Indonesia’s Directorate General of Taxes (DJP) has sounded a new note of tax compliance in the digital sector. At a press conference in Jakarta on Wednesday, July 1, 2026, Director General of Taxes Bimo Wijayanto announced the designation of four marketplace platforms — Tokopedia, Shopee, Lazada, and Blibli — as “Other Parties” (Pihak Lain) required to collect Article 22 Income Tax (PPh Pasal 22).
This designation follows from Minister of Finance Regulation (PMK) No. 37 of 2025 on the Designation of Other Parties as Income Tax Collectors, signed by Minister of Finance Sri Mulyani Indrawati on June 11, 2025. Under the accompanying Director General of Taxes Decree (Kepdirjen), all four platforms are required to begin collecting the tax simultaneously starting August 1, 2026.
How does this collection mechanism actually work, who is affected, and what should online sellers prepare? Here’s a breakdown.
A Regulation Built on Designation, Not Voluntary Registration
Unlike the VAT-on-digital-trade (PPN PMSE) scheme, which allows foreign digital platforms to register voluntarily, the Article 22 Income Tax mechanism under PMK 37/2025 operates entirely on a direct designation model, with the Minister of Finance’s authority delegated to the Director General of Taxes (Article 4).
Article 3(2) of the regulation requires that a designated E-Commerce Organizer must use an escrow account to hold sellers’ proceeds, and must meet one or both of the following criteria over the preceding 12 months:
- transaction value exceeding a certain threshold; and/or
- traffic/visitor numbers exceeding a certain threshold.
The exact thresholds are set by the Director General of Taxes and are not specified in the regulation’s text itself. Based on media coverage of the July 1, 2026 announcement, the criteria applied for this first wave were reported as transaction value above IDR 600 million over 12 months, or traffic above 12,000 visitors per year — which explains why only the largest marketplace players were designated first, while smaller and mid-sized platforms have not yet been brought into scope.
How Does Collection Actually Happen at the Transaction Level?
PMK 37/2025 does not specify the technical IT architecture marketplaces must use to separate tax funds from escrow funds — that is left entirely to each platform’s implementation, so long as the end result complies with the collection, remittance, and reporting obligations set out in the regulation.
That said, based on the general pattern of payment gateway and escrow systems typically used by large marketplaces, a simplified flow might look roughly like this (note: this is an illustration of a general mechanism, not a direct quotation from the regulation):
- The buyer pays into an escrow account controlled by the marketplace.
- Once the transaction is confirmed complete, the system calculates Gross Turnover based on the billing document (excluding VAT/luxury goods tax).
- A portion of the funds — 0.5% of Gross Turnover — is allocated for the Article 22 Income Tax obligation, while the remainder is passed on to the seller after the platform’s fee is deducted.
- During the ongoing tax period, the marketplace remits the accumulated collections to the state treasury.
What is legally defined by the regulation is the tax base, the point at which tax becomes due, and the administrative obligations — not the IT architecture:
- Point of liability: when payment is received by the marketplace (Article 8(2)).
- Rate: 0.5% of Gross Turnover as stated on the billing document, excluding VAT and luxury goods tax (Article 8(1)).
- Proof of collection: the billing document (invoice) automatically issued by the marketplace’s system is legally treated as equivalent to an Article 22 Income Tax Collection Receipt (Article 12(4)) — even for transactions exempted from collection, the billing document is still treated as a collection receipt (Article 12(5)), preserving it as an official administrative record.
- Exchange rate: for transactions in foreign currency, conversion to rupiah uses the exchange rate applicable to import duty/VAT/income tax at the time payment is received (Article 8(9)).
- Remittance: made every tax period to the state treasury (Article 14), reported as an attachment to the Unified Income Tax Periodic Return (Article 15).
Who Gets Taxed, and Who Is Exempt?
1. Corporate Taxpayers (PT/CV)
All sellers organized as legal entities are subject to withholding from their very first transaction, with no minimum turnover threshold (Article 6(2) grants relief only to individual taxpayers). This tax can be credited against the seller’s current-year tax liability, or count toward settlement of Final Income Tax if the seller uses the PP 55/2022 (small-business final tax) scheme.
2. Individual Taxpayers & the Turnover Declaration Letter
Individual sellers are exempt from withholding if their current-year turnover has not exceeded IDR 500,000,000, provided they upload a stamped Self-Declaration Letter to the marketplace’s dashboard (the official format is included in the regulation’s Annex).
A few important notes:
- Once current-year turnover exceeds IDR 500 million, the seller must submit a new declaration letter no later than the end of the month in which the threshold is crossed (Article 6(6)–(7)). Automatic withholding then applies starting the first day of the month following the marketplace’s receipt of that declaration (Article 7(3)).
- The exemption declaration (paragraph 2) must be resubmitted at the start of every Tax Year for as long as annual turnover stays below IDR 4,800,000,000 — the upper threshold of the small-business final tax regime (PP 55/2022). In other words, this relief is an annual administrative claim, not a one-time exemption.
- If a seller fails to submit any information at all (Tax ID/national ID number, address, or declaration letter), the regulation makes clear that withholding still applies at the standard rate (Article 8(8)) — silence does not mean exemption; it means the opposite.
- The IDR 500 million threshold is calculated per Taxpayer entity (Tax ID/national ID number), so in practice, sellers operating multiple stores across different platforms should anticipate their turnover being aggregated within DJP’s systems. The regulation itself does not explicitly spell out the cross-platform aggregation mechanism, but the reporting obligation — under which each marketplace must report seller data, Tax IDs, and collection amounts to DJP (Article 15) — creates the conditions for DJP to cross-check data across platforms. The technical details of how that matching would work in practice still need to be confirmed through further implementing regulations or DJP technical guidance.
3. Tax Exemption Certificate (SKB)
Sellers holding a Certificate of Exemption from Income Tax Withholding/Collection (SKB) can submit it to the marketplace (Article 6(3)) and are automatically excluded from the 0.5% collection (Article 10(1)(c)). The SKB must be resubmitted each time a new certificate is issued (Article 6(5)(b)).
4. Third Parties Also Subject to Withholding
The 0.5% withholding also applies to logistics/courier partners and insurance companies whose payments are integrated into the marketplace’s system — their status is treated the same as Domestic Sellers (Article 5(2)).
5. Fully Exempted Categories (Article 10(1))
| Category | Reason |
|---|---|
| Turnover ≤IDR 500 million (individuals, with declaration letter) | Small-business relief |
| Individual courier services partnered with ride-hailing apps | Already covered by their own tax regime |
| SKB holders | Already exempted through another mechanism |
| Prepaid credit and SIM cards | Explicitly excluded |
| Gold jewelry/bullion, gemstones and similar | Explicitly excluded |
| Transfer of land/building rights (sale-purchase agreements) | Covered by the separate final land/building tax regime |
Important: being exempted from this collection mechanism does not mean the income is tax-free. Article 10(2) makes clear that such income remains subject to income tax and must still be withheld/collected/remitted/reported under the general tax rules, outside this particular regulation.
6. Foreign Sellers Can Be Caught Too
The definition of “Domestic Seller” under this regulation is actually based on the location of the transaction, not nationality: anyone who receives payment via an Indonesian bank account and transacts using an Indonesian IP address or Indonesian country-code phone number (Article 5(1)) falls into this category — including foreign sellers shipping goods from abroad to buyers in Indonesia, whose tax is collected through the import mechanism (see the example of a Malaysia-based seller in the regulation’s Annex). Conversely, foreign taxpayers who hold and submit a certificate of tax domicile can be exempted.
When the 0.5% Withheld Doesn’t Match the Actual Final Tax Rate
A point that’s easy to miss: for sellers whose income is subject to final income tax (e.g., land/building rental at a 10% final rate, construction services, or small businesses under PP 55/2022), the marketplace’s 0.5% withholding is only part of settling that final tax liability (Article 8(4)–(5)). There are two possible scenarios:
- Shortfall: if the actual final tax rate is higher than 0.5% (e.g., room rental at a 10% final rate), the seller must remit the shortfall themselves — reported via the Unified Income Tax Periodic Return (Article 8(6), Article 9). Example from the regulation’s Annex: a room rental worth IDR 20 million is withheld 0.5% (IDR 100,000) by the marketplace; the remaining 9.5%, or IDR 1,900,000, must be self-remitted no later than the 15th of the following month.
- Overpayment: if the 0.5% withheld exceeds the actual final tax liability (or none was actually due), the seller may apply for a refund of the overpaid tax (Article 8(7)).
This means sellers offering property rental or construction services through a marketplace cannot assume their tax obligations are settled just because withholding happened automatically — manual reconciliation at the end of the tax period/year is still required.
Penalties for Non-Compliant Marketplaces
Article 16 of the regulation states that marketplaces failing to meet their collection (Article 7), remittance (Article 14), or reporting (Article 15) obligations are subject to a dual set of sanctions: those under tax law, and those under regulations governing private-sector electronic system operators. In other words, compliance risk for platforms extends beyond tax penalties into electronic-system-operator regulation as well.
Conclusion & Mitigation Steps
The transition period leading up to August 1, 2026 is a critical window for digital businesses. Concrete steps to take now:
- Individual sellers with turnover below IDR 500 million: upload the stamped Self-Declaration Letter to the marketplace dashboard before August 1 — don’t wait, since Article 8(8) makes clear that inaction still results in withholding.
- Corporate sellers: ensure Tax ID and correspondence address information is up to date in the marketplace’s system, since withholding applies from the very first transaction with no turnover exemption.
- Multi-store sellers across platforms: prepare consolidated turnover records per Tax ID, anticipating possible cross-platform data matching by DJP.
- Sellers of rental/construction services or other final-tax income: set up a manual reconciliation process at period-end to cover any shortfall between the 0.5% withheld and the actual final tax rate due.
- All parties: retain marketplace-issued billing documents (invoices) as official proof of collection — these documents are now legally equivalent to an Article 22 Income Tax Collection Receipt.
This article is based on the official text of PMK No. 37 of 2025 and its Annex, along with media coverage of DJP’s July 1, 2026 announcement designating Tokopedia, Shopee, Lazada, and Blibli. For technical certainty on implementation (reporting formats, thresholds for future designation waves, and further implementing guidance), readers should monitor further Director General of Taxes Decrees and official DJP announcements.