Compliance
Navigating Indonesia’s New Marketplace Tax Withholding Rule for Online Sellers
Indonesia’s Ministry of Finance is transforming how online merchants pay income tax: marketplaces will now withhold Income Tax Article 22 on behalf of domestic sellers starting August 1, 2026. Here's what sellers need to know and how to prepare.
By NomadicTax Research Team • 5-8 min read • August 17, 2026
## Overview of the New Regulation
As of **August 1, 2026**, Indonesia's Directorate General of Taxes (DGT) requires four major marketplaces — **Tokopedia, Shopee, Lazada, and Blibli** — to act as withholding agents for **Income Tax Article 22** on behalf of **domestic merchants** selling via their platforms. ([pajak.go.id](https://www.pajak.go.id/en/artikel/not-new-tax-dgt-collaborate-marketplaces-simplify-online-merchants-tax-mechanism?utm_source=openai))
While this shift does **not** introduce a new tax, it changes who is responsible for collecting and remitting it. Previously, each seller handled their own tax filings; now, the marketplace withholds automatically. ([pajak.go.id](https://www.pajak.go.id/en/artikel/not-new-tax-dgt-collaborate-marketplaces-simplify-online-merchants-tax-mechanism?utm_source=openai))
## Who’s Exempt? Small Sellers & Other Categories
Certain sellers are **exempt** from the withholding mechanism, including:
- Individual taxpayers with **annual gross turnover up to IDR 500 million (≈ US$30,700)**, provided they submit a **statement letter** in the marketplace-approved format. ([pajak.go.id](https://www.pajak.go.id/en/artikel/not-new-tax-dgt-collaborate-marketplaces-simplify-online-merchants-tax-mechanism?utm_source=openai))
- Ride-hailing delivery partners.
- Merchants with a **withholding exemption certificate**.
- Sellers of mobile credit and SIM cards;
- Licensed gold and gemstone sellers;
- Transactions involving land and building rights transfers. These remain taxed under current rules. ([pajak.go.id](https://www.pajak.go.id/en/artikel/not-new-tax-dgt-collaborate-marketplaces-simplify-online-merchants-tax-mechanism?utm_source=openai))
## Action Steps for Online Merchants
| What You Should Do | Why It’s Important |
|--------------------|-------------------|
| **Check your annual gross turnover** | If you're under IDR 500 million, apply for an exemption; otherwise, prepare for tax withheld by marketplace. |
| **Submit the required statement** | Your marketplace needs this to register you under the exemption scheme. |
| **Update your invoices and records** | Ensure you receive withholding receipts from marketplaces. The Article 22 withholding slips are considered official receipts. |
| **Review the marketplace terms and changes** | Marketplaces will provide FAQs and support — align your accounting and bank reconciliation accordingly. |
## Implications & Long-Term Effects
- **Reduced administrative burden**: Sellers no longer need to calculate and remit Income Tax Article 22 themselves (unless exempt). Marketplace handles withholding automatically. ([pajak.go.id](https://www.pajak.go.id/en/artikel/not-new-tax-dgt-collaborate-marketplaces-simplify-online-merchants-tax-mechanism?utm_source=openai))
- **Cashflow timing changes**: Receipt of net funds may decrease per transaction due to withholding — plan for it.
- **Fairer marketplace competition**: Aligns tax collection responsibilities between online and offline sellers. ([pajak.go.id](https://www.pajak.go.id/en/artikel/not-new-tax-dgt-collaborate-marketplaces-simplify-online-merchants-tax-mechanism?utm_source=openai))
## Example Scenarios
- **Seller A**: Annual turnover = IDR 400 million. They submit the statement letter and are exempt. No withholding occurs; Seller A handles income tax under their regular filings.
- **Seller B**: Annual turnover = IDR 600 million. They do **not** qualify for exemption. For each qualifying sale via Lazada, Marketplace will withhold Income Tax Article 22 — Seller B’s net receipts are reduced immediately by that amount.
## Tax Planning Tips
- Utilize **profits forecasting** to estimate impact on net cash flows post-withholding.
- For small sellers near the threshold, explore options like splitting turnover across legal entities (where lawful) to stay under the exemption line.
- Keep records of all withheld taxes — these are official receipts crucial for offsetting tax liabilities during income tax return.
## Compliance Checklist Before August 1, 2026
- Turnover review and statement submission (if exempt);
- Update financial record-keeping and invoicing to log marketplace withheld tax;
- Understand categories still exempt without need of turnover threshold (e.g. delivery partners);
- Coordinate with marketplace support teams to get clarity on processes.
By preparing ahead, online merchants can smoothly transition under this new withholding regime and avoid surprises in cash flow or tax filings.