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Ecommerce

Indonesia retracts ecommerce regulation

Monday 1 April 2019 | 01:54 PM CET

Indonesia has retracted its new rules requiring ecommerce sellers to share data with tax authorities to avoid further confusion, Reuters reports.

Initially, the rules stated that all operators of online marketplaces would have to detail each seller’s turnover and share data with authorities. There were no new taxes being applied, but the rules were put in place to clarify what taxes each player in a marketplace is obliged to pay. In addition, online sellers that made at least USD 339,943 in turnover has to charge value added tax to customers and pay this to the authorities.

Surging smartphone use and a rising middle-class income in Indonesia have made the ecommerce industry a battleground for foreign investors. Sellers at online marketplaces are still required to pay the same taxes as conventional ones: 0.5% income tax for small- or medium-sized business or a 25% corporate tax of profit in case of large enterprises.

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