The Directorate General of Taxes (DJP) under the Ministry of Finance has confirmed that the new marketplace tax withholding system will officially launch in July 2026. This marks a massive structural shift in how taxes are collected across the country's digital economy.

Instead of relying on online merchants to self-report and pay their own income taxes, the e-commerce platforms themselves (Penyelenggara Perdagangan Melalui Sistem Elektronik or PPMSE) will now act as the official tax collectors.

If your business operates in or partners with the digital economy, understanding these new mechanics before the July rollout is critical. Getting ahead of the change now is the best way to stay compliant and protect your cash flow.

 

The core shift: marketplace as the withholding agent

Under PMK 37/2025, major e-commerce platforms (like Shopee, Tokopedia, Lazada and others that meet transaction or traffic thresholds) now act as tax withholding agents. Instead of online merchants paying Income Tax Article 22 (PPh Pasal 22) themselves, these platforms will automatically deduct the tax directly from the merchants' sales before payout. Essentially, the government has shifted the tax collection burden from individual sellers to the big marketplaces.

 

Key takeaway

This is not a new or additional tax. It is a modification of the collection mechanism designed to bridge the compliance gap in the digital sector.

The tax rate is set at 0.5% of the gross turnover (gross transaction value before any deductions or platform fees). The tax is triggered the moment the platform receives payment from the buyer into its escrow account.

 

Segmentation: who is affected and how?

The practical application of PMK 37/2025 varies significantly depending on the legal structure of the merchant and their annual turnover:

1. Individual micro-MSMEs (Omzet ≤ IDR 500 million/year
Individual taxpayers (Orang Pribadi) whose cumulative annual turnover across the digital ecosystem does not exceed IDR 500 million enjoy a 0% withholding rate. However, this exemption is not automatic. Merchants must actively submit a formal turnover declaration form through the marketplace's seller centre

2. Small to medium businesses (Omzet > IDR 500 million to IDR 4.8 billion/year)
Once an individual merchant crosses the IDR 500 million threshold - or from the very first transaction for corporate entities (PT/CV) utilising the MSME scheme - the platform will automatically withhold 0.5%. Under Government Regulation No. 55 Year 2022 (PP 55/2022), this tax can be treated as final PPh, meaning the merchant’s tax liability for those specific transactions is fully settled at the point of sale

3. Large corporations (Omzet > IDR 4.8 billion/year)
For established companies using the standard corporate income tax rates (Article 17), the 0.5% withheld by the marketplace is non final. Instead, the electronic invoices generated by the platform serve as official Article 22 withholding tax certificates, which the company can claim as tax credits (kredit pajak) to reduce their ultimate corporate tax liability at the end of the fiscal year.

 

Exclusions to the rule

To avoid double taxation or disruption to specific sectors, PMK 37/2025 explicitly excludes certain transactions from automatic marketplace withholding, including:

• Logistical and courier services provided by ride-hailing/delivery partners
• Sales of cellular credits and prepaid cards
• Certified gold jewellery and precious metal transactions (which fall under separate tax regimes)
• Real estate transfers and land/building rights agreements.

While these transactions are exempt from platform withholding, merchants are still required to report and settle the corresponding taxes independently in their annual tax returns.

 

Operational imperatives for businesses

To adapt smoothly to the PMK 37/2025 framework, companies must review their digital operations:

• Data synchronisation: Merchants must ensure that their valid tax identification numbers (NPWP) or national identity numbers (NIK) are accurately updated across all registered seller accounts
• Multi-platform monitoring: The DJP has the capability to consolidate merchant data across different marketplaces. Companies operating multiple digital storefronts must meticulously track their aggregate turnover to avoid retroactive tax corrections or penalties
• Reconciliation processes: Finance teams must establish robust internal controls to reconcile monthly marketplace statement invoices against the company's internal accounting ledgers and eventual pre-populated data in the Coretax system.

How BDO can help your company

Complying with the rapidly evolving digital tax landscape requires technical precision and proactive planning. At BDO in Indonesia, our dedicated tax professionals are equipped to assist your business in seamlessly adapting to the requirements of PMK 37/2025.

Whether you are a growing digital brand or a marketplace platform managing complex withholding obligations, BDO provides the strategic tax advisory, compliance support and structural guidance necessary to mitigate risks and optimise your tax position in this new digital era. Contact our tax team today to secure your regulatory compliance.