The government has introduced sweeping regulatory updates targeting the digital economy. Chief among them is the Minister of Trade Regulation Number 19 of 2026 concerning the Operation of E-Commerce Businesses. Under this new scheme, all business actors operating on digital platforms, regardless of whether they are small, medium, or large enterprises, must obtain a business identification number (nomor induk berusaha/NIB).
The NIB serves as the mandatory primary license for anyone selling goods or services through electronic systems, including marketplace merchants. To enforce compliance, the regulation explicitly grants e-commerce platforms and marketplace operators the authority to reject registrations from merchants who fail to provide a valid NIB.
Income Tax for E-Commerce Trades
In tandem with the trade ministry's licensing mandates, the Directorate General of Taxes (DGT) has tightened its grip on marketplace taxation through Minister of Finance Regulation Number 37 of 2025. The regulation shifts the administrative burden by appointing e-commerce platforms as third-party withholding agents responsible for withholding, remitting, and filing taxes on income earned by domestic merchants.
Under these provisions, designated digital platforms must automatically withhold Article 22 income tax at a flat rate of 0.5% on the gross turnover of domestic sellers.
While this 0.5% rate matches the familiar Indonesian MSME final tax rate, their legal mechanisms differ significantly. By default, this new Article 22 withholding tax is non-final, which means merchants can claim these deductions as tax credits to offset their annual income tax liabilities when filing their year-end tax returns. Conversely, standard MSME tax is calculated on gross turnover and cannot be used as a tax credit to offset other liabilities.
Marketplaces Qualify as Withholding Agents
Not every e-commerce site or digital platform is automatically deputized as a tax collector. To be designated as an Article 22 withholding agent, a marketplace operator must at least:
- achieve a transaction volume with Indonesian users exceeding IDR 600 million within 12 months (or IDR 50 million in a single month); and
- attract more than 12,000 active users or visitors in Indonesia within 12 months (or more than 1,000 in a single month).
The specific scale thresholds are outlined in the Director General of Taxes Regulation Number PER-15/PJ/2025 concerning the Criteria and Appointment of Third-Party Withholding Agents for Tax Compliance on Domestic E-Commerce Merchant Income.
How the Article 22 Withholding Mechanism Works
Once a platform is officially designated as an Article 22 withholding agent, the taxation workflow follows a strict timeline.
The 0.5% tax is calculated on the merchant's gross turnover and is triggered the moment the marketplace operator receives payment from the buyer.
For merchants who qualify for the simplified final tax regime under Government Regulation Number 23 of 2018, the Article 22 withholding tax slip issued by the marketplace can be treated directly as proof of payment of their final income tax.
If a merchant's total annual tax liability exceeds what the marketplace withheld, the merchant must independently pay the shortfall under Article 4 Paragraph 2.
On the contrary, if a merchant is overwithheld, they are legally entitled to submit an application to the DGT for a tax refund on revenues that were not due.
Required Documentation for Marketplace Merchants
To successfully claim these deductions as year-end tax credits, merchants must ensure that their sales invoices or billing statements generated through the platform include these specific transaction details:
- invoice/billing document number and date;
- legal name of the marketplace platform;
- registered account name of the domestic merchant;
- buyer's identity (name and address);
- itemized list of goods/services, gross transaction price, and applied discounts; and
- explicit value of the Article 22 tax withheld.
When properly detailed, these billing documents serve as tax withholding slips, and merchants can use these during annual tax filing to apply the withheld Article 22 tax as a credit against their overall tax liability.
While the Minister of Finance Regulation Number 37 of 2025 and PER-15/PJ/2025 have been formally enacted, their practical enforcement on live platforms is pending further government instructions.
Legal References
- Minister of Trade Regulation Number 19 of 2026 concerning the Operation of E-Commerce Businesses.
- Minister of Finance Regulation Number 37 of 2025 concerning the Appointment of Third-Party Withholding Agents and Compliance Procedures for Income Earned by Domestic E-Commerce Merchants.
- Director General of Taxes Regulation Number PER-15/PJ/2025 concerning Criteria and Appointment of Third-Party Withholding Agents for Tax Compliance on Domestic E-Commerce Merchant Income.
Also read:
Article 26 Withholding Tax on Foreign Taxpayers
