Indonesian E-commerce Companies to Be Required to Apply for Tax Numbers

Updated on Monday 05th November 2018

E-commerce has become a very prolific industry in the Indonesian economy which is legislators have decided to regulate this sector, as until now no specific regulations existed for companies operating on the Internet. One of the first decisions of the government implies for e-commerce companies obtain tax identification numbers. If you want to set up an online business, our Indonesian company incorporation advisors can guide you.

The government plans on helping Indonesian e-commerce businesses

E-commerce is strong when it comes to the incomes generated by companies in Indonesia, yet weak from a regulatory point of view, which is why the government plans on helping online businesses with new laws which separate legitimate companies from those who commit scams. The first step would be the requirement for e-commerce businesses to obtain tax identification numbers, just like traditional companies.

At the moment, e-commerce companies in Indonesia are not regulated and the Ministry of Finance does not want to apply any taxes on specific digital services, which is why the alternative would be for these companies to pay the corporate tax at a reduced rate.

Our company formation agents in Indonesia can offer more information on the taxation of companies in this country.

Taxation of e-commerce companies in Indonesia

The Indonesian Tax Office has issued a statement through which it says that e-commerce companies will be required to apply for tax numbers (NPWP) in the future. These numbers will help sole proprietorships, micro companies and small and medium-sized businesses to file tax returns through self-assessments. In other words, online businesses will not be imposed a specific tax but will be taxed based on their income declarations.

The main goal of the Ministry of Finance is to encourage e-commerce businesses to apply for tax numbers and to conduct economic activities in a convenient way while respecting the tax regulations as all other companies. Also, the corporate income tax for these companies would be at the rate of 0.5%.

For information on how to open an e-commerce company in Indonesia or assistance in setting one up, please feel free to contact our company formation consultants.