In response to the continued growth of the country’s e-commerce sector, the Indonesian government has implemented a mechanism to authorize and require foreign and domestic e-commerce providers to charge and collect value-added tax (“VAT”) on sales of digital goods and services to customers in Indonesia.

The latest rules are set forth in the Ministry of Finance (“MOF”) Regulation No. 60/PMK.03/2022, dated April 1, 2022, regarding Procedures to Appoint Collectors, Collection, Payment, and Reporting of Value-Added Tax on the Utilization of Taxable Intangible Goods and/or Taxable Services from Outside the Customs Area in the Customs Area Through Trade Using Electronic Systems (“MOF Reg. 60/2022”). VAT is currently 11% of the value of the taxable goods or services and may be increased to 12% in the future.

The policy was further implemented under the Directorate General of Taxes (“DGT”) Regulation No. PER-12/2020/PJ/2020 regarding Criteria for Appointed Collectors and Collection, Deposit, and Reporting of Value-Added Tax on the Utilization of Taxable Intangible Goods and/or Taxable Services from Outside the Customs Area in the Customs Area through E- Commerce (“DGT Reg. 12/2020”).

DGT Reg. 12/2020 regulates the transaction thresholds and other rules concerning the application of VAT on e-commerce players.

Key Definitions

MOF Reg. 60/2022 stipulates that Indonesian VAT will be imposed on the utilization of certain digital goods and services provided from overseas to Indonesian customers through an electronic system.

DGT REG. 12/2020 defines an electronic system as a series of tools and electronic procedures to prepare, collect, process, analyze, store, show, announce, send, or distribute electronic information. It defines e-commerce providers as businesses that provide electronic communication facilities used for trade transactions. E-commerce provider includes both (i) foreign e-commerce provider, which is an e-commerce provider located outside of Indonesian territory, and (ii) domestic e-commerce provider, which is an e-commerce provider located within Indonesian territory.

It defines digital goods as any intangible goods in the form of electronic or digital information, including goods that are the result of conversion or transformation and goods that were originally in electronic form, at least in the form of software, multimedia, or electronic data. Examples include downloading or streaming apps, books, computer software, games, magazines, movies, music, and newspapers, as well as subscriptions to such products.

Digital services are services provided via the internet or electronic networks, automated or involving only minimal human intervention, and impossible to confirm without information technology, at least in the form of software-based services. This includes services such as advertising, design, marketing, and video conferencing.

According to Article 5 of MOF Reg. 60/2022, a buyer/customer is considered an Indonesian customer if they meet the following criteria:

  1. residence/domicile is in Indonesia, as indicated by their correspondence/billing address and/or their identification of Indonesia when registering with an e-commerce provider;
  2. payments are made using a debit card, credit card or other payment facility provided by an institution in Indonesia; and/or
  3. transactions are made from an Indonesian internet protocol (IP) address or using a phone number with the Indonesian country code.

VAT Collectors

MOF Reg. 60/2022 and DGT Reg. 12/2020 stipulate the appointment of an e-commerce VAT collector. This is defined as an e-commerce business appointed by the MOF to collect, remit, and report VAT on the sale of taxable intangible goods and/or services from outside the customs area to within the customs area via e-commerce.

According to Article 4 of DGT 12/2020, the appointment of a foreign or domestic e-commerce provider as a VAT collector is based on transaction value and/or traffic or access in Indonesia, as follows:

  1. transaction value with buyers in Indonesia exceeds IDR 600 million in one year or IDR 50 million in one month; and/or
  2. the amount of traffic or access in Indonesia exceeds 12,000 users in one year or 1,000 users in one month.

The appointment of VAT collectors is done by way of ex-officio appointment or self-notification.

Ex-Officio Appointments

The DGT will issue an appointment decision designating the foreign or domestic e-commerce provider as a VAT collector if they meet the above thresholds. The appointed e-commerce VAT collector will then receive a VAT collector ID and tax registration letter from the DGT.


Foreign and domestic e-commerce players who meet the criteria to become VAT collectors but have not yet been appointed can apply to the DGT for this status by submitting a notification via email or through the DGT online system. The DGT will review the notification and issue an appointment decision. The format for the notification is provided in the Appendix of DGT Reg. 12/2020.

Reporting Obligation for E-commerce VAT Collectors

Upon appointment, e-commerce VAT collectors must submit a quarterly report on VAT collection and payment. This VAT report should include the following information for each quarterly tax period:

  1. the number of users in Indonesia;
  2. the amount of payments received (not including VAT);
  3. the amount of VAT collected; and
  4. the amount of VAT remitted to the Indonesian government.

Additionally, the DGT may request a detailed VAT report for each calendar year, which should provide at least the following information:

  1. the number and date of each VAT collection slip;
  2. the amount of payment (not including VAT) for each VAT collection slip;
  3. the amount of VAT collected for each VAT collection slip;
  4. the name and Tax ID of users in Indonesia if the information is provided in the VAT collection slip; and
  5. the phone number, email address, or other relevant information related to the identity of the buyer/customer.

According to a 2023 DGT press release, there are currently 144 foreign e-commerce players that have been appointed as foreign VAT collectors. This includes Google Asia Pacific, Google LLC, Netflix, and Apple Distribution International.

By zonxe