When the Indonesian government announced that selected marketplaces would begin collecting income tax (PPh) on behalf of online sellers, the policy quickly attracted public attention. Many interpreted it as the introduction of a new tax for e-commerce businesses.
In reality, the regulation does not create a new tax obligation. Instead, it changes how existing income tax is collected, with the aim of simplifying tax administration and improving compliance among businesses operating through digital platforms.
A New Collection Mechanism, Not a New Tax
Under Minister of Finance Regulation (PMK) No. 37 of 2025, certain electronic commerce platforms (marketplaces) may be appointed by the Directorate General of Taxes (DGT) to collect Income Tax (PPh Article 22) from domestic sellers conducting transactions through their platforms.
Previously, sellers were generally responsible for calculating, paying, and reporting their own income tax obligations. Under the new mechanism, the appointed marketplace deducts the applicable tax when a transaction occurs and remits it to the tax authority.
The seller's obligation to pay income tax remains unchanged, the collection process simply becomes more centralized.
Which Marketplaces Have Been Appointed?
As part of the initial implementation, the Directorate General of Taxes (DGT) has appointed Tokopedia, Shopee, Lazada, and Blibli as designated marketplace tax collectors. Although the appointments took effect in July 2026, tax collection through these platforms begins on 1 August 2026, allowing time for system implementation and transition.
Who Is Subject to the Collection?
The regulation generally applies to domestic sellers earning income through transactions conducted on appointed marketplaces. However, not every seller will automatically have tax collected.
Individual sellers whose annual gross turnover does not exceed IDR 500 million may be exempt from the 0.5% withholding, provided they submit the required declaration to the marketplace confirming their eligibility. Once the annual turnover exceeds the threshold, the marketplace begins collecting the applicable tax in accordance with the regulation.
Importantly, the IDR 500 million threshold is calculated based on the seller's total annual business turnover, including sales across multiple online marketplaces and offline business activities—not separately for each platform.
How Does the Tax Work?
For eligible sellers, the marketplace collects PPh Article 22 at 0.5% of gross turnover from transactions processed through the platform.
The tax treatment depends on the seller's overall tax regime:
- For taxpayers subject to the final income tax regime on businesses with certain turnover criteria, the collected amount is considered against their final income tax obligation.
- For taxpayers outside that regime, the amount collected generally serves as a tax credit in the annual income tax return.
What Should Businesses Do?
While the marketplace now handles the tax collection process, businesses remain responsible for maintaining accurate financial records and ensuring their tax reporting is correct.
Businesses should consider:
- Submitting the required declaration if eligible for the exemption.
- Reconciling marketplace withholding records with accounting records.
- Ensuring annual tax filings properly reflect tax already collected by the marketplace.
For businesses operating across multiple sales channels, consolidated revenue tracking becomes increasingly important to ensure compliance.
Compliance Beyond Collection
The introduction of marketplace tax collection is only one aspect of Indonesia's broader tax administration reforms. As regulations continue to evolve, businesses should regularly review their tax processes to ensure they remain compliant and well-prepared for future changes.
Moores Rowland Indonesia provides comprehensive Tax Services to help businesses navigate regulatory developments, strengthen compliance, and address tax matters with confidence.
For further information about our Tax Services, contact us:
Jakarta: contact-jakarta@moores-rowland.com
Bali: contact-bali@moores-rowland.com
