Database

Foreign firms have reported difficulties regarding access to the Japanese government IT procurement market. Barriers reported include lack of transparency, excessive reliance on sole-source contracting, restrictions on intellectual property ownership and practical administrative obstacles during the procurement procedures.

As a result of the 2015 Tax Reform (Consumpton Tax Basis Circular), new consumption tax rules now apply to cross-border digital services (e.g., e-books, downloaded music, and internet advertisements) provided by overseas businesses to the Japanese market. Electronic services by offshore providers are taxed an 8% consumption tax.
Specifically, this applies to e-books distribution, music and video streaming, services allowing the use of software over the internet, services that provide with an online space to sell products, online advertisement, consulting services over the phone or e-mail.
For business-to-consumer (B2C) transactions, the foreign service provider are required to register as a taxable entity and file consumption tax returns. For business-to-business (B2B) transactions, a reverse-charge mechanism is introduced, which requires the Japanese service recipient to declare taxable sales and the related tax due on its consumption tax return.

As a result of the 2015 Tax Reform (Consumpton Tax Basis Circular), new consumption tax rules now apply to cross-border digital services (e.g., e-books, downloaded music, and internet advertisements) provided by overseas businesses to the Japanese market. Electronic services by offshore providers are taxed an 8% consumption tax.
Specifically, this applies to e-books distribution, music and video streaming, services allowing the use of software over the internet, services that provide with an online space to sell products, online advertisement, consulting services over the phone or e-mail.
For business-to-consumer (B2C) transactions, the foreign service provider are required to register as a taxable entity and file consumption tax returns. For business-to-business (B2B) transactions, a reverse-charge mechanism is introduced, which requires the Japanese service recipient to declare taxable sales and the related tax due on its consumption tax return.

In Japan, copyright levies are to be paid on digital recording devices or media. Manufacturers and importers will collect the amount of compensation together with the purchase price of the device or media. More specifically:
- For sound recording devices, the levies are: 2% of the benchmark price (65% of the catalogue price) or JPY 1,000 (approx. 8,50 USD) for a device with a single recording function and JPY 1,500 (approx. 12,70 USD) for a device with multiple recording functions.
- For visual recording devices, the levies are: 1% of the benchmark price (65% of the catalogue price) or JPY 1,000 (approx. 8,5 USD) for a device with a single recording function.

The rate of the duty imposed on imports originating in China ranges from 34.3% to 46.5%, depending on the company. The rate of the duty imposed on imports originating in South Africa is 14.5%. The rate of the duty imposed on imports originating in Spain is 14%.

Online sales and advertisement of alcohol is prohibited.

Article 27 and 28 of the Law on Information and Electronic Transactions prohibit to distribute and publish certain material online, including material that promotes gambling or that is “immoral” .

Websites are considered electronic systems, and as such, they need to get certified before registering for a domain name. Websites must also provide the identity of the party providing such an electronic system and information on the object of any transaction.

According to Indonesia's de minimis rule, goods with a value of up to 69 SDR / 100 USD are exempted from taxes and duties collected by customs.

The use of cryptocurrency is banned in Indonesia.

The Regulation of the National Payment Gateway allows three types of institutions to process domestic electronic transactions: standardization institutions, switching institutions, and service institutions. According to Article 12(2)c, these switching institutions have to be owned to at least 80% by Indonesian citizens or entities. The switching institutions are defined under Article 1(3) as entities within the National Payment Gateway that "process payment transactions".

In March 2016, Indonsia's Ministry of Communication and Informatics (MOCI) released a circular letter “Concerning the Provision of Application Services and/or Content over the Internet (OTT)”, which proposes a range of new regulations on Internet services. The packages include proposed requirements to use a national payment gateway.

It is reported that the requirements, as proposed, could present compliance problems for foreign service providers and raise competition concerns and trade barriers.

Additionally, a draft OTT regulation was issued in 2017 for public consultation and comments, signalling that the MOCI is still pressing on with these measures, although its contents may change.

Indonesia has not adopted the UNCITRAL model law on e-commerce or e-signatures.

Regulation No. 11/12/PBI/2009 (as amended by Regulation No. 16/8/PBI 2014) requires that any 'e-money' issuer must be licensed by the Indonesia's Central Bank. Moreover, the Circular Letter of Bank Indonesia requires e-money to have a monetary value. Therefore, Indonesian regulations does not allow for virtual currencies such as bitcoin, which remain unregulated.