In depth

Income tax collectors

• Parties appointed as income tax collectors include e-commerce marketplaces that are domiciled in Indonesia or overseas, and that use escrow accounts to deposit income received or earned by domestic sellers, if they meet one or both of the following criteria:

1. Their total income from service recipients exceeds certain thresholds in Indonesia within 12 months.
2. They exceed certain thresholds for traffic or user numbers within 12 months.

The DGT will further regulate the specific thresholds.

Domestic sellers

• Domestic sellers that are subject to withholding tax under this regulation are individuals or entities that fulfill both of the following criteria:

1. They receive income using a bank account or similar financial account.
2. They conduct transactions using an internet protocol address located in Indonesia or a telephone number with the country code of Indonesia.

• Domestic sellers include shipping or courier service companies, insurance companies and other parties that conduct transactions with buyers of goods and/or recipients of services through e-commerce platforms.
• MOF Regulation 37 applies to all transactions involving domestic sellers, regardless of the location of the buyer of goods and/or recipient of services.
• Domestic sellers must provide the following documents and information to the e-commerce marketplace:

1. Tax identification number (NPWP) or national identity number (NIK)
2. Correspondence address
3. Statement letter using a format set out in MOF Regulation 37
   1. If an individual's annual gross turnover is not more than IDR 500 million, they must submit a statement letter declaring that their annual gross turnover does not meet this threshold. A similar letter must be submitted at the beginning of each tax year.
   2. If an individual's annual gross turnover is more than IDR 500 million, they must submit a statement letter declaring that their annual gross turnover meets this threshold. A similar letter must be submitted at the beginning of each tax year, as long as their annual gross turnover does not exceed IDR 4.8 billion.
   3. If an individual's annual gross turnover does not exceed IDR 500 million but exceeds that threshold in the following tax year, they must submit a new statement letter declaring that their turnover has exceeded IDR 500 million. This statement letter must be submitted by the end of the month in which the threshold is exceeded.
4. Certificate of exemption from withholding tax (if available)

Income tax treatment

• Appointed e-commerce marketplaces are obligated to collect, pay and report the 0.5% Article 22 income tax (excluding VAT and Sales Tax on Luxury Goods) on the gross amounts¹ stated in the invoices issued by domestic sellers with gross turnover exceeding IDR 500 million.
• The obligation to collect Article 22 income tax arises in the month following the e-commerce marketplace's appointment and/or the month after the submission of a statement letter confirming that a domestic seller's annual gross turnover has exceeded IDR 500 million. For example, if the e-commerce marketplace is appointed on 15 August 2025, the obligation to collect Article 22 income tax begins on 1 September 2025.
• The Article 22 income tax becomes payable when the e-commerce marketplace receives payment on behalf of the domestic seller.
• E-commerce marketplaces remain obligated to collect, remit and report the 0.5% Article 22 income tax, even if the domestic seller fails to provide the required documents and information set out above to the e-commerce marketplace.

The Article 22 income tax withheld can be credited against the income tax liability of domestic sellers. For domestic sellers subject to the final income tax regime, the withheld tax is treated as part of their final tax obligation. If the amount of Article 22 income tax collected under MOF Regulation 37 is less than the final income tax due, these domestic sellers must pay the shortfall and report it in their Unified Monthly Income Tax Return (SPT Masa PPh Unifikasi). Non-compliance may result in sanctions in accordance with the prevailing tax regulations applicable to domestic sellers.

Exemption from Article 22 Income Tax collection

• The appointed e-commerce marketplace should not collect 0.5% Article 22 income tax under MOF Regulation 37 for the following transactions:

1. The sale of goods and/or services by an individual domestic taxpayer whose gross turnover does not exceed IDR 500 million in the current tax year
2. The provision of shipping or courier services by an individual domestic taxpayer acting as a partner of a technology-based application company providing transportation services
3. The sale of goods and/or services by a domestic seller who submits a tax exemption certificate
4. The sale of prepaid phone credit (pulsa) and starter packs
5. The sale of gold jewelry, gold bars, jewelry made entirely of non-gold materials, gemstones, and/or similar stones, conducted by gold jewelry manufacturers, gold jewelry traders, and/or gold bar entrepreneurs
6. The transfer of rights to land and/or buildings or binding sale and purchase agreements for land and/or buildings, including any amendments to those agreements

Income tax reporting obligation

• Domestic sellers are required to issue invoices (serving as Article 22 Income Tax collection) on their own behalf on the sale of goods and/or services to buyers using the electronic system provided by the e-commerce platform. The invoices must at least contain the following information:

1. Invoice number and date
2. Name of the appointed e-commerce marketplace
3. Account name of the domestic seller
4. Identity of the buyer of goods and/or services (including name and address)
5. Type of goods and/or services, selling price and discount
6. Article 22 Income Tax payable by the domestic seller

• Appointed e-commerce marketplaces are obligated to pay the 0.5% Article 22 Income Tax that has been collected to the State Treasury no later than the 15th of the month following the month in which the transactions take place.
• Appointed e-commerce marketplaces are required to report the Article 22 income tax in their Unified Monthly Income Tax Return (SPT Masa PPh Unifikasi) at the latest by the 20^th of the month following the month in which the transactions take place. In addition to the documents and information that the domestic sellers must provide to the e-commerce marketplace, the appointed e-commerce marketplace must provide the following information to the DGT as attachments to the Unified Monthly Income Tax Return:
  • Other information
    • Name, account name and/or country of choice of the domestic sellers
    • Tax Identification Number and/or correspondence address of the e-commerce marketplace
    • Email address or telephone number of the purchasers of goods and/or services
  • Information set out in the invoices
  • Income Tax Article 22 collected and paid

Non-compliance may result in sanctions in accordance with the prevailing tax regulations and the regulations applicable to the private sector electronic system operators.

Actions to consider

Businesses need to assess the possibility that they will be subject to these new tax obligations, and should monitor further implementing regulations to ensure proper classification as income tax collectors.

In cases where they may be subject to the new obligations, businesses may also need to prepare their systems to accommodate the potential new tax obligation and begin to socialize this potential new tax obligation to their merchants.

1 Before any deductions (e.g., sales discount, cash discount, platform fees, etc.) are applied.

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Ria Muhariastuti, Senior Tax Specialist, and Harizka Rizal, Tax Specialist have contributed to this legal update.

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