For online sellers in Indonesia, the mechanism for collecting Income Tax through electronic commerce platforms is set to change. The Directorate General of Taxes (“DGT”) has confirmed that the collection of Article 22 Income Tax (“PPh Article 22”) by designated marketplace platforms is scheduled to commence on 1 November 2026, following the postponement of implementation until 31 October 2026.

The mechanism is governed by Minister of Finance Regulation No. 37 of 2025 on the Appointment of Other Parties as Income Tax Collectors and the Procedures for the Collection, Payment, and Reporting of Income Tax Collected by Other Parties on Income Received or Earned by Domestic Merchants through Electronic Commerce (“PMK 37/2025”). Under this regulation, designated marketplaces will collect PPh Article 22 from eligible sellers’ transactions, deposit the tax to the State Treasury, and report it to the DGT. As a result, sellers will see the applicable tax reflected in their marketplace transaction or settlement records.

Under the current framework, the DGT has designated PT Global Digital Niaga Tbk (Blibli), PT Shopee International Indonesia, PT Tokopedia, and PT Ecart Webportal Indonesia (Lazada) as marketplace platforms appointed to collect PPh Article 22. The applicable rate is generally 0.5% of the relevant gross turnover, excluding Value Added Tax (“VAT”) and Luxury Goods Sales Tax (“LGST”). For example, a gross turnover of IDR 10 million would result in a PPh Article 22 collection of IDR 50,000.

The implementation of PMK 37/2025 does not introduce a new type of Income Tax; rather, it changes the mechanism for collecting the applicable tax. Depending on the seller’s applicable tax regime, the amount collected may constitute final Income Tax or may be treated as an Income Tax credit.

For individual sellers, a key consideration is the IDR 500 million gross turnover threshold. Individual sellers with gross turnover of up to IDR 500 million in a tax year may be excluded from PPh Article 22 collection, subject to the applicable requirements and submission of the required statement to the marketplace. The threshold is based on the seller’s overall gross turnover, including sales through multiple marketplace accounts and offline channels. If the threshold is exceeded, the seller must submit the required statement to the marketplace by the end of the month in which the threshold is exceeded.

Although the marketplace will handle the collection, sellers remain responsible for maintaining accurate tax and accounting records. Sellers should ensure that their tax information is up to date, monitor their aggregate turnover, reconcile marketplace transactions with their internal records, and retain evidence of PPh Article 22 collected. These measures will be particularly relevant for businesses operating across multiple marketplaces or combining online and offline sales.

With implementation approaching, online sellers should review their tax position and accounting procedures to ensure they are prepared for the new collection mechanism. The practical impact of PMK 37/2025 will depend on factors such as the seller’s business structure, total turnover, applicable tax regime, and sales channels.

Schinder Law Firm advises Indonesian and international businesses on corporate, commercial, regulatory, and tax-related matters, including developments affecting digital businesses and e-commerce activities. Businesses seeking to assess the potential application of PMK 37/2025 to their operations may contact info@schinderlawfirm.com for further consultation.

Author:
Dewi Susanti