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Lately, taxing e-commerce has been a controversial topic of discussion within government bodies of Southeast Asia jurisdictions. The Indonesian government has been no exception. Minister of Finance, Sri Mulyani, has stated that the government wants to “level the playing field between businesses that operate online and those offline, which must add 10% Value Added Tax ("VAT") to the price of goods purchased”.

In other words, the government aims to create equality between conventional businesses and e-commerce businesses in terms
of taxation.

At the end of 2018, the government finally set out a new mechanism to turn that intention into reality. The government recently issued a guideline to impose taxes on online transactions done through e-commerce platforms/businesses following the newly issued regulation on taxation for e-commerce trade.

This new regulation is set to come into force on 1 April 2019.

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