Digital Purchases from Abroad: Banks Now Also Collect the Tax

On Thursday, 10 September 2026, 10 banks in Indonesia began implementing the Tax Collection System for Foreign Digital Transactions (SPP-TDLN) as part of a system reliability trial prior to its expansion to the entire national banking sector. The policy makes banks parties required to collect Value Added Tax (VAT) on the utilization of digital goods and/or services from outside the customs territory by their customers. The Minister of Finance, Purbaya Yudhi Sadewa, stated that the initial implementation would be carried out by banks belonging to the Association of State-Owned Banks (Himbara), before subsequently being expanded gradually to private banks and fintech service providers once the system is deemed ready. At this initial stage, the implementation of SPP-TDLN remains focused on testing system reliability, while its broader implementation will be carried out gradually in accordance with the readiness of each provider.

Legal Architecture of SPP-TDLN: Complementing the VAT PMSE Mechanism

Prior to the implementation of SPP-TDLN, the Government had already established the VAT PMSE mechanism as of 1 July 2020. Under this scheme, foreign digital companies that meet the applicable criteria and are appointed by the Directorate General of Taxes (DGT), such as streaming service or software providers, collect VAT directly from their consumers.

SPP-TDLN serves as an additional mechanism by utilizing the payment system to assist in identifying and collecting VAT on foreign digital transactions. Under this mechanism, banks appointed as Other Parties act as VAT collectors after a transaction is confirmed by the SPP-TDLN system as a transaction subject to VAT. The bank then remits the VAT collected through the SPP-TDLN Operator for subsequent remittance to the state treasury.

Accordingly, under SPP-TDLN, banks are not the parties that independently determine whether a transaction is subject to VAT. Such determination is made through the confirmation mechanism within the SPP-TDLN system, while banks perform the collection and remittance functions after receiving confirmation.

Legal Basis of SPP-TDLN

Legally, SPP-TDLN has a layered legal basis. The KUP Law, particularly Article 32A, authorizes the Minister of Finance to appoint other parties to carry out the collection, remittance, and/or reporting of taxes. This framework is subsequently elaborated through Presidential Regulation No. 68 of 2025 concerning the Tax Collection System for Foreign Digital Transactions.

These provisions are further elaborated technically through Minister of Finance Regulation No. 49 of 2026. This regulation governs how SPP-TDLN is implemented, including the parties involved as well as the VAT collection and reporting mechanisms.

How Does SPP-TDLN Work?

The principal distinction of SPP-TDLN lies in the point of collection. Whereas under VAT PMSE, an appointed digital company collects VAT from the consumer, under SPP-TDLN, collection is carried out through the party facilitating the payment. However, the bank does not independently determine whether a transaction is subject to VAT. That determination originates from the SPP-TDLN system.

1. Transaction Verification

When a customer conducts a foreign digital transaction, the Issuer, namely a bank or non-bank institution that facilitates the payment, submits the transaction data to the SPP-TDLN Operator. Such data is used to determine whether the transaction constitutes an object of VAT. Minister of Finance Regulation 49/2026 stipulates that an Other Party is required to submit transaction data for the purposes of the confirmation process.

2. SPP-TDLN Provides Confirmation

VAT becomes due when the SPP-TDLN Operator provides confirmation that the transaction is a transaction subject to VAT. Thus, the bank does not independently determine the tax status.

3. Bank Collects VAT

After receiving confirmation, the Other Party collects VAT. Minister of Finance Regulation 49/2026 stipulates an 11/111 formula where the price or payment already includes VAT. For transactions in foreign currency, the transaction value is converted into Rupiah based on the Minister of Finance exchange rate applicable at the time the confirmation is provided.

The bank then issues a collection document containing information on the transaction and the amount of VAT. Such document has the status of a document treated as equivalent to a tax invoice in accordance with the provisions of Minister of Finance Regulation 49/2026.

4. VAT Is Remitted to the State

VAT that has been collected does not constitute bank revenue. The Other Party is required to remit it through the SPP-TDLN Operator no later than seven days from the date the confirmation is provided. Subsequently, the SPP-TDLN Operator is required to remit such VAT to the state treasury no later than seven days from the date it receives the remittance from the Other Party.

Who Operates the System?

Under this architecture, PT Jalin Pembayaran Nusantara (Jalin) acts as the SPP-TDLN Operator. Presidential Regulation No. 68 of 2025 designates Jalin as the entity responsible for operating the system. Jalin is tasked with providing and operating the infrastructure that connects the Other Parties with the tax collection system.

Accordingly, the flow can be simplified as follows:

Customer → Bank/Issuer → SPP-TDLN/Jalin → Confirmation → Bank Collects VAT → VAT Remitted to Jalin → State Treasury.

According to reports concerning the implementation of SPP-TDLN in September 2026, the initial implementation is being carried out gradually through banks whose systems are ready. This indicates that the policy concerns not only tax obligations, but also the technical readiness and security of interconnections between systems.