The regulation introduces income tax withholding requirements for both domestic and foreign e-commerce and online marketplace operators.
Indonesia’s Ministry of Finance announced Regulation No. 37 of 11 June 2025 (PMK37/2025) on 14 July 2025, which introduces income tax withholding requirements for e-commerce and online marketplace operators.
Under the regulation, both domestic and foreign platform operators must act as withholding agents for transactions by domestic traders selling goods or services in Indonesia.
The key provisions are:
- Domestic operators must comply with the regulation’s general provisions.
- Foreign operators are subject to specific conditions based on their transaction volume or platform traffic over a 12-month period, which will be determined by the Minister.
- Platform operators will be notified if appointed as tax agents and must comply starting from the following month.
- Domestic traders, including individuals and companies, are required to provide information to platform operators acting as withholding agents, except when their annual revenue is below IDR 500 million.
- A 0.5% tax on gross turnover, excluding VAT and luxury goods sales tax, must be withheld and remitted monthly. This withheld tax serves as an advance payment of income tax for domestic traders.
Regulation No. 37 took effect on 14 July 2025.
