Between May and July 2025, Indonesia introduced major reforms to strengthen e-commerce and digital tax collection. PERPRES-68/2025 creates a state-backed system to collect VAT on overseas digital sales, PMK-37/2025 appoints qualifying domestic and foreign platforms (PPMSE) as Article 22 income tax collectors with a 0.5% withholding on sellers’ revenue, and PER-12/2025 tightens VAT reporting and remittance rules. The measures expand the tax base, prevent double taxation, and improve cross-border compliance. Platforms must upgrade systems for monthly reporting, and sellers must provide documentation to avoid unnecessary withholding.
Indonesia Reforms Digital Tax Collection for E-commerce
Public
Indonesia
Author: Ljubica Blagojević
Category:
General information
Views:
7729
Content accuracy validation date:
02.10.2025
Content accuracy validation time:
08:25h
From May to July 2025, Indonesia issued three main regulations to strengthen tax collection on e-commerce and digital transactions:
- PERPRES-68/2025: Creates a state-backed system to collect VAT on overseas digital transactions
- PMK-37/2025: Appoints domestic or foreign electronic platform providers (PPMSE) meeting transaction/user thresholds as Article 22 Income Tax Collectors for domestic sellers.
- PER-12/2025: Updates rules for VAT collection on PMSE (electronic commerce) to align with PMK-81/2024, replacing PER-12/2020.
Main Aspects of PMK-37/2025 – Article 22 Income Tax Collection
- Who is Appointed: Domestic/foreign PPMSE using escrow accounts and meeting thresholds (≥ IDR 600M annually or 12k visits from Indonesia).
- Tax Rate: 0.5% of gross revenue (excl. VAT/LGST) collected and remitted monthly, reported in a unified income tax return.
- Seller Obligations: Provide NPWP/NIK and turnover notifications; small taxpayers (< IDR 500M annual turnover) may be exempt if they submit required letters.
- Exemptions: Certain low-turnover individuals, transport partners, exempted sellers, top-up vouchers, jewelry sales, and land/building transfers.
- Creditability: Tax is creditable against seller’s income tax; excess may be refunded. Prevents double taxation by overriding Article 4(2) & Article 15 withholding rules.
Main Aspects of PER-12/2025 – VAT Collection
- Terminology: Replaces “PMSE VAT collector” with “other party.”
- Appointment & Revocation: Appointment effective from the month after issuance; revocation possible ex-officio or at the other party’s request.
- Reporting & Proof: Other party must remit VAT monthly, submit detailed transaction reports (proof number, amount, buyer’s data). Foreign collectors may remit in USD; domestic collectors use IDR. Overpaid VAT may be offset or refunded depending on status.
- Customer Self-Assessment: Required if no VAT collector is appointed.
PERPRES-68/2025 – Digital VAT Collection System
Mandates to develop a technology-based system for collecting VAT on overseas digital transactions. Implementation begins after a partner is appointed.
NPWP vs. NIP
Indonesia now issues NIP for non-resident entities or individuals performing limited tax functions (e.g., foreign platforms, international organizations). Domestic taxpayers continue using NPWP.
These reforms mark a significant step in Indonesia’s digital tax modernization, requiring domestic and foreign platforms to act as VAT and income tax collectors. The rules expand the tax base, improve cross-border compliance, and standardize procedures. Platforms must rapidly update systems for strict reporting to avoid penalties, while sellers need to track turnover thresholds, maintain documentation, and submit exemption letters on time to prevent unnecessary witholding.
Other news from Indonesia
New webinar was uploaded: Recorded webinar: Evolution of Fiscalization:From fiscal printers to real-time data platforms
Author: Dušan Bučevac
Fiscalization has transformed from a compliance tool reliant on hardware to dynamic, software-driven platforms linking businesses and tax authorities. The webinar was presented by Dušan Bučevac, Sales Manager at Fiscal Solutions, who covered crucial fiscalization milestones and explained how real-time data has reshaped compliance, transparency, and business decision-making. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login
Indonesia Extends Corporate Tax Filing Deadline to May 31 Amid Coretax Issues
Public
Indonesia
Author: Ljubica Blagojević
Indonesia
Author: Ljubica Blagojević
Indonesia extended the corporate income tax return filing deadline from 30 April to 31 May 2026 due to taxpayer requests and Coretax platform issues. The extension applies only to filing, while the PPh Pasal 29 payment deadline remains unchanged. The extension applies to the SPT Tahunan PPh Badan (Annual Corporate Income Tax Return). It follows requests from around 4,000 companies, tax consultants... Read more
New document was uploaded: Country overview- Indonesia
Indonesia
Author: Ljubica Blagojević
In this overview, we present the basics of Indonesia: a non-fiscal country with no mandatory POS certification, hardware requirements, and mandatory e-invoicng system, but businesses must issue receipts as proof of purchase. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login
New document was uploaded: Legal requirements- Indonesia
Indonesia
Author: Ljubica Blagojević
The document serves as a legal and operational guide for retail, VAT, and compliance in Indonesia. It covers regulatory details, VAT rules, reporting obligations, retail processes, and business registration. It highlights the absence of fiscalization, mandatory forms, penalties, and developments in e-invoicing, ensuring comprehensive compliance for retailers. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login
New document was uploaded: Legal Q&A - Indonesia
Indonesia
Author: Ljubica Blagojević
The Q&A document is an essential resource that provides clear answers to the most frequently asked questions in retail. It saves valuable time by consolidating complex information into a practical and accessible format. Prepared by our team of experienced experts, it addresses key issues such as document types, business processes, the registration process, and the applicable laws and regulations. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login
New document was uploaded: Important Characteristics of the System -Indonesia
Indonesia
Author: Ljubica Blagojević
The purpose of this document is to emphasize the most important characteristics and requirements regarding receipts, invoices, return policies, online sales, record keeping, cash registers, VAT recording, penalties and store registration in the system of Indonesia. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login
New document was uploaded: Indonesia- E-commerce
Indonesia
Author: Ljubica Blagojević
This document provides a comprehensive interpretation of the legal and administrative framework required to open and operate an online shop in Indonesia. It outlines the structured process businesses must follow to ensure compliance with trade, tax, and consumer protection laws. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login