Back in 2013, the Directorate General of Tax (DGT) issued
Circular Letter No. SE-62/PJ/2013 concerning the Confirmation
of Provisions of Taxation on E-Commerce Transactions (Circular
Letter). In general, the Circular Letter confirms which
provisions under the taxation laws apply to taxpayers who
conduct e-commerce transactions. "E-commerce" is defined as the
trading of goods and/or services conducted by entrepreneurs and
consumers through an electronic system. There is no further
explanation on what an electronic system is, thus, reference
may be made to the relevant regulations in the communications
and informatics sector. The said regulations define an
"electronic system" as a series of electronic devices and
procedures for preparing, collecting, processing, analysing,
storing, displaying, publishing, transmitting, and/or
distributing electronic information.
Under the Circular Letter, a taxpayer conducting e-commerce
transactions shall be subject to the following income taxes and
VAT.
Income tax
Any additional economic capability received by a taxpayer,
whether generated within Indonesia or overseas, which may be
used for consumption or to add to the wealth of the taxpayer,
in any name or form, inter alia but not limited to:
(i) income from salaried and freelance works; (ii) income from
business and activities; (iii) income from capital, in the form
of movable or immovable assets, such as interests, dividends,
royalties, rents, and profits from sales of assets or rights
not intended for business; and (iv) other income shall be
classified as an income, and thus subject to income tax under
the Income Tax Law.
In consideration of the above, any income obtained by a
taxpayer from e-commerce transactions conducted through an
electronic system must also be subject to income tax. The
amount of payable tax has to be calculated in accordance with
the prevailing regulations.
VAT
Provisions in the VAT Law and its implementing regulations
also apply for taxpayers who conduct e-commerce transactions.
Under the VAT Law, VAT is imposed to, among others: (i)
delivery of taxable goods/services within customs area by
taxable entrepreneurs; (ii) importation of taxable goods; (iii)
utilisation of intangible taxable goods and/or taxable services
from outside the customs area to within the customs area; and
(iv) exportation of tangible taxable goods and intangible
taxable goods, and/or taxable services by taxable
entrepreneurs. Further, sales subject to the luxury goods tax
shall also apply for: (i) the delivery of taxable luxury goods
by an entrepreneur producing the goods within the customs area
in its business activities or works; and (ii) importation of
taxable luxury goods.
Since e-commerce transactions involve the delivery of
goods/services (including luxury goods), they are also subject
to VAT and the sales on luxury goods tax (as applicable).
|
Freddy Karyadi |
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Nina Cornelia Santoso |
Freddy Karyadi (fkaryadi@abnrlaw.com)
and Nina Cornelia Santoso (nsantoso@abnrlaw.com),
Jakarta
Ali Budiardjo, Nugroho, Reksodiputro, Law
Offices
Tel: +62 21 250 5125
Website: www.abnrlaw.com