Indonesia is preparing a bill that will make tech firms such as Google and Amazon pay value added tax (VAT), according to Finance Minister Sri Mulyani Indrawati.

Finance Minister Sri Mulyani Indrawati (Source: straitstimes.com)

She said such companies will be considered a “permanent establishment” liable for VAT in Indonesia regardless of whether they have a physical office in the country or not.

In a recent statement, the minister said the VAT collection was because these firms have a significant economic presence in Indonesia although they do not have a branch in the country.

She cited Google, Amazon and Netflix as examples of companies to be affected by the upcoming rules.

The VAT rate in Indonesia is currently 10%, imposed on most products and services.

(Source: VNA)