Tag: Indonesia

Indonesian e-commerce will need to pay income tax and VAT

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Prof. Sunaryati Hartono once said: Indonesia must run the law if it wants to advance.

Indonesia ’s Finance Minister Sri Mulyani recently emphasized that Indonesia ’s economic growth does not come from debt, but from investment by foreign private companies. Relying on investment, she is confident that Indonesia’s economic growth rate can reach 7%. In order to attract more foreign investment, the government should formulate facilitation measures in the financial field. One of them is to deregulate investment and promulgate Omnibus Law, such as the implementation of tax reduction and incentive policies, to attract large amounts of foreign investment. So despite the regulation of e-commerce taxation, its purpose is to attract foreign investment and promote economic development.

Among them, Article 14 of the Comprehensive Tax Law clearly stipulates that resolute action will be taken on all traders who participate in commercial activities in the form of e-commerce. In this case, the Ministry of Finance plans to impose income tax and value-added tax on e-commerce operators.

As mentioned in Article 14, paragraph 1, income tax will be levied on the income of tax bodies that conduct e-commerce activities in Indonesia.

The income tax levied on Indonesian e-commerce traders will follow the provisions mentioned in the Income Tax Law. The value-added tax levied on Indonesian domestic e-commerce traders will follow the provisions of the VAT Law on Goods and Services and the Luxury Sales Tax.

According to the “SEA e-Conomy 2019 Report”, Indonesia is expected to achieve a target of $ 82 billion in e-commerce transactions by 2025. On the other hand, Indonesia’s closest competitor is Vietnam. By 2025, Vietnam’s transaction volume is only 23 billion US dollars. From this fact, the efforts of the Indonesian government to pursue e-commerce taxes are largely meaningful because of the huge tax potential. This potential digital tax can also help the government achieve tax goals.

At the same time, this measure can further regulate the Indonesian e-commerce market, thereby better attracting foreign investment.

Prenuptial Agreement on Indonesia

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Prenuptial Agreement namely agreement made by prospective husband and wife about their marriages, the contents of which depend on the agreement between the two parties provided that it does not conflict with the Law.

According to Indonesian civil law expert Wirjono Prodjodikoro, the word Prenuptial Agreement is defined as a legal relationship regarding property of wealth between two parties, in which one party promises or is considered promising to do something, while the other party has the right to demand the implementation of the agreement. The goal is to protect the assets of each bride and groom where the parties can determine their respective assets.

In general, Prenuptial Agreements are made to separate the assets and debts that are owned by both parties, but in the development of Prenuptial Agreements not only made for the separation of assets, many couples enter questions of interest in the Marriage Agreement. For example, still allowed to pursue his or her hobbies or collect luxury items. Couples can balance each other and remind the family financial stability not to be disturbed.

In principle, the parties determine the contents of the marriage agreement freely to make a deviation from the Indonesian Civil Code’s rules on the union of assets but with the following restrictions:

  1. The agreement may not conflict with decency and legal issues concerning the authentic deeds of public order (Article 139 of the Indonesian Civil Code).
  2. In the Agreement no promises made are deviated from:
    a. Rights arising from the authority of the husband: for example to determine the place of residence or the right of the husband to take care of the union of marital assets;
    b. Rights that arise from the power of parents: for example the right to take care of children’s wealth or children’s education;
    c. Law-determined rights for husband and wife who live the longest: for example being a guardian or appointing a guardian (Article 140 of the Indonesian Civil Code).
  3. There is no promise that contains the release of rights to the inheritance of the people who lowered it (Article 141 of the Indonesian Civil Code).
  4. They should not promise that one party must pay a portion of the debt which is greater than the portion in the union profit (Article 142 of the Indonesian Civil Code).
  5. No promises can be made that their marriage will be governed by foreign law (Article 143 of the Indonesian Civil Code).