Since July 1, 2026, major marketplace providers in Indonesia — including Shopee, Tokopedia, and TikTok Shop — have officially begun withholding Article 22 Income Tax from online sellers on their platforms. This is the implementation of MoF Regulation Number 37 of 2025, stipulated June 11, 2025 and taking effect after the Directorate General of Taxes (DGT) issued a Director General's Decision formally designating these marketplaces as tax collectors.
Who qualifies as a "Domestic Trader"
MoF Reg. 37/2025 defines the sellers subject to withholding as an individual or entity meeting two criteria at once:
- Receives income using a bank account or similar financial account, and
- Transacts using an Indonesian IP address, or a phone number with the Indonesian country code (+62)
This criteria also covers delivery/expedition companies and insurance companies transacting through the same marketplace.
Rate and when the tax is owed
The Article 22 income tax rate withheld is 0.5% of gross turnover as stated in the billing document, excluding VAT and Luxury Sales Tax. This tax becomes due when payment is received by the marketplace — not when goods are shipped or received by the buyer.
Technically, money paid by the consumer is first held in the marketplace's escrow account, then transferred to the seller once the transaction is complete. Tax withholding occurs at the point the marketplace receives payment, so the funds that ultimately reach the seller's account are already net of Article 22 income tax.
Who's exempt from withholding
Not every seller is automatically subject to withholding. Article 10 of MoF Reg. 37/2025 exempts:
- Individual sellers with turnover up to Rp500 million per year — provided they submit a stamped statement letter to the marketplace declaring their turnover hasn't exceeded that threshold.
- Delivery/expedition services by technology-based application partners.
- Sellers holding a Tax Exemption Certificate (SKB) for income tax withholding/collection.
Important to note: transactions exempt from marketplace withholding remain taxable under applicable rules — this exemption is only about who does the collecting, not a full tax exemption.
A simple worked example
Mrs. Sari sells through two different marketplaces. During March 2026, her turnover crossed Rp500 million, so she was required to submit a new statement before the end of that month. Starting April 2026, withholding applies: if her turnover on Marketplace X is Rp50 million and on Marketplace Y is Rp25 million in a given tax period, the Article 22 income tax withheld is 0.5% × Rp50 million = Rp250,000 on Marketplace X, and 0.5% × Rp25 million = Rp125,000 on Marketplace Y.
How the withheld tax is accounted for
How the withheld Article 22 income tax is treated depends on which tax scheme the seller uses:
- Sellers under the Final MSME Income Tax scheme (GR 20/2026) — this withholding becomes part of the Final Income Tax settlement owed. If there's a difference between the Final Income Tax actually owed and the Article 22 already withheld, the seller must self-remit the shortfall.
- Sellers under the general income tax scheme (bookkeeping) — this withholding becomes a tax credit factored into the Annual Tax Return, reducing the income tax still owed at year-end.
For sellers, the electronic invoice issued by the marketplace serves as valid proof of tax withholding — this document needs to be archived since it forms the basis for crediting or settling Final Income Tax.
Obligations on the marketplace's side
Beyond withholding, designated marketplaces are also required to: remit the withheld Article 22 income tax to the state treasury, report it via the Unification Withholding Periodic Tax Return, and submit seller, transaction, invoice, and withheld tax amount data to the DGT. Failure to meet these obligations can result in sanctions under both tax law and electronic system provider regulations.
What online sellers should do now
- Check your turnover status. If you're still under Rp500 million per year, promptly prepare and submit a stamped statement letter to every marketplace where you sell.
- Make sure your NPWP/NIK and correspondence address are correct on your seller account — incorrect data can hamper the withholding and reporting process.
- Archive every electronic invoice from the marketplace as withholding evidence — this is an essential document when filing your Annual Tax Return or calculating your Final Income Tax settlement.
- Monitor your cumulative turnover throughout the year. Once you cross Rp500 million, you're required to notify the marketplace no later than the end of the month that threshold is exceeded.
- Reconcile regularly between the total Article 22 income tax withheld throughout the year and your Final Income Tax or income tax liability — so no underpayment slips through at annual filing time.
For many digital MSMEs, this change actually simplifies administration — you no longer need to remit Article 22 income tax yourself every month. But the responsibility to understand the mechanism, keep documentation complete, and reconcile at year-end remains entirely in the seller's hands.
Disclaimer: This article was prepared as general information as of July 7, 2026 and does not constitute tax advice for any specific case. Tax regulations are subject to change. For guidance on your specific business situation, please consult the Sentary Consulting team or a registered tax consultant.