TikTok Shop has become a popular marketplace in Indonesia, providing sellers with effective marketing opportunities. However, as its use grows, it’s essential for sellers to understand their tax obligations. The TikTok Shop Tax refers to the general tax responsibilities for transactions on the platform, which are governed by existing e-commerce regulations in Indonesia. Sales on TikTok Shop are taxable, with small sellers facing a 0.5% final income tax and larger sellers subject to a 22% corporate income tax.
Is TikTok Shop subject to taxation in Indonesia?
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Author: Ivana Picajkić
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General information
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1290
Content accuracy validation date:
20.12.2024
Content accuracy validation time:
08:31h
TikTok Shop has emerged as a popular marketplace in Indonesia, offering opportunities for sellers to market their products effectively. However, as usage grows, it is crucial for sellers to understand their tax obligations. TikTok Shop Tax refers to the general tax responsibilities for transactions made on the platform, which fall under Indonesia’s existing e-commerce regulations.
Sales on TikTok Shop are taxable, and sellers must pay income tax based on their turnover: small sellers face a 0.5% final income tax, while larger sellers are subject to a 22% corporate income tax. Additionally, sellers with Taxable Entrepreneur (PKP) status must collect an 11% Value Added Tax (VAT) from buyers.
Sellers can calculate their taxes using specific formulas based on their turnover and applicable rates, and they can pay taxes through the e-Billing system. Compliance with these tax obligations is essential for maintaining business credibility and contributing to national development.
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