Indonesians must be know about this update information and they will know about this changes. Especially, what is the important things about the future of online business in e-commerce?

E-Commerce Trends Affecting the Digital Economy

Increased use of e-commerce platforms along with the increase in smartphone usage and internet access, more consumers are turning to e-commerce platforms such as Amazon, Shopee, and Tokopedia continue to experience significant growth, while local and smaller companies are also starting to utilize social media and websites to expand their reach on their business at e-commerce.

Digital Payments

The digital payment have become a very significant trend, especially in developing countries.  In addition, digital wallets such as Gopay, OVO, and PayPal make it easy for consumers or merchants because it make transaction easily and instantly. It fast, secure, and easy to use payment systems are increasingly shifting  the dominance of cash payments, and opening up opportunities for new businesses that provide payment solutions.

Increased Online Shopping

Indonesians who were not used to shipping online are now making it a habit, it is according to research, online shopping in Indonesia. For example, recorded a tremendous surge, which made many businesses start shifting their focus to online channels. In addition, the impact of COVID-19 pandemic has accelerated the adoption of online shopping online as a habit.

Integration of AI Technology and Chatbots in E-Commerce

The development of Artificial Intelligence (AI) enables a more personalized and efficient shopping experience. In addition, these technologies help understand customer preferences and provide relevant product recommendations. However, Chatbots are also increasingly being used in customer service provide instant responses and convenience or efficiency in online transactions.

Social Commerce

Social media is not only a platform for sharing content, but also a new marketplace for products sold directly through these platforms. For example, Facebook, Instagram, and TikTok have opened up new business opportunities by offering online store features, that allow users to buy products directly from social media platforms they use.

The conclusion of this update is the digital economy of 2025 will continue to provide both challenges and opportunities for businesses around the world. After that, e-commerce will remain the dominant sector with technological innovations and changes in consumer behavior driving digital market transformation.

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:

1. 7 years for Individual Taxpayers,
2. 4 years for Corporate Taxpayers in the form of cooperatives, CVs or firms,
3. 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. 1 year turnover: Rp600 million
2. Non-taxable portion: Rp500 million
3. Taxable portion: Rp100 million 
4. 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:

1. Seller has turnover of  more than IDR 500 million a year for individual taxpayers.
2. 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.

Indonesia is rolling out a major update to its Coretax system as part of the government’s broader digital transformation of tax administration in 2025, the purposes are to improve transparency and efficiency. So, what should be noted for the taxpayers regarding the new system?

Real-Time Reporting Integration

The development of a digital tax administration system begins with them implementation of e-filling for reporting Tax Returns (SPT) for taxpayers, e-invoices, for tax invoice administration and reporting of Value Added Tax (VAT) Periodic SPTs, and e-billing as a tax payment channel.

The implement tax reforms in tax administration services, the Directorate General of Taxes (DGT) has launched a sophisticated and integrated application system called Coretax, or the Core Tax Administration System.

In addition, this system is expected to improve and simplify the fulfillment of tax rights and obligations for both taxpayers and tax officials. Businesses are required to integrate their accounting systems with the Directorate General of Taxes (DGT) to enable real-time data submission and monitoring.

Data Updates

One of the primary steps taxpayers must take is to update their tax data completely and accurately. It is to support the implementation of Coretax. In this situation, the Directorate General of Taxes (DGT) will ensure that taxpayer data in its system is always up-to-date.

So, taxpayers need to ensure that the information recorded in the tax system reflects actual conditions. However, taxpayer will update the information include identity data, address, type of business, phone number, email address, and other relevant tax information.

Coretax Simulator

The Directorate General of Taxes (DGT) has provided a Coretax simulator trial. This simulator gives taxpayers the opportunity to try out the new system, which will be used in 2025, before it is fully implemented.

Taxpayers can learn how the Coretax system will work, from tax reporting and payments to real-time tax status monitoring. While using this simulator is also an important tool for understanding the new process for more efficient tax reporting and payment.

Taxpayers can participate in this trial and provide feedback to the Directorate General of Taxes (DGT), it is regarding to their experience by using the system. Therefore, taxpayers should not miss this opportunity to try this simulator and ensure they are prepared for the upcoming system changes.

As Coretax is expected to be implemented in 2025, taxpayers need to take several crucial preparatory steps to ensure a good transition to the new system. According to the preparation, taxpayers will be able to utilize this new technology to fulfill tax obligations more easily, quickly, and efficiently.