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Indonesia announces VAT on four multinational Internet companies

via:博客园     time:2020/7/10 2:18:19     readed:87

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Tencent technology news, in the past few years, countries around the world have set off a wave of digital service tax on the Internet giants in the United States, to put an end to the problem that their huge business income is out of proportion to their domestic tax payment. It's also blowing in the Asia Pacific region. According to the latest news from foreign media, this week, Indonesia, a populous country in Southeast Asia, announced that it would impose value-added tax on four multinational Internet companies.

According to foreign media reports, Indonesia has fulfilled its previous statement in the form of value-added tax, that is, to collect digital service tax on multinational Internet companies.

It is worth mentioning that the tax rate of digital service tax levied by European governments is generally determined according to the global revenue or domestic revenue of American Internet companies, while Indonesia has made a complete list of Internet companies that need to pay value-added tax. There are four companies required to pay tax, but there are six entities. The list is as follows:

Amazon Web Services

Google Asia Pacific

Google Ireland

Google

Netflix International (the world's largest film and video service provider)

Spotify (the world's largest online music service provider)

These companies will be required to remit the tax money to the Indonesian state administration of taxation. The 10% tax rate is the same as the VAT rate imposed by the Indonesian government on other goods and services. In addition, from August 1, 2020, the four companies will be required to pay VAT.

It is worth noting that Indonesia has listed three Google family companies as separate tax targets. Foreign media analysis said that it may be because different subsidiaries of Google operate different businesses, and the Indonesian government does not want Google to fail to pay VAT.

In the list of American technology giants, Microsoft, which focuses on software development, and Facebook, a social networking giant, are not included in the tax list.

A big background for governments to impose digital services taxes on U.S. Internet companies is the complex structural design of their subsidiaries to avoid tax obligations to the greatest extent possible, and many countries are aware that companies such as Google and Amazon, while generating huge revenues through their own consumers, are making net profits

In the past few years, almost all American technology giants have experienced tax evasion in the European Union. The European Commission investigated the tax evasion of several companies, and then issued huge fines and demanded payment of historical tax arrears. For example, the European Commission asked apple to pay $14.7 billion in historical tax arrears to the Irish government, followed by an appeal by apple, which will be tried next week.

The EU has also begun tax reform to fix loopholes and prevent U.S. technology companies from shifting profits from other countries

At the urging of stakeholders such as US technology companies, OECD is currently preparing a global uniform digital service tax, which would avoid countries setting vastly different digital service tax rates and reduce the cost of paying taxes for technology companies. But the global, unified tax scheme has been slow to negotiate.

According to foreign media analysis, one of the reasons why Indonesia has announced to levy value-added tax on Internet giants is to improve the government's financial resources through the new taxes against the background of the new crown epidemic, economic downturn and government revenue reduction.

It is worth mentioning that, almost on the same day, the Indonesian state-owned telecom company announced that it would stop blocking Netflix's network video traffic with the announcement of the Indonesian government's VAT. In the past, telecom operators blocked Netflix's services because the video content was too violent and pornographic.

In addition to Indonesia, Thailand has previously passed a law to impose value-added tax on American Internet companies, but it still needs a vote. (Tencent technology reviser / Chengxi)

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