On 28 October 2026, the Indonesian Directorate General of Taxes (DGT) published guidance clarifying the party responsible for remitting the 0.5% final income tax (PPh Final) on marketplace transactions. This measure, rooted in Article 4(2) of the Income Tax Law and implemented via Minister of Finance Regulation (PMK), aims to simplify tax collection from the burgeoning digital economy. The regulation designates marketplace operators as the withholding agents, obligating them to deduct and remit the tax on behalf of individual merchants whose annual turnover falls below the VAT threshold. Effective immediately, the rule applies to gross transaction values processed through registered electronic platforms.
Key Takeaways
- Withholding Obligation Shifted to Platforms: Marketplace operators must now automatically deduct 0.5% from gross sales payouts to individual sellers, removing the compliance burden from micro-entrepreneurs.
- Scope Limited to Non-VAT Registered Merchants: The provision targets individual traders with annual turnover under IDR 4.8 billion; corporate sellers and VAT-registered entities remain subject to standard corporate income tax regimes.
- Real-Time Reporting via Coretax Integration: Withholding data flows directly into the Coretax administration system, enabling real-time monitoring and reducing leakage in the digital transaction ecosystem.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement