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View all search resultsHow Netflix went from foe to friend in Indonesia
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U
nited States-based streaming platform Netflix is one of the most recent tech giants to have become subject to taxes in Indonesia, as its popularity increases during the pandemic and the government hunts for untapped sources of revenue.
While the streaming service has not disclosed its Indonesian subscription numbers, the company has met a threshold for taxation stipulated by a Finance Ministerial Regulation. The regulation holds that nonresident foreign firms selling digital products and services in Indonesia worth more than Rp 600 million (US$41,345) a year or generating yearly traffic of more than 12,000 users are subject to a 10 percent value-added tax (VAT).
According to Netflix’s second-quarter report, the company has 193 million paid memberships worldwide, having grown by 10.1 million from the same period last year as a greater number of people seek home entertainment during the health crisis.
Indonesia’s digital economy is a hotbed for foreign companies like Netflix, and the sector is expected to be worth US$130 billion by 2025, according to the e-Conomy SEA 2019 report by Google, Temasek and Bain & Company.
