Govt Issues New Regulation on E-Commerce Tax
Minister of Finance Sri Mulyani Indrawati on 31 December 2018 signed Regulation of Minister of Finance (PMK) Number 210/PMK.010/2018 on Tax Treatment of Trade Transactions through Electronic Systems (E-Commerce). The Regulation aims to facilitate the fulfillment of tax obligations for e-commerce business actors.
The Regulation states that every Marketplace Platform shall be listed as Taxable Entrepreneur (PKP) and shall have Taxpayer Identification Number (NPWP).
The Regulation also stipulates that merchants or service providers shall provide their NPWP to the Marketplace Platform.
In the event that the aforementioned merchant or service providers have not had NPWP, they shall: a. Register to obtain NPWP through NPWP registration application provided by Directorate General for Taxation or by the Marketplace Platform; or b. Provide their National Identification Number (NIK) to the Marketplace Platform.
“Merchants or service providers who deliver goods and/or services electronically through Marketplace Platform shall pay Income Tax in accordance with provisions of law,” Article 4 of the Regulation reads, adding that the merchants and service providers are obliged to collect, deposit and report Value Added Tax payable; and Value Added Tax and Sales Tax on Luxury Goods.
“The Value Added Tax payable is 10% (ten percent) of the Value of Taxable Goods (BKP) and/or Taxable Services (JKP),” Article 5 paragraph 2 of the Regulation reads. The Regulation also stipulates that the Sales Tax on Luxury Goods shall comply with provision for depositing and reporting of the tax in accordance with the provisions of law.
Furthermore, the Regulation emphasizes that the merchant and service providers shall report their VAT payment through the Marketplace platform in every VAT payment period.
The Regulation also states that Marketplace Platform shall report the recapitulation of trade transactions conducted by merchant and service providers in Marketplace Platform to the Directorate General for Taxation.
The Regulation further stipulates that Marketplace Platform conducting following activities: a. providing of Marketplace Platform services for merchants or service providers; b. submission of Taxable Goods and/or Taxable Services through the marketplace platform; and/or c. submission of Taxable Goods and/or Taxable Services, shall collect Value Added Tax for providing services and delivery Taxable Goods and/or Taxable Services and shall provide Tax Invoice in every VAT period.
The Regulation was promulgated by Director General for Legislation of Ministry of Law and Human Rights, Widodo Ekatjahjana, on 31 December 2018 and shall come into force on 1 April 2019.
Translated by: Ridwan Ibadurrohman
Edited by: Mia Medyana