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Neither party may assume that he or she should act or cease to act or choose to act on a particular matter based on this information without seeking advice from professionalsin the field of law in accordance with certain facts and circumstances it faces.
The rise of the transaction model through e-commerce has resulted in the urgency of a tax governing regulation that is specifically able to facilitate e-commerce business actors.
In order to address this issue, the Government issued Finance Minister Regulation No. 210 of 2018 on Tax Treatment of E-Commerce Transactions (“PMK 210/2018”) which will take effect on April 1st 2019.
The scope regulated in PMK 210/2018 on tax charge of e-commerce transactions covers:
a. Value added tax, Sales Tax on Luxury
Goods, and Income Tax on Transaction
in Autonomous Region; and
b. Import Duty and/or Import Taxes (PDRI)
for the Import of Goods.
Marketplace Platform Providers1 must own a taxpayer identification number (“NPWP”) and must be considered as a taxable entrepreneur. The obligation to be a taxable entrepreneur also apply to the Marketplace Platform Providers, despite meeting the criteria of small-scale entrepreneur as stipulated in Finance Minister regarding the Limit of Added Value Tax on Small-Scale Entrepreneur.
The imposition of import duty and import taxes (PDRI) for the import of goods will adhere to the following requirements under the provisions of PMK 210/2018:
a. Transactions conducted through Platform Marketplace Providers that are registered in Director General Customs and Excise;
b. Delivery by postal service providers; and
c. Has customs value of up to Free on Board (FOB) USD1.500 (fifteen hundred
thousand United States Dollar).
If the transaction of import goods is conducted through a Marketplace Platform Provider, then it will have to comply to the laws that regulate import of goods, such as:
a. Possess customs value of more than FOB amounting USD1.500 (fifteen hundred thousand United States Dollar); or
b. Does not use a Delivery Duty Paid (DDP)2 scheme.
Other than Marketplace Platform Providers, PMK 210/2018 also regulate provisions on merchants or service providers. Pursuant to PMK 210/2018, Merchants or service provider shall provide their NPWP to the Marketplace Platform Provider. If the merchant or service provider does not have a NPWP , they shall3:
a. Register themselves to obtain an NPWP
through a NPWP registration application provided by the Directorate General for Taxation or by the Marketplace Platform; or
b. The Merchants or service provider shall provide their National Identification Number (NIK) to the Marketplace Platform Provider.
Taxable Merchants or service providers that conduct delivery of taxable goods and/ or taxable services electronically through a Marketplace Platform Provider shall collect, transfer and report and make a tax invoice of4 :
a. The payable Value Added Tax, which is
10% (ten percent) of the Value of Taxable
Good and/or Taxable Services; or
b. Value Added Tax and Sales Tax on Luxury Goods for which procedures of payment and report comply with the applicable
laws.
<1> An individual, company or a permanent establishment having its address or domicile or run business in the Customs Area, that provides a platform in the form of a Marketplace, including Over the Top in the field of transportation in the Customs Area, Article 1 number 5 PMK 210/2018
<2> Part of the international business terminology that insert import duty and/or import taxes (PDRI) into the element of import goods that are listed on Platform, Article 1 number 17 PMK 210/2018.
<3> Article 3 paragraph (7), PMK 210/2018
<4> Article 5, PMK 210/2018
