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New Indonesian E-Commerce Tax Obligations From April

Monday, January 28, 2019

Indonesia's Ministry of Finance has confirmed that online marketplaces and sellers must comply with VAT and income tax obligations set out in Indonesian in Regulation Number 210/PMK.010/2018 from April 1, 2019.

In an English-language statement, the Ministry said: "Before the effective period of regulation implementation, the Directorate General of Taxes (DGT) will carry out outreach to e-commerce actors, including providers of platform marketplace and traders who use the platform."

The regulation will compel those sellers and marketplaces making supplies worth IDR4.8bn (USD337,000) or more a year to collect value-added tax on their sales to Indonesian consumers and remit these amounts to the tax authority. They must also levy luxury sales tax where appropriate.

Further, marketplaces will be obligated to report sales data to the tax agency about those making supplies to Indonesian consumers on their platforms. Traders and services providers will be obligated to provide an Indonesian taxpayer number to marketplaces.

For those businesses whose turnover falls below the aforementioned IDR4.8bn threshold, their turnover will be subject to tax at 0.5 percent. Larger businesses will be obligated to pay corporate tax of 25 percent on their profits.

The regulation also affects online retailers, businesses that sell through classified ads, those that offer daily deals, and those transacting with consumers through social media.