Indonesia Rolls Out New VAT Collection System for Foreign Digital Sales
Indonesia has begun implementing SPP-TDLN, allowing designated payment intermediaries to collect VAT on qualifying overseas digital purchases.
Indonesia has begun implementing a new system that allows VAT on overseas digital purchases to be collected through designated payment intermediaries before the remaining payment reaches the foreign supplier.
The Directorate General of Taxes (DGT) announced 25 September 2026 as the implementation date for the system, known as SPP-TDLN. For foreign businesses selling software, subscriptions and other digital services to Indonesian customers, the change brings payment processing and VAT reconciliation into closer focus.
DGT has confirmed that the mechanism introduces neither a new tax nor a new VAT rate. However, businesses will need to understand which collection arrangement applies to their transactions as payment providers connect to the system.
How the new VAT collection mechanism works
Under SPP-TDLN, foreign merchants and service providers must account for Indonesian VAT in the amount payable by customers in Indonesia. A designated intermediary can then collect the VAT through the payment process, reducing the amount transferred to the supplier.
The framework is set out in Finance Minister Regulation No. 49/2026, which took effect on 20 July 2026, ahead of DGT’s September implementation announcement.
For transactions collected through SPP-TDLN, Article 7 specifies a calculation of 11/111 of the VAT-inclusive payment. For example, an eligible payment of IDR 111,000 would contain IDR 11,000 in VAT, leaving IDR 100,000 before payment-processing fees or other adjustments.
This distinction matters when reviewing settlement reports. The amount paid by the customer may differ from the amount received by the business because VAT has already been collected along the payment chain.
The scope is limited to qualifying digital transactions. As system operator Jalin explains in its SPP-TDLN guidance, the mechanism does not make every overseas payment taxable. Ordinary money transfers and remittances do not automatically become subject to VAT.
Existing PMSE VAT collectors retain their arrangements
Foreign businesses already appointed as VAT collectors under Indonesia’s electronic commerce, or PMSE, regime continue using their existing collection arrangements.
In its announcement to foreign merchants and service providers, DGT states that SPP-TDLN does not apply to transactions where VAT has already been collected through the PMSE mechanism. The two systems will operate alongside each other.
For an appointed PMSE collector, the announcement therefore does not justify switching off its existing VAT collection process. Instead, the practical priority is confirming that payment providers can recognise transactions already taxed under PMSE and prevent a second collection.
Collection is still being rolled out across payment channels
The implementation date does not mean every bank, card network and payment provider is fully connected.
On 28 September, DDTC News reported comments from PT Jalin Pembayaran Nusantara confirming that the platform was live, but VAT collection was not yet fully operational. Jalin said further support and system adjustments from international card networks were needed.
According to that report, the initial implementation involved state-owned banks in the Himbara group and LinkAja. Other banks and financial technology companies were undergoing development and technical integration.
Businesses should consequently confirm the position with each payment provider they use. The platform’s launch alone does not establish how a particular transaction will be processed.
What foreign digital businesses should review
For businesses selling into Indonesia, the immediate operational issue is matching the customer’s payment, the VAT collected and the amount ultimately received.
A practical review should cover four areas:
- Checkout pricing: Confirm that the amount charged to Indonesian customers accounts for applicable VAT, and that pricing assumptions match the collection method used.
- PMSE collection status: Where VAT is already collected under PMSE, establish how the payment provider identifies those transactions and handles any duplicate collection.
- Invoices and VAT documents: Check how commercial invoices relate to the VAT collection documents generated through the payment channel, including the transaction references needed to match them.
- Settlement reconciliation: Separate VAT collections from processing fees, foreign-exchange differences and refunds when explaining the difference between gross customer payments and net receipts.
These checks are particularly relevant for recurring subscriptions, where the same billing arrangement may generate repeated discrepancies if the payment and accounting systems are configured differently.
They also help businesses assess the commercial impact. Even without a new VAT rate, an amount collected before settlement can affect the supplier’s receipts if its pricing has not properly accounted for the tax.
Businesses reviewing their wider digital compliance obligations can also consult our guide to PSE registration in Indonesia, which explains electronic-system registration for platforms, apps and other online services.
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Businesses reviewing their Indonesian operations can work with Emerhub on local bookkeeping, tax reporting and ongoing compliance. Learn more about our tax and accounting services in Indonesia to discuss the support your business needs.
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