign tech giants doing businesses in the domestic market. The government has been in a long battle to tax foreign digital companies such as Google, Facebook, Twitter and Netflix, which base their businesses in countries with low tax tariffs and profit from domestic consumers. Such a practice leads to unfair tax treatments, particularly for domestic businesses. Finance Ministry Taxation Director General Robert Pakpahan said the government was looking to revise the definition of tax subjects in the new bill in a bid to better tax such companies. “We’re now trying to define the BUT [permanent establishment] beyond a physical presence to cover significant...