Understanding the VAT Provisions for Online Shopping on Double Dates

Shopping on "double dates," such as 10-10 (October 10) or 11-11 (November 11), can be an effective strategy to cut down your online shopping budget across your favorite marketplace.

This is because many sellers offer discounts on these special dates, making the items you purchase cheaper than their normal price.

According to data from Bank Indonesia (BI), e-commerce transactions in October 2024 increased by 10.69% month-on-month, reaching IDR 42.2 trillion. One of the key factors behind this rise is the abundance of promotions.

However, beyond taking advantage of discounts on double dates, another way to reduce the cost of your purchases is by buying items that are not subject to Value-Added Tax (VAT).

Read: Marketplaces and Online Sellers are Required to Submit Import Data to DGCE

Transactions Subject to VAT

As we know, generally, every sale of goods or taxable services is subject to VAT at a rate of 11% of the sale price. However, not all items we purchase, including those from marketplaces, are subject to VAT.

This is because VAT will only be collected for sales made, firstly, by traders with the status of VAT-Registered Persons. 

Second, purchases of goods made in relation to government tenders on government-owned applications as well. Third, the transfer of digital goods or services through trade through electronic systems (PMSE). 

1. Purchasing Goods by a VAT-Registered Person (PKP)

VAT will be collected if the goods are sold by sellers who have the status of  VAT-Registered Person. For information, not all sellers have this status. 

There are several criteria for sellers who must be designated as PKP. First, the seller makes transfers of taxable goods (BKP) or taxable services (JKP). 

Second, the seller has a minimum revenue of IDR 4.8 billion a year. If the revenue is less than IDR 4.8 billion a year, then it is not required to make PKP. 

2. Government Tender 

VAT can also be charged for the purchase of goods or services through government tenders conducted through the government's e-commerce, namely the Government Procurement Information System (SIPP). 

This is as stated in the Minister of Finance Regulation (PMK) Number 58/PMK.03/2022 which took effect on 1 May 2022. 

3. Digital Goods or Services

Another category subject to VAT is the transfer of digital goods or services related to trade through electronic systems (PMSE). This type of tax is often referred to as the PMSE VAT. 

What is meant by digital goods includes software and other digital goods. Meanwhile, digital goods include subscriptions to streaming services such as Netflix, Spotify, or YouTube Premium.

However, PMSE VAT is only collected if the digital goods seller has been appointed as a PMSE VAT collector. Once the seller is appointed, your transaction will automatically be subject to an 11% VAT.

Transactions Not Subject to VAT

In addition, the government has provided facilities in the form of VAT exemption, and VAT is not collected on the transfer of certain taxable goods or services.

Goods that are not subject to VAT include basic necessities such as rice and grain, corn, sago, and soybeans; consumer salt, meat, eggs, milk, fruits, and vegetables. 

Furthermore, the government has also exempted VAT collection on the delivery of national strategic goods, such as electricity, clean water, sugar, and mining products except coal and others. 

This is as stipulated in Government Regulation (PP) Number 49 Year 2022. (ASP/KEN)