The Indonesian government began implementing the System for Tax Collection on Foreign Digital Transactions (SPP-TDLN) on Sept. 10, 2026. The system changes how Value Added Tax (VAT) is collected on cross-border digital transactions by involving banks and payment institutions in the collection process.
The initial phase of SPP-TDLN is being implemented through Himbara, the group of Indonesia’s state-owned banks, comprising Bank Mandiri, BRI, BNI, and BTN. The government will subsequently expand the system to private banks and financial technology (fintech) providers.
Under SPP-TDLN, VAT collection will no longer depend solely on the compliance of foreign digital businesses. Transactions processed through domestic payment systems can serve as the basis for determining whether VAT is due.
The technical provisions for SPP-TDLN are stipulated in Finance Minister Regulation No. 49 of 2026 (PMK 49/2026), enacted on July 20, 2026. The regulation consists of 24 articles covering taxable transactions, data exchange, collection, payment, and the crediting of Input VAT.
Complementing the PMSE Mechanism
SPP-TDLN does not replace the Electronic System-Based Trading (Perdagangan Melalui Sistem Elektronik/PMSE) mechanism. Instead, it complements the existing PMSE mechanism used to collect VAT from foreign digital businesses appointed by the Directorate General of Taxes (DGT).
Under the PMSE mechanism, foreign businesses such as digital service providers are appointed as VAT collectors. As of the first half of 2026, PMSE VAT revenue reached IDR 42.01 trillion, out of total tax revenue from the digital economy sector of IDR 54.71 trillion.
However, the PMSE mechanism relies on the appointment of businesses based on certain criteria. Transactions involving small and medium-sized digital service providers, certain software-as-a-service (SaaS) services, or unregistered merchants may fall outside the scope of VAT collection.
SPP-TDLN introduces the payment system as an additional point of oversight. Transactions conducted through domestic banks or payment institutions can be processed through the system to determine the applicable VAT obligation.
No Double VAT Collection
The government has also put in place provisions to prevent SPP-TDLN from resulting in double VAT collection.
Article 5 of PMK 49/2026 stipulates that SPP-TDLN applies only to cross-border digital transactions for which VAT has not been collected by digital businesses appointed by the DGT under the PMSE mechanism.
PT Jalin was appointed as the SPP-TDLN operator under Presidential Regulation No. 68 of 2025. The operator works with banks and non-bank institutions that facilitate consumer payments in Indonesia.
PT Jalin will use data on businesses appointed as PMSE VAT collectors. If a transaction is made with a merchant that has already collected PMSE VAT, the transaction will not be subject to another VAT collection under SPP-TDLN.
VAT Becomes Due After Confirmation
PMK 49/2026 sets out when VAT becomes due under SPP-TDLN. VAT becomes due when the SPP-TDLN operator confirms to the Other Party or payment issuer that the transaction is subject to VAT.
Following the confirmation, the Other Party collects VAT based on a formula of 11/111 multiplied by the payment amount. The formula is used because the payment amount is deemed to include VAT.
For transactions denominated in foreign currencies, the VAT amount is converted into rupiah using the exchange rate stipulated under the applicable Finance Ministerial Decree on the date the confirmation is issued.
Under this mechanism, banks and payment institutions not only process transactions but also perform administrative functions in collecting VAT.
Transaction Data Exchange
The implementation of SPP-TDLN requires data exchange between the Other Party and PT Jalin.
Article 8 of PMK 49/2026 requires the Other Party to submit certain information when authorizing a payment. The data includes the transaction reference number, transaction value and currency, the name and country code of the foreign business, payment type, transaction date and time, and the identity of the Other Party.
Certain domestic transaction data, including remittances and fund transfers, may also be used for tax mapping and analysis.
PMK 49/2026 provides for the protection of such data in accordance with Law No. 27 of 2022 on Personal Data Protection.
For example, domestic and foreign account numbers may not be transmitted in raw text or plaintext but must be processed using a one-way cryptographic function, or hash function.
The DGT may access the data through a dedicated terminal provided by the SPP-TDLN operator for tax administration purposes.
Impact on Companies
The implementation of SPP-TDLN also affects the tax administration of companies using digital services from abroad.
PMK 49/2026 stipulates that collection evidence issued by the Other Party, such as a corporate credit card bill statement or bank account statement, may be treated as a Tax Invoice provided that it meets the required conditions.
The document must include the identity of the issuer, seller or foreign business, buyer, collection date, reference number, Tax Base (Dasar Pengenaan Pajak/DPP), and VAT amount.
The buyer’s email address or telephone number recorded in the banking system must also match the data registered in the DGT’s tax administration system.
Data discrepancies may result in Input VAT being ineligible for crediting.
Companies therefore need to ensure that corporate credit cardholder information, payment account details, and tax administration data are consistent. Enterprise Resource Planning (ERP) systems must also be capable of managing bill statements as supporting documents for Input VAT credits.
Companies also need to distinguish transactions with service providers that have been appointed as PMSE VAT collectors from transactions processed through SPP-TDLN. This separation is necessary to prevent double collection and facilitate tax reconciliation.
VAT Payment Within 14 Days
PMK 49/2026 sets a two-stage deadline for remitting VAT.
The Other Party must remit the VAT collected to PT Jalin no later than seven calendar days from the date the confirmation is issued. After receiving the funds, PT Jalin must remit them to the State Treasury within another seven calendar days.
Under these provisions, VAT collected through SPP-TDLN has a maximum remittance period of 14 days, with each stage subject to a seven-day deadline.
The remittance is made through the Tax Deposit mechanism using a Tax Payment Slip (Surat Setoran Pajak/SSP) under the name and Taxpayer Identification Number (NPWP) of the SPP-TDLN operator.
Integrated with Coretax
SPP-TDLN data will also become part of the Coretax tax administration ecosystem.
The integration will enable the DGT to match payment transaction data against data reported by taxpayers. For example, payments made by Indonesian companies to foreign service providers for software, cloud computing, or digital advertising can be compared with expenses reported in their annual corporate income tax returns.
Differences between payment data and reported expenses may provide grounds for the DGT to request an explanation through a Request for Explanation of Data and/or Information (Surat Permintaan Penjelasan atas Data dan/atau Keterangan/SP2DK).
The DGT previously recorded tax revenue from the digital economy sector at IDR 54.71 trillion as of June 30, 2026. In addition to IDR 42.01 trillion in PMSE VAT, the revenue comprised IDR 5.51 trillion from the Government Procurement Information System, IDR 5.10 trillion from fintech, and IDR 1.93 trillion from crypto assets.
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