Important Information October 1, Google Ads Indonesia Users Get 10% VAT

Google Indonesia will impose a Value Added Tax (VAT) of 10% for Google Ads users starting October 1, 2019.

This announcement was issued by Google through its official website. In order to comply with applicable tax regulations, all Google Ads sales in Indonesia will be subject to 10 percent VAT. This change applies to all Google Ads accounts with billing addresses in Indonesia.

"This change applies to all Google Ads accounts with billing addresses in Indonesia" Google wrote.

In its official site, Google also mentioned to its customers who are VAT collectors required to provide proof of Tax Payment (SSP) to Google by sending the original and signed letter.

The regulation referred to by Google seems to be the Regulation of the Minister of Finance (PMK) Number 35 / PMK.03 / 2019 concerning Determination of Permanent Establishment (BUT).

In this regulation it is stated that the government will calculate tax obligations based on the volume of business activities in Indonesia, not based on permanent company formation.

Later, the government through the Directorate General of Taxes will calculate how much Google Cs gain income in Indonesia, which is called by the Minister of Finance Sri Mulyani as an economic present. That calculation will be used as material for the tax bill.