Indonesia Revokes VATs on Luxury Goods Before Implementation Date, KPMG Says

Indonesia revoked a regulation that would have imposed value-added taxes on luxury goods bought and sold through e-commerce, according to an April 15 notice from KPMG. The regulation was initially scheduled to take effect April 1, but Indonesia reversed the change in late March, KPMG said. Because the VAT change was withdrawn, KPMG said, the “existing income tax regulations” will continue to apply for all e-commerce transactions.

The tax would have imposed VATs “and ‘sales tax on luxury goods’ on all e-commerce transactions -- regardless of whether the trader or service provider was a ‘taxable entrepreneur,’” according to the notice. The regulation also would have required “marketplace platform providers” to obtain a tax identification number and be classified as a “taxable entrepreneur,” according to a Feb. 18 KPMG notice. The regulation required that e-commerce “traders and service providers” provide their tax identification numbers to the marketplace platform provider, impose VATs on their transactions and issue a related “tax invoice,” the notice said. Marketplace platform providers would have been required to submit “a summary of all transactions made through its platform” at the end of each month along with its VAT report, KPMG said.