Indonesia began collecting income tax (PPh Article 22) from domestic sellers through designated online marketplaces on October 1, 2026. Appointed marketplace operators collect income tax at 0.5 percent of qualifying sellers’ gross turnover. The four marketplaces currently appointed are Shopee, Blibli, Tokopedia, and Lazada.
The mechanism can apply to foreign-owned companies in Indonesia, including PT PMAs selling goods or services through these marketplaces. It changes how income tax is collected on marketplace sales rather than imposing a separate tax on foreign investors.
How the 0.5% Marketplace Income Tax Works
Designated marketplace operators collect PPh Article 22 at 0.5 percent of the seller’s gross turnover stated in the invoice, excluding value-added tax (VAT) and luxury goods sales tax (PPnBM). The tax becomes due when payment is received by the marketplace.
Need support with marketplace tax compliance? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com
The rules cover individuals and entities that receive marketplace income through a bank account or similar financial account and conduct transactions using an Indonesian IP address or telephone number.
Certain sellers are excluded from collection. Individual taxpayers with annual business turnover of no more than IDR 500 million (USD 30,000) are not subject to marketplace collection after submitting the required declaration. Sellers holding a valid exemption certificate for income tax withholding or collection can also provide the certificate to the marketplace so the appropriate exemption can be applied.
A PT PMA can fall within the collection mechanism if it conducts qualifying transactions through a designated marketplace. Sales through other channels are not automatically subject to marketplace PPh Article 22 collection.
What the 0.5% Tax Means for Foreign-Owned Businesses
For companies under Indonesia’s normal corporate income tax system, the 0.5 percent collected by the marketplace can be used as a credit against the company’s annual income tax bill. This means it is not an additional 0.5 percent tax on top of the company’s normal corporate income tax.
For taxpayers subject to final income tax, the amount collected can be used toward that tax instead. However, the collection can still affect cash flow because the marketplace deducts the 0.5 percent before transferring the remaining payment to the seller.
Accounting and Tax Reporting for Marketplace Sales
The amount a company receives from a marketplace may be lower than the value of its sales. Before transferring the money, the marketplace may deduct platform fees, PPh Article 22, refunds, and other amounts. VAT may also apply to the sale.
Companies should therefore record the full value of their sales rather than only the amount received from the marketplace. Platform fees, PPh Article 22, refunds, and other deductions should be recorded separately.
Keep your marketplace sales and tax reporting aligned. Email info@mapresourcesindonesia.com for assistance
Companies should also keep records showing how much PPh Article 22 the marketplace collected. This allows the tax to be correctly credited against the company’s income tax and matched with its sales records and bank payments.
Companies using more than one marketplace should make sure their taxpayer information is consistent across each platform and matches their Indonesian tax records. Sellers must provide their taxpayer identification number (NPWP) or national identification number (NIK), correspondence address, and any required supporting documents.
Manage Marketplace Tax Compliance with MAP Resources Indonesia
MAP Resources Indonesia assists foreign-owned businesses with bookkeeping, tax reporting, corporate income tax compliance, and transaction reconciliation in Indonesia. Companies affected by the marketplace tax collection mechanism can contact info@mapresourcesindonesia.com for support.
