Article 22 Income Tax: A Multidimensional Levy

In our previous article, we discussed Article 21 income tax and its latest provisions, including the introduction of the effective tax rate (ETR). This time, we turn to Article 22 income tax, a levy that cuts across multiple dimensions of economic activity.

The legal foundation for Article 22 income tax lies in Law of the Republic of Indonesia Number 7 of 1983 concerning Income Tax, as amended by Law of the Republic of Indonesia Number 7 of 2021 concerning Harmonization of Tax Regulations.

Article 22, Paragraph 1, of the Income Tax Law authorizes the Minister of Finance to appoint certain entities to collect tax from businesses engaged in imports, or from other sectors that receive payments for goods and services financed by state expenditure.

Further, Article 22, Paragraph 2, provides that the collection basis and rates are set by the Minister of Finance Decree, ensuring that the tax withheld approximates the actual income tax liability arising from the relevant business activity.

Over time, these provisions have been implemented through a series of Minister of Finance Regulations (Peraturan Menteri Keuangan/PMK), including the following main areas:

Article 22 Income Tax Collection on Imports and Exports of Certain Commodities

PMK Number 34/PMK.010/2017 governs Article 22 income tax collection on goods delivery and import activities across business sectors. This provision was later amended by PMK Number 41/PMK.010/2022 concerning the Second Amendment to PMK Number 34/PMK.010/2017.

Under these rules, foreign exchange banks and the Directorate General of Customs and Excise are tasked with collecting tax on imports and exports of coal, metallic minerals, and non-metallic minerals.

Import tax rates under Article 22:

10% for specific goods, with or without an importer identification number (angka pengenal impor/API)
7.5% for specific goods without an API
2.5% for specific goods with an API
0.5% for soybeans, wheat, and wheat flour with an API

On the other hand, exports of coal, metallic minerals, and non-metallic minerals are subject to Article 22 income tax at 1.5% of export value, as stipulated in PMK Number 34/PMK.010/2017.

Article 22 Income Tax Collection on Purchases by Government Treasurer

Article 22 also applies to government spending. Goods and services purchased by government treasurers, authorized budget users (Kuasa Pengguna Anggaran/KPA), and other state expenditure officers using funds from the state or regional budget are subject to withholding under Article 22.

The applicable Article 22 income tax rate, set under PMK Number 34/PMK.010/2017, is 1.5% of the purchase price, excluding VAT, to be withheld and reported by the relevant treasurer or KPA.

Article 22 Income Tax Collection on Sales of Fuel Oil, Gas, and Lubricants

Another dimension of Article 22 is its application to the sale of fuel oil, gas, and lubricants by producers or importers. The rates are:

Oil sales:

0.25% of sales value to public fuel stations selling fuel sourced from Pertamina or its subsidiaries
0.3% of the sales value to public fuel stations selling fuel from other suppliers

Gas sales: 0.3% of sales value
Lubricant sales: 0.3% of the sales value

Article 22 Income Tax Collection on Sales of Industrial Products

PMK Number 34/PMK.010/2017, as amended by PMK Number 81/2024, also imposes Article 22 on domestic sales of industrial products to distributors in sectors such as cement, paper, steel, automotive, and pharmaceuticals. The Article 22 income tax rates include:

0.25% on cement sales
0.1% on paper sales
0.3% on steel sales
0.45% on motor vehicle sales (two-wheeled or more, excluding heavy equipment)
0.3% on pharmaceutical sales

Article 22 Income Tax Collection on Domestic Sales of Motor Vehicles

PMK Number 34/PMK.010/2017, as amended by PMK Number 81 of 2024, stipulates that domestic sales of motor vehicles by sole authorized distributors (Agen Tunggal Pemegang Merek/ATPM), authorized distributors (Agen Pemegang Merek/APM), and general importers are subject to Article 22 at 0.45%.

Article 22 Income Tax Collection on Purchases of Raw Materials

Article 22 withholding also applies to purchases of unprocessed raw materials—including forestry, plantation, agricultural, livestock, and fishery products—by industrial companies or exporters. The rate is 0.25% of the purchase price, excluding VAT.

Article 22 Income Tax Collection on Purchases of Coal, Metallic Minerals, and Non-Metallic Minerals

For purchases of coal, metallic minerals, and non-metallic minerals from licensed miners, Article 22 is levied at 1.5% of the purchase price, excluding VAT.

Article 22 Income Tax Collection on Sales of Gold

Previously, Article 22 applied only to sales of gold bullion at a rate of 0.45%. Under PMK Number 48 of 2023, the scope was expanded to include gold jewelry, with a new rate of 0.25% of the selling price for both gold bullion and gold jewelry.

Article 22 Income Tax Collection on Sales via Online Marketplaces

Starting in 2025, PMK Number 37/2025 introduces Article 22 income tax collection on income earned by merchants through electronic platforms (marketplaces/e-commerce). Platform operators are required to withhold 0.5% of merchant income and remit it to the tax authority.

Article 22 income tax earns its reputation as a multidimensional levy because its reach extends across multiple sectors. From imports, exports, and government procurement to industrial sales, raw materials, and even online marketplaces. Understanding how Article 22 income tax applies in each context is essential. If you need further guidance, Ideatax is here to help.

Legal References

Law of the Republic of Indonesia Number 7 of 1983 concerning Income Tax, as amended by Law of the Republic of Indonesia Number 7 of 2021 concerning Harmonization of Tax Regulations.
Minister of Finance Regulation Number 34/PMK.010/2017 concerning Collection of Article 22 Income Tax on Goods Delivery and Import Activities Across Business Sectors, as amended by Minister of Finance Regulation Number 41/PMK.010/2022 concerning the Second Amendment to Minister of Finance Regulation Number 34/PMK.010/2017.
Minister of Finance Regulation Number 38 of 2023 concerning Income Tax and/or Value-Added Tax on the Sale/Delivery of Gold Jewelry, Gold Bullion, Non-Gold, Non-Gemstone, and/or Other Non-Precious Jewelry, and Related Services Conducted by Gold Jewelry Manufacturers, Traders, and/or Bullion Businesses.
Minister of Finance Regulation Number 37 of 2025 concerning the Appointment of Third Parties to Collect Income Tax, and the Procedures for Collecting, Remitting, and Reporting Income Tax on Earnings Received by Domestic Traders Through Electronic Trading Systems.