JAKARTA: MOCIT has issued a draft regulation on OTT services which would apply to both onshore and offshore OTT service providers. The Draft Regulation requires an offshore OTT service provider to have a permanent establishment in Indonesia in accordance with CL No. 4/ 2017.
The Draft Regulation was first published in May 2016, and a second draft was released in August 2017 following a public consultation. It is unclear if the second draft will be the final text. MOCIT’s current target is to pass the Draft Regulation by the second quarter of 2018.
Based on the updated Draft Regulation, OTT service providers may be (i) onshore providers, ie. Indonesian individuals or entities; or (ii) offshore providers having a permanent establishment in Indonesia. They are allowed to generate income from: (i) sales and marketing of OTT services, (ii) advertising through OTT services, (iii) collection of OTT customers’ data (in compliance with the prevailing personal data protection regulations in Indonesia), and/or (iv) electronic transactions performed through OTT services.
Under the Draft Regulation, both onshore and offshore OTT service providers are required to register with MOCIT before providing their services in Indonesia. For offshore OTT service providers, one of the requisite documents for registration with MOCIT would be the Taxpayer Identification Number of its agent or representative in Indonesia. The National Broadcasting and Telecommunications Commission has also proposed new registration requirements for both onshore and offshore OTT service providers. Providers may be required to register in Thailand and abide by Thai laws, including Thai authorities’ checks on illegal contents and copyright piracy, and subject to the Thai tax regime.
