Tax Planning
Indonesia’s Marketplace Withholding Model: What Online Sellers Need to Know by August 1, 2026
Indonesia now requires marketplaces to collect income tax (Article 22) from domestic merchants starting August 2026—an important shift in digital tax collection.
By NomadicTax Research Team • 5-8 min read • August 15, 2026
## What’s New
Starting **August 1, 2026**, Indonesia’s **marketplaces** (e.g. Tokopedia, Shopee, Lazada, Blibli) are legally required to **withhold Income Tax Article 22** from domestic merchants’ sales on their platforms. The change is driven by **Regulation of the Ministry of Finance Number 37 of 2025** and reflects a broader push to streamline digital tax compliance. ([pajak.go.id](https://www.pajak.go.id/index.php/en/artikel/not-new-tax-dgt-collaborate-marketplaces-simplify-online-merchants-tax-mechanism?utm_source=openai))
## Who’s Affected
- **Domestic merchants** selling goods or services via participating marketplaces.
- Marketplaces have to be appointed as tax collectors and set up systems to compute, withhold, remit, and report the tax. Non-compliance or lack of coordination could lead to operational and financial disruptions. ([pajak.go.id](https://www.pajak.go.id/index.php/en/artikel/not-new-tax-dgt-collaborate-marketplaces-simplify-online-merchants-tax-mechanism?utm_source=openai))
## Action Steps for Online Sellers
- **Review your tax status**: Determine if you meet the turnover thresholds and other criteria under Article 22.
- **Check the marketplace’s policies**: Ensure they have integrated the withholding tax mechanism and are informing you how much is withheld per transaction.
- **Invoice and document properly**: Maintain accurate sales records to reconcile after withholding.
- **Update budgeting**: Project net revenue considering the withheld portion—this could affect cash flow especially for small sellers.
- **Consult a tax professional**: Help clarify whether you have additional obligations (e.g., corporate income tax, VAT) beyond the withholding.
## Example Scenario
A seller on Shopee in Java sells IDR 20,000,000 in July. From August 1, Shopee withholds the relevant percentage under Article 22 (e.g. 0.5%–?). Suppose the rate is 0.3%. Shopee withholds IDR 60,000 from each applicable transaction, deposits this directly with DGT. The seller gets net proceeds (sales minus all withholdings). Documentation from Shopee must include statements showing total sales and total tax withheld to support seller’s filing.
## Implications & Considerations
- **Cash flow impact** for sellers; advance planning is essential.
- **Compliance and reporting burden** shifts partly from seller to marketplace—reducing seller burden but increasing need for transparency and accurate platform systems.
- The measure aligns with fairness—online-selling merchants compete with offline retailers who often pay Article 22 or equivalent withholding.
**Conclusion:** This isn’t a new tax—just a new way of collecting what's owed. From August 2026, online sellers should ensure they are being withheld correctly, keep records, and plan accordingly for the shift in tax remittance.