On 14 July 2026, the Indonesian Government, through the Minister of Finance, issued Minister of Finance Regulation No. 49 of 2026 on Procedures for the Collection of Value-Added Tax on Cross-Border Digital Transactions through the Cross-Border Digital Transaction Tax Collection System (“MOF Regulation No. 49/2026”).
MOF Regulation No. 49/2026 is intended to improve the collection of state revenue from cross-border digital economic activities that have not previously been subject to optimal tax collection. It implements Presidential Regulation No. 68 of 2025 on the Cross-Border Digital Transaction Tax Collection System, which provides the legal basis for the establishment of the Cross-Border Digital Transaction Tax Collection System (Sistem Pemungutan Pajak atas Transaksi Digital Luar Negeri or “SPP-TDLN”).
In practical terms, MOF Regulation No. 49/2026 introduces a mechanism under which Value-Added Tax (“VAT”) on certain purchases of digital products and services from overseas suppliers may be collected through the payment channel. This means that the Government may involve banks or non-bank payment institutions in collecting VAT when they facilitate payments for cross-border digital transactions.
Transactions Covered by the New System
VAT collection through the SPP-TDLN applies to the use in Indonesia territory of:
- intangible taxable goods from outside the Indonesian customs territory in the form of digital goods; and/or
- taxable services from outside the Indonesian customs territory in the form of digital services.
Digital goods are broadly defined as intangible goods in electronic or digital form, including software, multimedia products and electronic data. Digital services generally include services delivered through the internet or an electronic network, which are automated or involve only minimal human intervention and cannot be provided without information technology. Accordingly, the new mechanism may apply, for example, to the purchase or subscription of software, cloud-based services, digital content, databases, online platforms and other digital products or services supplied by overseas businesses for use in Indonesia.
The collection, payment and reporting of VAT under this mechanism are carried out through the SPP-TDLN, which is operated by a designated legal entity acting as the SPP-TDLN Operator.
Introduction of “Other Parties” as VAT Collectors
One of the key features introduced by MOF Regulation No. 49/2026 is the involvement of an “Other Party” (Pihak Lain) in collecting VAT on cross-border digital transactions. An Other Party is a person or entity that is directly involved in, or facilitates, a transaction and is appointed by the Minister of Finance to withhold, collect, pay and/or report taxes. For purposes of the SPP-TDLN, a party that may be appointed as Other Parties are “Issuers” (Penerbit), consisting of banks or non-bank institutions that provide services facilitating payments for cross-border digital transactions undertaken by users of digital goods or services.
The Minister of Finance delegates the authority to appoint an Issuer as an Other Party to the Director General of Taxes. Once appointed, the Issuer becomes responsible for collecting VAT when facilitating a payment.
Before an Issuer may formally be appointed, it must complete a system-development period and a stabilisation period. The stabilisation period includes testing to ensure that the Issuer’s system can be securely and properly interconnected with the SPP-TDLN. The results may also be reviewed through a regulatory sandbox process before the appointment is made. This mechanism effectively moves the point of VAT collection to the payment layer. As a result, VAT may still be collected even where the overseas digital supplier itself has not been appointed to collect Indonesian VAT.
The SPP-TDLN mechanism applies to transactions whose VAT is collected by a party other than an electronic-commerce business that has already been appointed as an Indonesian VAT collector. Therefore, transactions on which VAT has already been collected under the existing electronic-commerce VAT mechanism should not be subject to a second collection through the SPP-TDLN.
When VAT Becomes Payable
VAT becomes payable when the SPP-TDLN Operator confirms to the Other Party that a particular cross-border digital transaction is subject to VAT. The Other Party is required to collect VAT when that confirmation is issued. In practice, the Issuer submits the relevant transaction data to the SPP-TDLN, and the system determines whether the transaction is subject to VAT.
Calculation of VAT
The overseas digital business must take VAT into account in the price or payment payable by the Indonesian user.
The VAT collected is calculated using the following formula:
11/111 × the transaction value inclusive of VAT.
Where a cross-border digital transaction is denominated in a foreign currency, the VAT amount must be converted into Indonesian rupiah using the exchange rate stipulated by the Minister of Finance and applicable when the SPP-TDLN confirms that the transaction is subject to VAT. Transactions that benefit from a VAT exemption or a VAT-not-collected facility under applicable tax regulations are not subject to VAT collection through the SPP-TDLN.
Transaction Data under the SPP-TDLN
The operation of the SPP-TDLN requires two broad categories of data:
- data relating to cross-border digital transactions; and
- domestic transaction data used to map and analyse cross-border digital transactions, including fund transfers and remittances.
The Other Party must submit the relevant data to the SPP-TDLN Operator for confirmation no later than the time at which the Other Party authorises payment for the cross-border digital transaction.
The data submitted may include:
- the transaction reference number;
- the transaction amount and currency;
- the name and country code of the overseas business;
- the type, date and time of payment;
- information concerning the relevant Other Party; and
- information concerning the originating and receiving financial institutions.
Certain additional information may also be submitted where available in the relevant system. Sensitive information, including certain bank-account data, is submitted in the form of a value generated through a hash function. The Directorate General of Taxes is authorised to access the relevant data through the SPP-TDLN Operator. The SPP-TDLN Operator is also responsible for the security, confidentiality and protection of the data processed through the system.
VAT Collection Document
The Other Party must issue a document evidencing the VAT collection. This document must contain, at a minimum:
- the identity of the Other Party;
- the identity of the overseas digital business;
- the identity of the user of the digital goods and/or services;
- the date of VAT collection;
- the transaction reference number;
- the taxable amount; and
- the amount of VAT collected.
The document may take the form of a billing statement or another similar document, provided that it contains the required information. It is treated as a specific document having the same status as a tax invoice.
Cancellation, Incorrect Collection and Refunds
Where a transaction is cancelled, either partially or entirely, or where VAT has been collected through the SPP-TDLN on a transaction that should not have been subject to such collection, the party from whom VAT was collected may request a refund. The refund request must be submitted to the SPP-TDLN Operator through the relevant Other Party. The Other Party and/or the SPP-TDLN Operator will then process the request and make the necessary corrections to the relevant VAT documentation and reporting.
The regulation also confirms that, where VAT on the use of overseas digital goods or services has not been collected by an Other Party, the transaction remains subject to VAT under the generally applicable Indonesian tax regulations. The absence of collection through the SPP-TDLN therefore does not automatically eliminate the underlying VAT obligation.
Service Fee for the SPP-TDLN Operator
The SPP-TDLN Operator is entitled to receive a service fee for operating the system. The service fee is based on the performance of the SPP-TDLN and takes into account the amount of VAT paid into the State Treasury. The amount of the service fee will be determined by the Minister of Finance.
Conclusion
Overall, the MOF Regulation No. 49/2026 represents a significant development in Indonesia’s taxation of the digital economy. Rather than relying exclusively on overseas digital suppliers to collect Indonesian VAT, the regulation allows VAT to be collected through the financial institutions and payment channels used to complete cross-border digital transactions.
For Indonesian customers having residency in the Indonesian territory purchasing digital goods or services from overseas suppliers, MOF Regulation No. 49/2026 may change how VAT appears and is documented in the payment process. VAT may be collected by the bank or payment institution facilitating the payment rather than appearing solely on the invoice issued by the overseas supplier. For banks and non-bank payment institutions, the regulation may require significant system development, data-processing and compliance arrangements. Relevant institutions may need to establish procedures for transaction identification, real-time data transmission, VAT collection, the issuance of collection documents, settlement, reporting, correction and refund processing.
As for the overseas digital businesses serving Indonesian customers, they should review their pricing and payment arrangements to ensure that VAT is appropriately reflected in the amount payable by Indonesian users. Businesses that have already been appointed as Indonesian electronic-commerce VAT collectors should also ensure that their systems can identify transactions on which VAT has already been collected, in order to minimise the risk of duplicate collection.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
