A regulation (No. 210/PMK.010/2018) concerning the taxation of e-commerce transactions is effective 1 April 2019. The regulation applies to all e-commerce transactions including transactions made by online retailers or through social media or made as classified advertisements or daily deals.
Note: The regulation (described below) was revoked and withdrawn prior to the scheduled effective date of 1 April 2019. Read TaxNewsFlash
The regulation does not address the tax treatment of activities of foreign-based companies in Indonesia.
The regulation provides that value added tax (VAT) and “sales tax on luxury goods” will be imposed on all e-commerce transactions—regardless of whether the trader or service provider is a “taxable entrepreneur.” Under the regulation:
The regulation provides definitions of the following terms: electronic platform, electronic marketplace, and marketplace platform provider.
Marketplace platform providers that facilitate the import of goods must register with Indonesia’s customs office where they generally conduct their import activities. This registration must be approved (or rejected) within one business day.
The customs office’s approval of the registration is valid nation-wide, and once the registration is approved, the marketplace platform provider must provide the customs office with its e-catalog and e-invoices for all delivery of goods up to a free-on-board (FOB) value of U.S. $1,500 using the delivery duty-paid regime. For the delivery of goods that have a value of greater than $1,500 FOB or that do not use the delivery duty-paid scheme, the standard import regulations will apply.
Most of the tax and import duty reporting responsibilities rest on the marketplace platform provider because other e-commerce platform providers would not have any information about the transactions conducted through their platforms.
Read a February 2019 report [PDF 736 KB] prepared by the KPMG member firm in Indonesia
© 2020 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.