As part of a broader global trend, Indonesia is tightening its enforcement of Goods and Services Tax (GST) obligations for foreign digital service providers. Beginning in 2025, the country will reaffirm the application of an 11% GST on all nonresident business-to-business (B2B) and business-to-consumer (B2C) digital sales exceeding an annual threshold of IDR 600 million (approximately USD 40,000).
This development marks another milestone in Southeast Asia’s evolving digital tax landscape and presents key implications for multinational companies delivering digital goods and services to Indonesian customers.
Key Features of the Indonesian GST Framework
Indonesia’s digital GST regime applies to a wide array of digital products and services, including:
- Software and Software-as-a-Service (SaaS) platforms
- Streaming media, online publications, and e-books
- Cloud storage, productivity tools, and communication services
- Online marketplaces, ad platforms, and intermediary portals
Luxury digital goods and selected high-end services may attract a higher GST rate of 12%, though the regulatory definition of “luxury” is still under development.
Compliance Requirements for Nonresident Digital Sellers
Foreign businesses providing digital services to customers in Indonesia must take the following actions to remain compliant:
- Identify customer location using billing address, IP data, or payment source.
- Determine product eligibility under the digital services classification.
- Validate business customer tax IDs for B2B transactions.
- Register for Indonesian GST if annual sales exceed IDR 600 million.
- Apply the correct tax rate (11% or 12%) to taxable sales.
- File GST returns regularly and maintain tax documentation.
These requirements mirror similar regulations adopted in other APAC countries, such as Australia, South Korea, and Singapore—signaling increasing regulatory alignment across the region.
Comparative View: Indonesia vs. Other Digital Tax Jurisdictions
| Country | GST/VAT Rate | Registration Threshold | Includes B2B? | Special Notes |
| Indonesia | 11% (12% luxury) | IDR 600M (~USD 40K) | Yes | Separate rate for luxury digital goods |
| Australia | 10% | AUD 75K | Yes | Simplified registration for nonresidents |
| EU OSS System | Varies (17-27%) | EUR 10K (EU-wide) | Yes | One Stop Shop (OSS) for EU-wide VAT |
| Singapore | 8% | SGD 100K | Yes | Applies both to B2B and B2C |
Risks of Non-Compliance
Delaying or neglecting GST obligations in Indonesia can expose businesses to:
- Tax audits and investigations
- Backdated tax liabilities and penalties
- Interest charges on unpaid taxes
- Reputational damage and public scrutiny
“GST compliance is no longer optional,” says a compliance officer at a global SaaS firm. “Global companies must adapt their tax strategy to the realities of a digitized economy.”
Best Practices for Global Businesses
To stay ahead of regulatory changes and avoid risk, international digital businesses should:
- Establish centralized compliance systems covering all key APAC jurisdictions
- Regularly monitor country-specific tax thresholds and requirements
- Automate tax calculation, invoicing, and filing where possible
- Work with regional tax advisors to stay aligned with new updates
Downloadable Checklist: Are You GST Ready in Indonesia?
Do your annual Indonesian sales exceed IDR 600 million?
Are your digital products subject to GST?
Can you verify customer location and business status?
Have you registered with the Indonesian tax authority (DJP)?
Are you collecting and remitting the correct GST rate?
Are you maintaining appropriate tax records?
If you answered “No” to any of the above, it’s time to review your compliance strategy.
How TaxDo Can Help Digital Sellers Stay Compliant in Indonesia
Navigating Indonesia’s evolving GST landscape can be complex, especially for foreign digital sellers. At TaxDo, we specialize in helping international businesses stay compliant with Indonesia’s digital tax regulations, so you can focus on growth without the risk of penalties or delays.
Here’s how TaxDo supports your business:
- Local Tax Representative Services in Indonesia
If your business model or volume requires it, we provide qualified local tax representation to help you meet regulatory obligations seamlessly.
- End-to-End GST Registration
We handle your GST registration with the Indonesian tax authority (DJP), ensuring your business is properly set up to collect and remit GST.
- Filing GST Returns On Time
Our tax compliance experts manage your GST return filings accurately and on schedule, avoiding late fees and regulatory scrutiny.
- GST Payment Processing to Authorities
TaxDo can take care of transferring GST payments to the Indonesian tax office on your behalf – securely and efficiently.
- Real-Time Tax ID Verification in Indonesia
Streamline your B2B transactions by instantly verifying Indonesian business tax IDs directly with official tax authority databases – ensuring accuracy, reducing fraud risk, and maintaining full compliance.
- Managing GST Audits and Inquiries
If the Indonesian tax authority raises any inquiries or audit requests, we’ll handle the communication and documentation required, so you don’t have to.
Whether you’re a SaaS platform, e-commerce provider, ad network, or subscription-based service, TaxDo is your trusted partner for cross-border GST compliance in Indonesia and beyond.
Let us simplify your tax journey.
Contact us today to get started or schedule a free consultation.