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Fiscal Restrictions

INDONESIA

Since January 2014

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Ministry of Industry Regulation 02/M-IND/PER/1/2014
The Ministry of Industry Regulation 02/M-IND/PER/1/2014 establishes price preferences for bidders using domestic content. According to the law, the procurement of public goods and services is categorized depending on the Domestic Component Level (Tingkat Komponen Dalam Negeri - TKDN). Price preferences are issued for bidders with more than 25% of TKDN or striving to achieve at least 30%. The price preferences can be up to 15% for the procurement of goods and maximally 7.5% for services.
Coverage Horizontal
Fiscal Restrictions

INDONESIA

Since March 2016

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Regulation 15/M-IND/PER/3/2016
Based on Article 6 of the Regulation 15/M-IND/PER/3/2016, transmission towers and steel-reinforced conductors used in public procurement require a minimum local content of 40%.
Coverage Transmission towers and steel-reinforced conductors
Fiscal Restrictions

INDONESIA

Since 2009

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Decree 41/PER/M.KOMINFO/10/2009
Decree 41/PER/M.KOMINFO/10/2009 requires Indonesian telecommunication operators to expend a minimum of 50% of their total capital expenditures for network development on locally sourced components or services. Decree 41 also requires companies to annually report the percentage of local content procured and have that information “authenticated” by the government or a survey institute appointed by the government.
Coverage Network telecommunication operators
Fiscal Restrictions

INDONESIA

Since August 2009

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Ministry of Industry Regulation 49/2009
The Ministry of Industry adopted on 29 May 2009 a regulation (Regulation 49/2009) requiring the use of domestic products and services in 558 sub-sectors for public procurement. The regulation relates to both domestic and foreign companies established in Indonesia which could be considered as local producers in several sectors, including the telecommunication sector. The regulation is a response to a Presidential instruction No. 2/2009 stipulating that all state administration should 'optimize' the use of domestic goods and services and give price preferences to domestic goods and providers. Domestic products are defined as 'goods/services (including construction-design and engineering) produced or prepared by a company investing and producing in Indonesia, with the possibility to use imported raw material or component in the production or working process'.
Coverage 558 sub-sectors
Source
  • European Commission, DG Trade, 11th Report on Potentially Trade-Restrictive Measures Identified in the Context of the Financial and Economic Crisis, 1 June 2013 – 30 June 2014: http://trade.ec.europa.eu/doclib/docs/2014/november/tradoc_152872.pdf
Fiscal Restrictions

INDONESIA

Since January 2014

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Ministry of Industry Regulation 02/M-IND/PER/1/2014
On 13 January 2014, the Indonesian Ministry of Industry issued Regulation 02/M-IND/PER/1/2014 restricting public procurement (replacing regulation 15/M-IND/PER/2/2011). According to the new law, the procurement of public goods and services is categorized depending on the Domestic Component Level (TKDN) and the Company Utilization Point Rating (BMP) which is based on investments of the suppliers in Indonesia.

The regulation constitutes a local content requirement because domestic service suppliers need to be prioritized, as given by Art. 10. In order to be considered as a domestic service supplier, the majority of shares have to belong to an Indonesian citizen and two thirds of the board members have to be locals. If no domestic service suppliers are participating in the procurement, national service suppliers (with at least 10% of shares belonging to Indonesians) will be taken into consideration. Other regulations were introduced concerning consortiums as these must be led by a domestic service supplier for onshore construction. In the case of offshore constructions the work has to be fulfilled only up to 30% by a domestic supplier. This minimum increases to 50%, when the consortiums includes national or foreign service suppliers.
Coverage Horizontal
Fiscal Restrictions

INDONESIA

Since August 2010

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Presidential Regulation No. 54/2010
According to Presidential Regulation No. 54/2010, foreign companies can only bid in cooperation with a national company (unless no national company has the ability to provide the goods and services requested) and only on bids that exceed the following thresholds:
- Rp 100 billion (approx. 9 million USD for construction services;
- Rp 20 billion (approx. 1,8 million USD) for goods and other services; and
- Rp 10 billion (approx. 0,9 million USD) for consulting services (Art. 104).
In addition, Art. 97 mandates the use of domestic products in government procurement if there are providers offering goods and services with a local content exceeding 40%.
Coverage Horizontal
Sources
  • http://www.globaltradealert.org/state-act/4690
  • European Commission, DG Trade, 11th Report on Potentially Trade-Restrictive Measures Identified in the Context of the Financial and Economic Crisis, 1 June 2013 – 30 June 2014: http://trade.ec.europa.eu/doclib/docs/2014/november/tradoc_152872.pdf
Fiscal Restrictions

INDONESIA

Since January 2014

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Ministry of Industry Regulation 02/M-IND/PER/1/2014
Regulation 02/M-IND/PER/1/2014 restricts the participation of foreign suppliers in public procurement. It states that domestic service suppliers should always be prioritized in public procurement. Only if no domestic service suppliers are participating in the procurement, national service suppliers (with at least 10% of shares belonging to Indonesians) are be taken into consideration. Only once these are unavailable as well, foreign service suppliers are allowed in the procurement process (Art. 16(1)).
Coverage Horizontal
Fiscal Restrictions

INDONESIA

Reported in 2015

Chapter Taxation & Subsidies  |  Sub-chapter Subsidies and favourable tax regime
Preference for export credits
Export financing is granted only to domestic companies. Thus, to be considered for credit, the investor shall constitute a legal entity in Indonesia.
Coverage Foreign companies
Fiscal Restrictions

INDONESIA

Since 2017

Chapter Taxation & Subsidies  |  Sub-chapter Discriminatory tax regime on online services
Circular Letter No. SE-04/PJ/2017 on the Determination of Permanent Establishments for Foreign Tax Subjects Which Are Providers of Applications and/or Content Services Through the Internet (“Circular Letter 4/2017”)
The Indonesian tax authority issued the Circular Letter 4/2017. The Circular is addressed to Over-the-Top Services. Under the Circular, foreign Over-the-Top Services that come within the meaning of permanent establishment under the Circular are subject to Indonesian tax. Entities are also considered as permanent establishments if they provide any form of services for period of 60 days or more within any given 12 month period. It is reported that the law has the objective obtain tax revenue from foreign online businesses such as the social media giants. Additionally, Indonesia’s finance minister of finance recently called for digital services companies to permanently establish themselves in Indonesia, or else face a blockage of services.
Coverage Over The Top (OTT) services
Fiscal Restrictions

INDONESIA

ITA signatory? I II

Chapter Tariffs and Trade Defence  |  Sub-chapter Applied tariffs on digital goods
Average MFN rate
4.34%
Weighted average MFN rate
2.24%
Maximum tariff rate
15.00%
Coverage rate of zero-tariffs
33.70%

Coverage: Digital goods
Sources

Trading restrictions

HONG KONG

Since 2011

Chapter Online sales and transactions  |  Sub-chapter Domain name (DNS) registration requirements
Domain Name Registration Policies, Procedures and Guidelines for .hk and .香港 domain names
For a top domain (.hk), local or overseas individuals or entities are eligible applicants for registration.
The regulations for second-level domains are more restrictive. For example, only residents of Hong Kong are eligible to register a .idv.hk (English Domain Name) and/or a .個人.hk and/or .個人.香港 (Chinese Domain Names), and the registrant must provide a copy of ID or other documentary proof or residence in Hong Kong.
Businesses that want to register a com.hk (English Domain Name) and/or .公司.hk and/or .公司.香港 (Chinese Domain Names) must be registered companies in Hong Kong.
Coverage Horizontal
Trading restrictions

HONG KONG

Reported in March 2018

Chapter Online sales and transactions  |  Sub-chapter Barriers to fulfillment
No de minimis rule
Hong Kong has no de minimis rule, which means that there is no minimum value below which a good is exempted from duties and taxes collected by customs.
Coverage Horizontal
Trading restrictions

HONG KONG

Reported in 2018

Chapter Online sales and transactions  |  Sub-chapter Barriers to fulfillment
UNICTRAL model law
Despite the Electronic Transactions Ordinance Act is based on the UNCITRAL model law on e-commerce, Hong Kong has not officially adopted the UNICTRAL model law.
Coverage Horizontal
Trading restrictions

HONG KONG

Since 1963, last amendment in 2012

Chapter Standards  |  Sub-chapter Product screening and testing requirements
Telecommunications Ordinance
Under Section 9 of the Telecommunications Ordinance, any person who wishes to import to or export from Hong Kong any radio transmitting apparatus needs to obtain a permit granted by the Communications Authority, unless he/she is the holder of an Unrestricted Radio Dealer Licence.
Coverage Radio transmitting apparatus
Trading restrictions

HONG KONG

Reported in 2018

Chapter Standards  |  Sub-chapter Product safety certification (EMC/EMI, radio transmission)
Lack of self-certification
For certain prescribed products (such as plugs, adaptors, extension units) a declaration of conformity is not accepted as a certificate of safety compliance. Therefore, the importer has to provide another certification.
Coverage Selected electrical products, incuding plugs, adaptors, extension units