New rules that apply in Indonesia from 25 September 2026 establish a VAT collection mechanism for certain cross-border transactions not covered by the VAT on Trade Through Electronic Systems (VAT PMSE) regime.
The VAT PMSE regime has applied to electronic supplies of digital goods and services by nonresident providers to Indonesian customers since 1 July 2020 in both B2B and B2C transactions. The Directorate General of Taxes (DGT) appoints foreign businesses that meet specified turnover and traffic thresholds as VAT collectors, requiring them to register and account for the Indonesian VAT (for prior coverage, see the article in the July 2022 issue of Indirect Tax News).
Minister of Finance Regulation No. 49 (MoF 49), issued in July 2026, provides the legal basis for the new mechanism, the Cross-Border Digital Transaction Tax Collection System (SPP-TDLN). The system applies to intangible goods and digital services supplied from outside Indonesia, including software, cloud computing, streaming services, digital subscriptions and mobile applications. It provides a collection mechanism for transactions outside the PMSE framework and is designed to prevent VAT from being collected twice on the same transaction. The DGT has confirmed that the SPP-TDLN does not apply to transactions for which VAT is already collected under the PMSE VAT collector mechanism.
MoF 49 is intended to broaden the tax base and increase state revenue by involving intermediaries in the VAT collection process, while preserving the pre-existing VAT PMSE framework.
The new mechanism may affect foreign digital suppliers, Indonesian purchasers and payment intermediaries by changing how VAT is verified, collected, documented and remitted for transactions outside the existing VAT PMSE regime.
Summary of Key Measures
The principal change under MoF 49 is the addition of payment intermediaries, including banks and other payment service providers to the VAT collection process. Under the pre-existing PMSE regime, VAT on cross-border digital supplies is collected by foreign service providers appointed as VAT PMSE collectors. During the pilot implementation of the new SPP-TDLN framework, the DGT appointed five Indonesian banks and one payment gateway as intermediaries. They must submit transaction details through the SPP-TDLN platform so that the VAT treatment can be determined before payment is authorised. VAT collected on taxable transactions must be remitted to the Indonesian State Treasury within seven days after confirmation.
Foreign businesses making cross-border digital supplies to Indonesian customers should map affected transactions, determine whether they fall outside the scope of the VAT PMSE regime and assess the potential effect of MoF 49 on sales processes and VAT compliance procedures. Payment service providers should confirm that their systems can support the new transaction-reporting and VAT collection requirements. Multinational businesses purchasing digital services from suppliers outside Indonesia should review the implications for VAT documentation, cash-flow and compliance obligations.
Businesses should monitor further DGT announcements on the appointment of additional payment intermediaries and any implementing guidance on transaction scope, system procedures and documentation.
Irwan Kusumanto
Octa Surya Fatra
Suwenny Leonardi
BDO in Indonesia
The VAT PMSE regime has applied to electronic supplies of digital goods and services by nonresident providers to Indonesian customers since 1 July 2020 in both B2B and B2C transactions. The Directorate General of Taxes (DGT) appoints foreign businesses that meet specified turnover and traffic thresholds as VAT collectors, requiring them to register and account for the Indonesian VAT (for prior coverage, see the article in the July 2022 issue of Indirect Tax News).
Minister of Finance Regulation No. 49 (MoF 49), issued in July 2026, provides the legal basis for the new mechanism, the Cross-Border Digital Transaction Tax Collection System (SPP-TDLN). The system applies to intangible goods and digital services supplied from outside Indonesia, including software, cloud computing, streaming services, digital subscriptions and mobile applications. It provides a collection mechanism for transactions outside the PMSE framework and is designed to prevent VAT from being collected twice on the same transaction. The DGT has confirmed that the SPP-TDLN does not apply to transactions for which VAT is already collected under the PMSE VAT collector mechanism.
MoF 49 is intended to broaden the tax base and increase state revenue by involving intermediaries in the VAT collection process, while preserving the pre-existing VAT PMSE framework.
The new mechanism may affect foreign digital suppliers, Indonesian purchasers and payment intermediaries by changing how VAT is verified, collected, documented and remitted for transactions outside the existing VAT PMSE regime.
Summary of Key Measures
| Description | Measures |
| VAT collection | The DGT appoints banks and payment service providers as intermediaries to collect VAT on cross-border digital transactions. |
| Transaction verification | Payment intermediaries must submit transaction details through the SPP-TDLN platform for validation before authorising payment. |
| VAT collection | Intermediaries collect the VAT on qualifying cross-border transactions. |
| VAT documentation | The VAT collection slip serves as the VAT invoice. |
| VAT remittance | Intermediaries remit the VAT collected to the Indonesian State Treasury within seven days after confirmation through SPP-TDLN. |
| Existing PMSE regime | MoF 49 complements the existing VAT PMSE regime and is intended to prevent duplicate VAT collection. |
The principal change under MoF 49 is the addition of payment intermediaries, including banks and other payment service providers to the VAT collection process. Under the pre-existing PMSE regime, VAT on cross-border digital supplies is collected by foreign service providers appointed as VAT PMSE collectors. During the pilot implementation of the new SPP-TDLN framework, the DGT appointed five Indonesian banks and one payment gateway as intermediaries. They must submit transaction details through the SPP-TDLN platform so that the VAT treatment can be determined before payment is authorised. VAT collected on taxable transactions must be remitted to the Indonesian State Treasury within seven days after confirmation.
BDO Perspective
Foreign businesses making cross-border digital supplies to Indonesian customers should map affected transactions, determine whether they fall outside the scope of the VAT PMSE regime and assess the potential effect of MoF 49 on sales processes and VAT compliance procedures. Payment service providers should confirm that their systems can support the new transaction-reporting and VAT collection requirements. Multinational businesses purchasing digital services from suppliers outside Indonesia should review the implications for VAT documentation, cash-flow and compliance obligations.Businesses should monitor further DGT announcements on the appointment of additional payment intermediaries and any implementing guidance on transaction scope, system procedures and documentation.
Irwan Kusumanto
Octa Surya Fatra
Suwenny Leonardi
BDO in Indonesia