New Tax Rules for Online Sellers in Indonesia

July 30, 2025

Featured VAT Advisors

As part of its efforts to tackle the shadow economy, the Indonesian Ministry of Finance has issued a regulation that requires online marketplaces and e-commerce platforms to collect and remit income tax on sales made by small and medium-sized online sellers. Essentially, the regulation establishes a withholding tax mechanism, tax payment process, and tax reporting procedures on the income received by online sellers through e-commerce transactions.

Impact on E-commerce Platforms and Sellers

Both domestic and foreign e-commerce platforms and online marketplaces may be liable for collecting and remitting income tax if they meet specific requirements, including the use of escrow accounts to manage payments received on behalf of online sellers, reaching a particular transaction value with users in Indonesia within 12 months, or surpassing a defined level of user traffic or access over the same timeframe. The Directorate General of Tax will determine the stated amounts and thresholds.

All platforms and marketplaces that meet the stated requirements will have to collect and remit 0.5% of the gross turnover received by the sellers, excluding VAT and Luxury Goods and Sales Tax (LGST), with an annual turnover of between IDR 500 million and IDR 4.8 billion (USD 30,800 to USD 296,000).

In addition to collecting and remitting taxes, platforms and marketplaces will be required to share the data of online sellers, including their Tax Identification Number (NPWP) or Resident Identification Number (NIK), as well as their correspondence address. Regarding the platforms or marketplaces' data, the Marketplace’s Tax ID Number, correspondence address, and e-mail address or telephone number of the buyers of goods and services must be included in the report.

The Ministry of Finance will notify e-commerce platforms and online marketplaces once they meet the required conditions to become liable for tax reporting. The regulations take effect immediately, but platforms and marketplaces have one month to prepare for compliance with the new reporting requirements.

Conclusion

New reporting and withholding requirements will undoubtedly have a significant impact on the largest e-commerce platforms in Indonesia, including ByteDance's TikTok Shop and Tokopedia, Sea Limited's Shopee, the Alibaba-backed Lazada, Blibli, and Bukalapak.

However, other businesses operating in the Indonesian market should familiarize themselves with these rules and requirements to determine whether they are subject to them and, if so, at what point they will meet the defined criteria to become liable for withholding and reporting.

Source: EY

What is the new e-commerce tax regulation in Indonesia?

The new regulation requires e-commerce platforms and online marketplaces to collect and remit 0.5% income tax on gross turnover from sellers with annual revenue between IDR 500 million and IDR 4.8 billion.

Who is affected by Indonesia's e-commerce tax rules?

Both domestic and foreign e-commerce platforms are affected if they meet specific thresholds for transaction value or user traffic in Indonesia within a 12-month period.

When do the new Indonesian tax regulations take effect?

The regulations are effective immediately, but platforms and marketplaces have one month to comply with the new reporting and tax withholding obligations.

What data must platforms report under the new rules?

Platforms must report online sellers' Tax ID or Resident ID, correspondence address, and also provide their own Tax ID, address, and contact information of buyers.

How does the Indonesian tax authority determine platform liability?

The Directorate General of Tax assesses whether platforms meet the transaction value or user access thresholds, then notifies those that become liable for tax reporting.

Are foreign platforms like Shopee and Lazada affected?

Yes, major platforms such as TikTok Shop, Tokopedia, Shopee, Lazada, Blibli, and Bukalapak are expected to be impacted if they meet the criteria outlined in the regulation.

VAT