Indonesia has officially begun implementing a new mechanism for collecting Article 22 Income Tax (PPh Pasal 22) on online marketplace and e-commerce transactions, marking another milestone in the country’s ongoing digital tax reform.
Effective 1 July 2026, selected e-commerce platforms are now authorised to collect income tax directly from eligible domestic merchants selling through their platforms. While the policy has attracted considerable attention among online sellers, the Government has stressed that this is not a new tax, but rather a new way of collecting existing tax obligations.
The move is expected to improve tax compliance while streamlining reporting for merchants operating within Indonesia’s fast-growing digital economy.
DJP to Confirm System Readiness Ahead of Launch
Ahead of the policy’s implementation, Indonesia’s Directorate General of Taxes (DJP) confirmed that its digital infrastructure had been fully prepared to integrate with participating marketplaces.
According to Inge Diana Rismawanti, Director of Counselling, Services, and Public Relations at the DJP, extensive coordination has been carried out with major marketplace operators over recent months.
The tax authority also held a series of direct meetings with each platform to ensure their systems would be ready before the regulation took effect on 1 July 2026.
The legal basis for the policy is Minister of Finance Regulation (PMK) No. 37 of 2025, which authorises the Directorate General of Taxes to appoint third parties to collect, deposit, and report Article 22 Income Tax on behalf of domestic merchants conducting business through Electronic Commerce Systems (PMSE).
Four Major Marketplaces Appointed as Tax Collectors
As of 1 July 2026, four leading Indonesian marketplaces have officially been designated as Article 22 Income Tax collectors:
- Tokopedia
- Shopee
- Lazada
- Blibli
The appointments were made by the Director General of Taxes under authority delegated by the Minister of Finance.
Although the regulation is now in force, the Government has granted these platforms a one-month transition period to complete merchant education, adjust their payment systems, and finalise operational implementation before full enforcement begins.
Additional marketplaces may be appointed in future as Indonesia continues expanding its digital tax framework.
How the New Tax Collection Mechanism Works
Under the new system, the responsibility for collecting Article 22 Income Tax shifts from individual merchants to the marketplace itself.
The process generally follows these steps:
- A customer completes a purchase through one of the appointed marketplaces.
- The marketplace calculates the applicable Article 22 Income Tax.
- The tax is deducted from the merchant’s transaction proceeds.
- An electronic invoice is issued showing the amount of tax collected.
- The invoice serves as official proof of tax collection.
- The marketplace deposits the tax into the State Treasury.
- The marketplace reports the collected tax through the Unified Monthly Income Tax Return (SPT Masa Unifikasi).
According to the DJP, integrating tax collection directly into marketplace payment systems is expected to reduce administrative burdens for merchants while improving reporting accuracy.
The Tax Rate Remains 0.5%
The Government has also clarified that the new mechanism does not introduce an additional tax.
Instead, marketplaces will collect Article 22 Income Tax at 0.5% of a merchant’s gross turnover, excluding Value Added Tax (VAT/PPN) and Luxury Goods Sales Tax (PPnBM).
For example:
| Transaction Value | Amount |
| Gross Sales | IDR 2,000,000 |
| Article 22 Income Tax (0.5%) | IDR 10,000 |
The collected amount is not considered an extra payment. Instead, it forms part of the merchant’s existing income tax obligations.
Businesses subject to the Final Income Tax regime may count the amount towards their final tax settlement, while taxpayers under the general income tax regime may claim it as a tax credit when submitting their Annual Income Tax Return (SPT Tahunan).
Not Every Seller Will Be Subject to the New Mechanism
The regulation also provides several important exemptions.
Marketplace tax collection does not generally apply to:
- Individual taxpayers with annual turnover of up to IDR 500 million, provided they submit the required declaration.
- Domestic courier and delivery partners working with digital platforms.
- Merchants holding a valid Tax Exemption Certificate (Surat Keterangan Bebas).
- Sales of prepaid mobile credit and SIM cards.
- Certain transactions involving jewellery, bullion and gemstones under specific regulations.
- Transfers of land and buildings, including property sale agreements.
Merchants are encouraged to review their tax status carefully to determine whether they qualify for these exemptions.
What Does This Mean for Foreign Businesses?
Although the new mechanism primarily targets domestic merchants selling through Indonesian marketplaces, it also reflects the Government’s broader effort to strengthen compliance across Indonesia’s digital economy.
For foreign investors and international companies planning to expand into Indonesia’s online market, the update serves as a reminder that tax and regulatory planning should form part of every market entry strategy.
Depending on the nature of the business, companies may also need to establish:
- A PT PMA (Foreign-Owned Company)
- A Business Identification Number (NIB)
- Electronic System Operator (PSE) registration
- Electronic Commerce (PPMSE) licensing
- Corporate tax registration
- VAT registration, where applicable
- Ongoing accounting and tax compliance procedures
Learn more about the new regulation here
Stay Updated with Indonesia’s Latest Business and Tax Regulations
Indonesia’s regulatory landscape continues to evolve alongside the country’s growing digital economy. Whether you’re an online seller, a technology company, or a foreign investor looking to enter the Indonesian market, keeping up with new tax and licensing requirements is becoming increasingly important.
For businesses seeking professional guidance on Indonesian tax compliance, corporate establishment, licensing, and ongoing regulatory obligations, LMI Consultancy provides comprehensive advisory services tailored to foreign investors and digital businesses operating in Indonesia.
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