Minister of Finance Regulation Number 49 of 2026 Introduces a New VAT Collection Mechanism for Cross-Border Digital Transactions

Introduction

On 14 July 2026, the Minister of Finance of the Republic of Indonesia enacted Minister of Finance Regulation Number 49 of 2026 on Procedures for the Collection of Value Added Tax on Cross-Border Digital Transactions through the Tax Collection System for Cross-Border Digital Transactions (“MoF Regulation 49/2026”), which took effect on 20 July 2026. MoF Regulation 49/2026 establishes the procedures and mechanisms for system operators and other designated parties in carrying out the collection, remittance, and reporting of taxes on the utilization of foreign digital goods and services.

The issuance of MoF Regulation 49/2026 is driven by the continued existence of cross-border digital transactions conducted by domestic taxpayers that constitute Value Added Tax (VAT) objects but have not yet been subject to optimal tax collection. As a follow-up to Presidential Regulation Number 68 of 2025 on the Tax Collection System for Cross-Border Digital Transactions (SPP-TDLN) (“PR 68/2025”), the Ministry of Finance has established the Tax Collection System for Cross-Border Digital Transactions (SPP-TDLN) as the mechanism for collecting VAT through the appointment of designated parties as tax collectors, with the objective of enhancing the effectiveness of tax collection and optimizing state revenue.

Key Provisions

Scope of VAT Collection on Cross-Border Digital Transactions

Pursuant to Article 2, VAT on cross-border digital transactions is collected through the SPP-TDLN, which is administered by the SPP-TDLN Operator. Such VAT is imposed on the utilization of:

·      Intangible Taxable Goods (BKP) in the form of digital goods originating from outside the Customs Area and utilized within the Customs Area by the recipient of the goods; and/or

·      Taxable Services (JKP) in the form of digital services supplied from outside the Customs Area and utilized within the Customs Area by the recipient of the services.

The SPP-TDLN is administered by the SPP-TDLN Operator, a legal entity established pursuant to PR 68/2025. The designated operator is PT Jalin Pembayaran Nusantara, a subsidiary of a State-Owned Enterprise (BUMN) operating in the financial technology and payment systems sector, which is responsible for administering the VAT collection system for cross-border digital transactions in accordance with the prevailing laws and regulations.

Appointment of Issuers as Designated Parties

Pursuant to Article 3, PT Jalin Pembayaran Nusantara, acting as the SPP-TDLN Operator, engages Issuers, namely banks or non-bank institutions that provide payment services, to support the operation of the SPP-TDLN. Such Issuers are appointed as Designated Parties by the Minister of Finance, with the authority for such appointment delegated to the Director General of Taxes.

The Designated Parties are authorized to withhold, collect, remit, and/or report taxes in accordance with the prevailing laws and regulations.

Furthermore, Article 4 provides that, prior to being appointed as a Designated Party, an Issuer must complete the system development phase and the stabilization (sandboxing) period to ensure secure and seamless interconnection with the SPP-TDLN.

The development phase constitutes the process of adapting the Issuer’s system to enable connectivity with the SPP-TDLN in accordance with the technical specifications established by the SPP-TDLN Operator and must commence no later than 1 (one) working day after the technical specification documents are received.

Thereafter, the Issuer is required to participate in the stabilization period as a testing phase to verify that the interconnection, system security, and operational readiness between the Issuer’s system and the SPP-TDLN satisfy the criteria established by the SPP-TDLN Operator.

VAT Liability and Calculation Formula

Pursuant to Article 6, VAT on cross-border digital transactions becomes payable when the SPP-TDLN Operator confirms to the Designated Party that the relevant transaction has been identified as a VATable transaction.

Furthermore, pursuant to Article 7, the Designated Party is required to collect VAT by applying the formula of 11/111 (eleven over one hundred and eleven) to the transaction price or payment for the supply of intangible Taxable Goods and/or Taxable Services, where such amount is VAT-inclusive.

Where a transaction is conducted in a foreign currency, the transaction value must first be converted into Indonesian Rupiah using the exchange rate determined by the Minister of Finance that is applicable at the time the SPP-TDLN Operator issues the transaction confirmation.

Obligation to Submit Transaction Data

Pursuant to Article 8, the Designated Party is required to submit data relating to Cross-Border Digital Transactions and/or domestic transactions involving fund transfers and remittances to the SPP-TDLN Operator for the purpose of confirming transactions that may constitute VATable transactions.

The submitted data shall consist of information relevant for tax administration purposes, including:

·      transaction reference number;

·      transaction value and currency; and

·      destination account number.

To ensure data security and confidentiality, the destination account number must be encrypted in the form of a hash value before being submitted to the SPP-TDLN Operator.

Issuance of Documents Deemed Equivalent to Tax Invoices

Pursuant to Article 10, upon collecting VAT, the Designated Party is required to issue a tax collection document containing, at a minimum:

·      the identity of the Designated Party;

·      the identity of the foreign business entity;

·      the identity of the recipient of the goods and/or services;

·      the date of VAT collection;

·      the transaction reference number; and

·      the tax base and the amount of VAT collected.

Such document, including a bill statement, shall be deemed equivalent to a tax invoice and may therefore serve as the basis for claiming an input tax credit, provided that the recipient of the goods and/or services has registered an email address or telephone number with the Directorate General of Taxes.

Deadline for VAT Remittance

Pursuant to Article 12, the Designated Party is required to remit the VAT collected to the SPP-TDLN Operator within 7 (seven) days after receiving confirmation that the relevant transaction constitutes a VATable transaction.

Furthermore, pursuant to Article 14, the SPP-TDLN Operator is required to remit such VAT to the State Treasury through the Tax Deposit mechanism within 7 (seven) days after receiving the VAT funds from the Designated Party, using:

·      a tax payment slip containing:

-       the name and taxpayer identification number (NPWP) of the SPP-TDLN Operator; and

-       Tax Account Code 411618 and Payment Type Code 100.

This provision establishes a tiered VAT remittance mechanism whereby VAT is first transferred from the Designated Party to the SPP-TDLN Operator and subsequently remitted to the State Treasury using the prescribed tax administration codes.

VAT Refunds for Cancelled Cross-Border Digital Transactions

Pursuant to Article 16, where a cross-border digital transaction is cancelled or VAT has been collected on a transaction that should not have been subject to VAT, the party from whom the VAT was collected may submit a refund request to the SPP-TDLN Operator through the Designated Party.

Upon receiving such request, the SPP-TDLN Operator shall follow up by submitting an amended VAT Periodic Tax Return (VAT Return). However, no amendment may be made where the VAT Return has already been audited or where more than 2 (two) years remain before the expiration of the statutory assessment period. In such circumstances, the refund shall be processed directly by the SPP-TDLN Operator.

Any tax overpayment resulting from the amended VAT Return shall be credited against the tax payment obligation in the first subsequent regular VAT Periodic Tax Return that has not yet been submitted following the corrected tax period.

Closing

MoF Regulation 49/2026 clarifies the allocation of responsibilities between the SPP-TDLN Operator and the Designated Parties while establishing procedures for transaction identification, VAT collection, remittance, reporting, and VAT refunds in the event of transaction cancellations. Through the implementation of a standardized system-based collection mechanism, the Regulation is expected to enhance the effectiveness of VAT collection on cross-border digital transactions while providing greater legal certainty for all parties involved.

At the same time, MoF Regulation 49/2026 strengthens Indonesia’s digital tax administration framework, broadens the national tax base, and promotes a more level tax treatment between cross-border digital transactions and domestic transactions.