As cross-border digital transactions conducted by domestic taxpayers continue to increase, the mechanism for collecting Value Added Tax (VAT) on such transactions has not yet been implemented optimally. To align tax administration with developments in the digital economy and improve the efficiency, effectiveness, and certainty of tax collection, the Government issued Minister of Finance Regulation (MoFR) Number 49 of 2026 concerning the Foreign Digital Transaction Tax Collection System (SPP-TDLN), which regulates the appointment of other parties to carry out tax withholding, collection, payment, and/or reporting.
This regulation was issued to improve the performance of tax revenue collection from foreign digital transactions in an efficient, effective, and accountable manner.
- FOREIGN DIGITAL TRANSACTIONS
MoFR Number 49 of 2026 defines Foreign Digital Transactions (Transaksi Digital Luar Negeri/TDLN) as the utilization or exchange of services and/or information conducted using computers, computer networks, and/or other electronic media, including:
- Digital Goods, such as software, multimedia, and/or electronic data; and
- Digital Services, such as software-based services.
This regulation governs the mechanism for collecting VAT on Foreign Digital Transactions utilized within the Indonesian customs territory.
- PARTIES INVOLVED
The parties involved in the SPP-TDLN mechanism include:
- SPP-TDLN Operator (Penyelenggara SPP-TDLN),
A legal entity designated under a Presidential Regulation of the Republic of Indonesia governing the SPP-TDLN
- Other Party (Pihak Lain),
A party directly involved in or facilitating transactions between the parties conducting the transaction, which is appointed by the Minister of Finance to carry out tax withholding, collection, payment, and/or reporting.
- Issuer (Penerbit),
A bank or non-bank financial institution that provides payment facilitation services for Foreign Digital Transactions.
The SPP-TDLN is operated by the SPP-TDLN Operator, involving the Issuer as the Other Party.
An Issuer may be appointed as an Other Party after completing the development and stabilization period of the SPP-TDLN.
- TIME OF VAT LIABILITY
VAT becomes due when the SPP-TDLN Operator confirms to the Other Party that the relevant Foreign Digital Transaction is subject to VAT
- COLLECTION MECHANISM
Foreign Digital Transaction Business Operators that have not been appointed as VAT collectors for PMSE transactions as regulated under MoFR Number 81 of 2024 will add VAT to the payment to be received for the Foreign Digital Transaction. The Other Party will collect VAT from the payment to be received by the Foreign Digital Transaction Business Operator by applying 11/111 to the price or payment to be received by the Business Operator, after confirmation by the SPP-TDLN Operator. If the transaction is conducted in a currency other than Rupiah, the amount used to calculate the VAT collected must be converted into Rupiah based on the exchange rate stipulated in the relevant Ministerial Decree.
For the VAT collected, the Other Party will issue a VAT collection document, which has the same status as a tax invoice. The document must at least contain the following information: Identity of the Issuer; Foreign Business Operator; Recipient/Utilizer; Date; Reference Number; Tax Base; and VAT collected.
- REFUND OF OVERPAYMENT / CORRECTION
For transactions that are cancelled or should not have been subject to VAT collection, the Collected Party may request a refund through the Other Party to be submitted to the SPP-TDLN Operator.
The SPP-TDLN Operator may submit an amended VAT return in accordance with the prevailing general tax procedures. Any resulting tax overpayment may be requested as a tax refund or credited against tax payable in the subsequent tax period.
- COMPENSATION FOR SERVICES (IMBAL JASA)
The SPP-TDLN Operator may receive Compensation based on the performance of the SPP-TDLN, taking into account the VAT deposited into the State Treasury. The amount of the compensation shall be determined by the Minister.
Payment of the Compensation for Services shall be made based on a reconciliation between the SPP-TDLN Operator and the State General Treasury Budget User (KPA BUN) for the Management of Special Transactions, which is responsible for the payment of the SPP-TDLN Compensation. The payment shall be supported by a receipt, Reconciliation Minutes, Statement of Absolute Responsibility, and Tax Invoice. The Compensation received by the SPP-TDLN Operator is subject to Income Tax and VAT. Based on the above process, payment of the Compensation may be made no later than five working days of the following month.
- PAYMENT AND REPORTING
The Other Party must remit the VAT collected to the SPP-TDLN Operator no later than seven days from the date of confirmation. The submission of data and remittance made by the Other Party shall be treated as the submission of the VAT Periodic Tax Return.
The SPP-TDLN Operator must remit the VAT collected to the Tax Deposit Account (KAP-KJS: 411618-100) no later than seven days after receipt and report the VAT Periodic Tax Return in accordance with the applicable provisions.
- CLOSING
MoFR Number 49 of 2026 establishes a new framework for collecting VAT on Foreign Digital Transactions through the implementation of the SPP-TDLN, involving the SPP-TDLN Operator and Other Parties in the collection, payment, and reporting of VAT. This mechanism is expected to improve the effectiveness and certainty of VAT collection on cross-border digital transactions utilized in Indonesia.
With the implementation of this regulation, businesses involved in Foreign Digital Transactions need to pay attention to their status and role within the SPP-TDLN mechanism, including their obligations regarding VAT collection, payment, reporting, and the issuance of VAT collection documents in accordance with the applicable regulations.
UPDATE OF ARTICLE 22 INCOME TAX COLLECTION BY MARKETPLACES
In addition to the provisions concerning VAT on Foreign Digital Transactions under MoFR Number 49 of 2026, there has been another update in tax regulations concerning the collection of Article 22 Income Tax (PPh Article 22) on transactions conducted through marketplaces. This is regulated under Minister of Finance Regulation of the Republic of Indonesia Number 37 of 2025 concerning the Appointment of Other Parties as Income Tax Collectors and the Procedures for the Collection, Payment, and Reporting of Income Tax Collected by Other Parties on Income Received or Earned by Domestic Merchants through Electronic Commerce Mechanisms.
Based on DGT Announcement Number PENG-46/PJ.09/2026, the implementation of Article 22 Income Tax collection by marketplaces as regulated under MoFR Number 37 of 2025 has been postponed until 31 October 2026, with the consideration of maintaining public purchasing power. Accordingly, based on the announcement, the Article 22 Income Tax collection will commence on 1 November 2026.
In connection with the postponement, the appointment of marketplaces as Article 22 Income Tax collectors that had previously been issued will be cancelled and new appointments will be made. Meanwhile, Article 22 Income Tax that has already been collected under the previous appointments will be refunded by the marketplaces to the merchants or domestic traders conducting transactions through the respective marketplaces.
For Tax Service Assistance, please contact:
Rani Widianti
T. (+6221) 2222-0200
Alvina Oktavia
T. (+6221) 2222-0200
E. alvina.oktavia@shinewing.id
