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The rise of the transaction model through e-commerce has resulted in the urgency of a tax governing regulation that is specifically able to facilitate e-commerce business actors.
In order to address this issue, the Government issued Finance Minister Regulation No. 210 of 2018 on Tax Treatment of E-Commerce Transactions (“PMK 210/2018”) which will take effect on April 1st 2019.
The scope regulated in PMK 210/2018 on tax charge of e-commerce transactions covers:
a. Value added tax, Sales Tax on Luxury
Goods, and Income Tax on Transaction
in Autonomous Region; and
b. Import Duty and/or Import Taxes (PDRI)
for the Import of Goods.
Marketplace Platform Providers1 must own a taxpayer identification number (“NPWP”) and must be considered as a taxable entrepreneur. The obligation to be a taxable entrepreneur also apply to the Marketplace Platform Providers, despite meeting the criteria of small-scale entrepreneur as stipulated in Finance Minister regarding the Limit of Added Value Tax on Small-Scale Entrepreneur.
The imposition of import duty and import taxes (PDRI) for the import of goods will adhere to the following requirements under the provisions of PMK 210/2018:
a. Transactions conducted through Platform Marketplace Providers that are registered in Director General Customs and Excise;
b. Delivery by postal service providers; and
c. Has customs value of up to Free on Board (FOB) USD1.500 (fifteen hundred
thousand United States Dollar).
If the transaction of import goods is conducted through a Marketplace Platform Provider, then it will have to comply to the laws that regulate import of goods, such as:
a. Possess customs value of more than FOB amounting USD1.500 (fifteen hundred thousand United States Dollar); or
b. Does not use a Delivery Duty Paid (DDP)2 scheme.
Other than Marketplace Platform Providers, PMK 210/2018 also regulate provisions on merchants or service providers. Pursuant to PMK 210/2018, Merchants or service provider shall provide their NPWP to the Marketplace Platform Provider. If the merchant or service provider does not have a NPWP , they shall3:
a. Register themselves to obtain an NPWP
through a NPWP registration application provided by the Directorate General for Taxation or by the Marketplace Platform; or
b. The Merchants or service provider shall provide their National Identification Number (NIK) to the Marketplace Platform Provider.
Taxable Merchants or service providers that conduct delivery of taxable goods and/ or taxable services electronically through a Marketplace Platform Provider shall collect, transfer and report and make a tax invoice of4 :
a. The payable Value Added Tax, which is
10% (ten percent) of the Value of Taxable
Good and/or Taxable Services; or
b. Value Added Tax and Sales Tax on Luxury Goods for which procedures of payment and report comply with the applicable
<1> An individual, company or a permanent establishment having its address or domicile or run business in the Customs Area, that provides a platform in the form of a Marketplace, including Over the Top in the field of transportation in the Customs Area, Article 1 number 5 PMK 210/2018
<2> Part of the international business terminology that insert import duty and/or import taxes (PDRI) into the element of import goods that are listed on Platform, Article 1 number 17 PMK 210/2018.
<3> Article 3 paragraph (7), PMK 210/2018
<4> Article 5, PMK 210/2018