Procedures for the Collection of VAT on Cross-Border Digital Transactions through the Tax Collection System for Cross-Border Digital Transactions (SPP-TDLN)

The Government has issued Minister of Finance Regulation Number 49 of 2026 (“MoF Reg. 49/2026“), which sets out the procedures for the collection of Value Added Tax (“VAT“) on cross-border digital transactions through the Tax Collection System for Cross-Border Digital Transactions (Sistem Pemungutan Pajak atas Transaksi Digital Luar Negeri or “SPP-TDLN“). The issuance of this regulation is intended to optimize VAT collection on cross-border digital transactions that have not been covered under the existing VAT collection mechanism for Electronic Commerce (Perdagangan Melalui Sistem Elektronik or “PMSE“), thereby enhancing the effectiveness of VAT collection on the utilization of offshore digital goods and digital services.

Under MoF Reg. 49/2026, the SPP-TDLN mechanism applies to the utilization of intangible Taxable Goods in the form of Digital Goods and/or Taxable Services in the form of Digital Services supplied from outside the Indonesian Customs Territory for use within the Indonesian Customs Territory. However, this mechanism only applies to transactions for which VAT has not already been collected by offshore digital businesses appointed as PMSE VAT Collectors. Accordingly, the SPP-TDLN serves as a complementary (backstop) mechanism to ensure that cross-border digital transactions remain subject to VAT in accordance with the prevailing regulations. The regulation also identifies the parties involved in the SPP-TDLN ecosystem, as summarized below:

The collection, remittance, and reporting mechanism introduced under MoF Reg. 49/2026 may be summarized as follows:

In addition to establishing the procedures for the collection, remittance, and reporting of VAT, MoF Reg. 49/2026 also provides for the payment of a Service Fee to the SPP-TDLN Operator as compensation for administering the VAT collection system for cross-border digital transactions.

The SPP-TDLN Operator is entitled to receive a Service Fee, the amount of which is determined by the Minister of Finance based on the Operator’s VAT remittance performance. The Service Fee is funded through the Budget Implementation List (Daftar Isian Pelaksanaan Anggaran or “DIPA“) under the State General Treasurer’s Budget Section (Bagian Anggaran Bendahara Umum Negara or “BA BUN“), with the Directorate General of Taxes acting as the Assistant Budget User (Pembantu Pengguna Anggaranor “PPA BUN“). The payment process involves monthly reconciliation, to be completed no later than five working days in the following month, the issuance of an invoice by the Operator no later than ten working days in the following month, and administrative verification by the Commitment-Making Officer (Pejabat Pembuat Komitmen or “PPK“) and the Payment Order Signing Officer (Pejabat Penandatangan Surat Perintah Membayar or “PPSPM“) prior to the disbursement of the Service Fee. The Service Fee is subject to withholding income tax in accordance with the prevailing tax regulations. In addition, the services rendered by the Operator to the Government remain subject to VAT under the general VAT provisions.