The digital world has opened up many new opportunities, including in the world of commerce. E-commerce sellers can now achieve revenues of millions to billions of rupiah with just an internet connection and a device.
However, there is one thing that should not be overlooked such as tax obligations. So, are e-commerce sellers taxed? The newest update will become concern for Indonesian society.
E-Commerce is Not A Tax-Free Zone
E-commerce sellers often believe their businesses are too small to e taxed. In this situation, Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (UU HPP), it is regarding income tax (PPh) and other derivate regulations emphasizes that all income digital platforms like Tokopedia, Shopee, Lazada, Bukalapak, and other.
In addition, businesses selling online is considered to have income that must be reported and taxed. However, the most relevant type of tax is the Final Income Tax for MSMEs.
What Is Final Income Tax for MSMEs?
The Final Income Tax for MSMEs is a Final Income Tax imposed on income from businesses run by Individual Taxpayers and certain Corporate Taxpayers that are included in the category of Micro, Small, and Medium Enterprises (MSMEs).
In accordance, with Government Regulation Number 23 of 2018 concerning Income Tax on Income from Businesses Received or Obtained by Taxpayers with a Certain Gross Turnover. So, the Final Income Tax rate for MSMEs is 0.5% of monthly turnover.
Based on Government Regulation No. 55 of 2022, it is concerning Adjustments to Income Tax Regulations. Taxpayers can only utilize the 0.5% final rate for the following periods:
- 7 years for Individual Taxpayers,
- 4 years for Corporate Taxpayers in the form of cooperatives, CVs or firms,
- 3 years for Corporate Taxpayers in the form of Limited Liability Companies (PT).
So, the tax is calculated using the general rate in accordance with the provisions of Law Number 7 of 1983 concerning Income Tax (PPh Law) in conjunction with the HPP Law.
Minimum Taxable Turnover Limit
The answer goes back to the HPP Law’s income tax cluster, which states that the non-taxable income (PTKP) for individuals is IDR 54 million per year. The equivalent of IDR 4.5 million per month and this provision applies to net income and it is not turnover.
Under the MSME Final Income Tax scheme, turnover, not profit is taxed. However, if an e-commerce seller’s sales turnover is below IDR 500 million per year, according to the lates provisions in the HPP Law. It means that e-commerce sellers are not required to pay final income tax for MSMEs if their annual turnover is below IDR 500 million.
For your information, if turnover exceeds that figure, the entire turnover will be subject to a final income tax rate 0,5% only on the excess. However, there is an example of this percentage:
- 1 year turnover: Rp600 million
- Non-taxable portion: Rp500 million
- Taxable portion: Rp100 million
- Final Income Tax for MSMEs: 0.5% x Rp100 million = Rp500,000
If the turnover has not reached that threshold, sellers are exempt from MSME income tax obligations. However, one thing to keep in mind is even they are not subject to tax, sellers are still required to have a Taxpayer Identification Number (NPWP) and submit reports. In addition, administrative compliance remains in place even if they do not pay taxes.
Are All Sellers Required to Pay Tax?
Quoted from pajak.go.id, sellers must meet two requirements, there are:
- Seller has turnover of more than IDR 500 million a year for individual taxpayers.
- Seller has not yet chosen to use the general taxation scheme
The conclusion of this update is e-commerce sellers enjoy the convenience of doing business online, but that does not exempt them from tax obligations. As long as annual turnover exceeds IDR 500 million, sellers are required to pay final income tax (PPh) for MSMEs turnover.
However, sellers can develop more professionally and gain the trust of customer and business partners. In addition, sellers remains calm in their business without fear of future tax issues.
