Income Tax Regulation on E-Commerce
- August 12, 2025
- Posted by: Administrator
- Category: Tax Updates
In order to improve the efficiency and effectiveness of Income Tax collection, the Minister of Finance (MoF) has established a new mechanism through MoF Regulation Number 37 of 2025 (“PMK 37/2025”). This regulation designates other parties as Income Tax collectors, along with the procedures for collecting, depositing, and reporting taxes on income earned by domestic merchants through Electronic System Trading (Perdagangan Melalui Sistem Elektronik/PMSE). PMK 37/2025 became effective on July 14, 2025.
The main points of PMK-37 are as follows:
- Appointment of Marketplace Platforms as Income Tax Collectors
The Other Parties that are appointed by the MoF as withholding agents for Article 22 Income Tax (“PPh 22”) to collect, remit, and report taxes on income received or earned by Domestic Traders through the PMSE mechanism are PMSE Operators/ Marketplace Platforms that reside or are domiciled:
- within the territory of the Republic of Indonesia; or
- outside the territory of the Republic of Indonesia,
and fulfill certain criteria.
The PMSE operators so appointed are those that use an escrow account to collect the income and meet the following criteria:
- Having a transaction value with users of electronic means of providing services used for transactions in Indonesia exceeding a certain amount within 12 (twelve) months; and/or
- Having traffic or number of users exceeding a certain amount within 12 (twelve) months.
The limits on the size of transaction values, traffic volume, or the number of users mentioned above will be further determined by the MoF.
- Criteria for Domestic Traders and Information Disclosure by Domestic Traders to Other Parties
Domestic taxpayers are required to provide information such as their Taxpayer Identification Number (NPWP) or National Identification Number (NIK) and mailing address to Other Parties designated as tax collectors. If a domestic taxpayer has a turnover of up to Rp500 million (specifically for individual taxpayers), they must attach a turnover statement. If they have a certificate of exemption from income tax collection, that document must also be submitted.
This information is to be provided before the income is received. If the turnover exceeds Rp500 million, the Domestic Trader must submit a statement letter no later than the end of the month in which the limit is exceeded. All information must be resubmitted annually or if there are updates.
- Rate, calculation and utilization of Art. 22 Income Tax
| Art. 22 WHT rate | 0.5% of gross income (not including VAT and Luxury Goods Sales Tax) |
| When tax becomes due | When payment is received by the Marketplace Platform |
| Tax Credit | The Article 22 Income Tax that has been paid can be taken into account by the Domestic Trader as a tax credit for the current year. |
| For Domestic Traders subject to Final Income Tax | · Where Article 22 Income Tax is collected on the income of Domestic Traders subject to final income tax (land/building rental, construction services, purchase of goods/services by taxpayers with certain gross income (Article 4 paragraph 2 of the Income Tax Law) and income according to Article 15 of the Income Tax Law (e.g., shipping sector)), the Article 22 Income Tax is part of the final income tax payment for these Domestic Traders.
· If the Art. 22 Income Tax collected is less than the final income tax due, the difference must be paid by the Domestic Taxpayer. · In the case of overpayment, a refund can be requested. |
- Exemption from Withholding of Art. 22 Income Tax by Other Parties
Other Parties do not collect Art. 22 Income Tax on the following transactions:
- Sales by individual taxpayers with a turnover not exceeding Rp500 million, who have submitted a statement letter.
- Shipping/forwarding services performed by individual taxpayers who are partners of application-based transportation entities.
- Transactions with domestic sellers holding an Income Tax exemption certificate (Surat Keterangan Bebas/SKB).
- Sales of prepaid phone credit and SIM card starter packs.
- Sales of gold jewelry and gemstones performed by gold jewelry manufacturers, gold jewelry traders, and gold bar
- Transfer of land/building rights, or binding sales and purchase agreements for land and buildings.