In Indonesia, the tax man cometh – soon – for Internet firms

By Jim O'Neill on Feb 29 2016 at 6:30 AM
In Indonesia, the tax man cometh – soon – for Internet firms

Indonesia says it will crack down on global Internet firms that do business in the country but aren’t paying , saying it will block services that don’t have “permanent establishment” status there.

The country wants firms like Google, Facebook, Twitter and Netflix to establish a local presence in Indonesia, as do other companies in industries like oil.

That local presence, at minimum a representative office, would then allow firms to be taxed.

Government officials told Reuters that they would present regulations with wide-ranging rules that would apply to providers of streaming services, messaging and social media websites, by March.

Companies that don’t comply will have their bandwidth reduced or be blocked completely.

Officials said that in addition to taxes, the new regulations will help control content related to terrorism and pornography.

Indonesian officials estimate online ads alone were worth some $800 million last year, all of it left untaxed.

Stay tuned.

Follow me on Twitter @JimONeillMedia and on LinkedIn

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