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Indonesia: VAT and e-commerce transactions, customs duty

Indonesia: VAT and e-commerce transactions

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.

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Note: The regulation (described below) was revoked and withdrawn prior to the scheduled effective date of 1 April 2019.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:

  • All marketplace platform providers must obtain a tax identification number (TIN) and be classified as a “taxable entrepreneur” even when they still qualify as small-scale entrepreneurs. 
  • All e-commerce traders and service providers must provide their TINs to the marketplace platform provider, and if they are taxable entrepreneurs, must impose VAT on their e-commerce transactions and issue the related tax invoice. 
  • At the end of the month, the marketplace platform provider must prepare a summary of all transactions made through its platform and attach that summary with its monthly VAT report. 

The regulation provides definitions of the following terms:  electronic platform, electronic marketplace, and marketplace platform provider.

Customs duty

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.

KPMG observation

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

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