On July 14, 2025, Indonesia mandated e-commerce platforms to withhold and remit a 0.5% income tax on sales by small- and medium-sized sellers earning 500 million to 4.8 billion rupiah annually (€29,400 - €282,400). Platforms must also report seller data to tax authorities. The rule targets platforms exceeding certain traffic and transaction thresholds, with a one-month compliance window. Aimed at addressing the shadow economy, the regulation has raised concerns from the e-commerce association (idEA) due to its impact on millions of sellers.
Indonesia Implements New E-commerce Tax for SMEs
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Indonesia
Author: Ljubica Blagojević
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General information
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Content accuracy validation date:
12.08.2025
Content accuracy validation time:
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The requirement applies to platforms that meet thresholds based on site traffic and transaction volume over the past year. Though the rules take effect immediately, platforms have a one-month grace period to comply.
The regulation aims to curb Indonesia’s "shadow economy" by increasing tax compliance in the rapidly expanding digital sector. However, the local e-commerce association (idEA) voiced concerns about the tight timeline, given the rule's potential impact on millions of sellers.
With Indonesia’s e-commerce market valued at $65 billion in 2024 and projected to reach $150 billion by 2030, this move signals the government's push to ensure tax collection keeps pace with digital growth.
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