- Introduction of Withholding Tax Requirements: Indonesia’s Ministry of Finance Regulation No. 37, published on July 14, 2025, mandates both domestic and foreign e-commerce platform operators to act as income tax withholding agents for transactions conducted by domestic traders selling goods or services in Indonesia.
- Conditions for Foreign Operators: While domestic operators must comply with the withholding requirements generally, foreign operators will face specific conditions based on their transaction volumes and platform traffic over a 12-month period, as determined by the Minister of Finance.
- Withholding Tax Rate and Compliance: The withholding tax rate is set at 0.5% of the gross turnover of domestic traders (excluding VAT and luxury goods sales tax). This tax must be withheld and remitted monthly, and is treated as an advance payment of income tax for the domestic trader, with the regulation effective from July 14, 2025.
Source Orbitax
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