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Bali Zero handles visas, company setup, tax and property compliance in Indonesia. Ask us directly on WhatsApp.
Chat with Bali Zero on WhatsAppIndonesia's Directorate General of Taxes (DGT) has confirmed that the withholding of Article 22 Income Tax (PPh Article 22) by designated electronic marketplace platforms will commence on November 1, 2026. The implementation follows a formal postponement that delayed the original rollout until October 31, 2026, with the November 1 date now locked as the operational start.
The legal framework underpinning the mechanism is Minister of Finance Regulation No. 37 of 2025 (PMK 37/2025), titled '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.' Under this regulation, the withholding obligation falls on the marketplace platforms themselves, not on individual sellers. Platforms are required to collect the tax, remit it to the State Treasury, and file reports with the DGT.
Four marketplace operators have been formally designated as withholding agents under the current framework: PT Global Digital Niaga Tbk (operating as Blibli), PT Shopee International Indonesia, PT Tokopedia, and PT Ecart Webportal Indonesia (operating as Lazada). These four platforms together account for a significant share of Indonesia's formal e-commerce transaction volume. Other marketplace operators are not yet listed under the designation.
The applicable withholding rate is 0.5% of gross turnover from eligible transactions, calculated on amounts excluding Value Added Tax (VAT) and Luxury Goods Sales Tax (LGST). To illustrate: a seller recording IDR 10 million in gross turnover in a given settlement period would have IDR 50,000 withheld and remitted to the DGT on their behalf. Sellers will be able to track the deduction through their transaction or settlement records within the respective marketplace dashboards.
Critically, PMK 37/2025 does not create a new category of income tax. It changes the collection mechanism — shifting responsibility from self-reporting sellers to platform-level automatic withholding. The tax treatment of the withheld amount depends on the seller's applicable tax regime: for some, it constitutes a final tax obligation; for others, it represents an advance payment that is creditable against their annual income tax liability. The distinction has material implications for sellers operating under different business structures and tax registration statuses.
This regulation is a structural shift in how Indonesia enforces tax compliance in the digital economy — and it lands directly on the revenue streams of anyone selling through Indonesia's top four marketplaces. For our clients operating PT PMA or PT structures with active e-commerce channels on Tokopedia, Shopee, Blibli, or Lazada, November 1 is not an administrative footnote: it is the date your settlement payouts change.
The 0.5% rate is modest, but the real exposure lies in how the withheld tax interacts with your existing tax position. If you're under the final tax regime for SMEs (UMKM), the deduction may close out your obligation cleanly. If you're on a standard corporate or individual tax regime, this becomes an advance payment you need to reconcile at year-end — which means your bookkeeping and tax credit management must be airtight from November onward.
For expats running informal or undeclared online selling activity through Indonesian platforms, this regulation introduces automatic visibility to the DGT. The platform reports; the DGT sees the numbers. That is a meaningful compliance signal for anyone who has not yet formalized their business structure in Indonesia.
Sellers transacting through Blibli, Shopee, Tokopedia, or Lazada should expect a line item deduction of 0.5% of gross turnover — excluding VAT and LGST — beginning with settlements processed on or after November 1, 2026. The deduction is automatic and platform-executed; no action is required to trigger it, but sellers must ensure their marketplace accounts reflect accurate tax identification data (NPWP) to avoid misattribution or complications during annual reconciliation. For entities on a standard corporate income tax regime, the withheld PPh 22 will function as a prepayment (kredit pajak), reducing the final tax payable at year-end — provided proper documentation is maintained. Sellers under the UMKM final tax regime (0.5% of gross revenue) should verify with their tax advisor whether the marketplace deduction fully satisfies or merely approximates their monthly obligation, given that the base and timing of calculation may differ slightly. Sellers operating across multiple platforms should note that only the four designated platforms are currently obligated to withhold; transactions on non-designated platforms remain under the seller's self-reporting responsibility.
First, confirm your NPWP (Tax Identification Number) is correctly registered across all four designated marketplace accounts before October 31, 2026 — mismatched or missing data can create reconciliation problems. Second, brief your accountant or tax advisor on PMK 37/2025 and model the impact on your monthly cash flow, particularly if your margins are thin and a 0.5% gross deduction is material. Third, determine whether the withheld amount is final or creditable under your specific tax regime — this affects whether you need to adjust estimated annual tax payments. Fourth, if you are currently selling without a formal Indonesian business entity or NPWP, treat November 1 as a hard deadline to assess your compliance exposure, as platform reporting creates a direct data trail to the DGT. Reach out to Bali Zero for a structural review if your setup is not yet formalized.