Business · Economy · 9 hrs ago
Indonesia expands collection of VAT on foreign digital purchases
Indonesia is expanding how it collects VAT on foreign digital purchases through a system called SPP-TDLN.
The tax office says this is not a new tax: foreign digital products are already subject to VAT, but customers previously had to pay it themselves.
Since 2020, the existing PMSE system has had designated digital businesses collect VAT directly, including services such as Netflix and Google.
Under SPP-TDLN, banks and other financial institutions collect the VAT through selected payment systems and send it to the state.
The system began on 25 September 2026 with six appointed institutions, including five banks and the LinkAja fintech company.
It applies to purchases such as cloud services, film streaming, AI services and online games that are not already covered by PMSE, with an 11% VAT charge when customers use those payment systems.
The tax office says a purchase will not be taxed twice: transactions already taxed through PMSE will be excluded from SPP-TDLN.
Indonesia is expanding collection of value-added tax on foreign digital purchases through a new collection system involving banks and fintech companies.
The system, called SPP-TDLN, began operating on 25 September 2026.
It applies to foreign digital products not already covered by Indonesia’s existing electronic-commerce VAT scheme, including cloud services, streaming, AI services and online games.
The tax rate is 11% when customers use the payment systems of designated collectors.
Indonesia’s tax authority says the system does not create a new tax or charge VAT twice on the same transaction.
- Who
- Indonesia’s Directorate General of Taxes is expanding collection through banks and fintech companies.
- What
- The SPP-TDLN system collects VAT on some purchases of foreign digital products.
- When
- It began on 25 September 2026. The expansion was reported on 9 November 2026.
- Where
- Indonesia.
- Why
- The system provides a different way to collect VAT on foreign digital transactions. The tax authority says those products were already subject to VAT.
This story does not have two clearly opposing sides.
Indonesia began applying VAT to digital transactions through its PMSE scheme.
The SPP-TDLN VAT collection scheme took effect, initially naming six collectors.
Detik reported that collection through SPP-TDLN would be expanded to include private banks and fintech companies.
- VAT rate
- 11%
- SPP-TDLN start date
- 25 September 2026
- Initial designated collectors
- Six institutions: five banks and LinkAja
- Existing PMSE collectors
- About 260
- Products covered
- Foreign digital products outside PMSE, including cloud services, streaming, AI services and online games
What people are saying
This policy is not a new tax, does not change the VAT rate and is not intended to collect tax on all foreign transactions.
The objects are the same, both are subject to VAT, but they are outside PMSE.
We ensure that there will be no double collection, because anything already collected under PMSE will not be collected again under SPP-TDLN.