Presidential Regulation 68/2025: Reforming VAT Collection for Overseas Digital Vendors
Introduction
On June 5, 2025, Presidential Regulation 68 of 2025 was enacted concerning the Tax Collection System on Foreign Digital Transactions (SPP-TDLN). This landmark regulation establishes a dedicated, technology-driven mechanism to ensure that Value Added Tax (VAT) is appropriately collected on digital services and products supplied by overseas vendors to Indonesian consumers.[1]
By mandating an integrated national system and appointing a specialized state-owned enterprise subsidiary — PT Jalin Pembayaran Nusantara (PT Jalin) — to operate it, the government underscores its commitment to broadening the tax base, enhancing fairness, and securing state revenue in the expanding digital economy.
Background: Challenges and Objectives
Indonesia’s digital economy has witnessed rapid growth in cross-border transactions, ranging from streaming subscriptions and cloud services to e-commerce and digital advertising. Yet, many foreign suppliers fall outside the traditional tax administration’s direct reach, resulting in under-collection of VAT and potential distortions of market competition.
To address these challenges, the Ministry of Finance (MoF) has been working on regulations; however, the issuance of Presidential Regulation 68 of 2025 brings about several key changes in how foreign digital vendors are treated under Indonesia’s VAT system.
Key Provisions
- The Purpose
Under MoF Regulation 60/PMK.03/2022 as last amended by MoF Regulation 81 of 2024, foreign digital vendors exceeding specific thresholds such as IDR 600 million in annual transactions and/or 12,000 users per year are required to register for and collect VAT in Indonesia
To implement the above, Presidential Regulation 68 of 2025 introduces the SPP-TDLN, a national system designed to improve the performance of tax collection on foreign digital transactions in an efficient, effective, and accountable manner, while considering the complexity of such transactions that require a specialized collection system.[2]
- Definitions and Scope[3]
- Foreign Digital Transaction: “[T]he utilization or exchange of services, and/or information carried out using computers, computer networks, and/or other electronic media” by nonresident suppliers
- SPP‑TDLN: [A} national, technology‑driven system designed to collect VAT on these foreign digital transactions
- Operator Appointment[4]
- The regulation mandates that a subsidiary of a State‑Owned Enterprise engages in financial services technology and payment systems to implement and operate SPP‑TDLN.
- PT Jalin has been officially appointed as the system operator, chosen for its existing technological capabilities, financial strength, and data‑security infrastructure.
- Service Fee and Treasury Deposits[5]
- PT Jalin is entitled to a service fee for operating SPP‑TDLN. Fee proposals are reviewed by the coordination team and approved by the Minister of Finance.
- VAT collected through the system constitutes state revenue and must be deposited directly into the state treasury.
- Detailed procedures for both VAT collection and service‑fee payments will be prescribed in a forthcoming ministerial regulation.
Implementation Framework
The implementation of SPP-TDLN is entrusted to PT Jalin, which will oversee system development, sandbox testing, security assurance, and the appointment of qualified partners, both domestic and foreign, with the capacity to support cross-border digital tax collection.
Prospective partners will undergo rigorous administrative and technical assessments, including cybersecurity and performance testing. Once approved, the system will be implemented and monitored by a coordination team appointed by presidential decree to ensure it runs smoothly, transparently, and remains compliant.
Anticipated Impact
- Revenue Enhancement: By capturing VAT from previously untracked foreign suppliers, Indonesia aims to significantly increase annual tax revenue, thereby supporting public services and infrastructure.
- Fair Competition: Domestic digital businesses gain a level playing field, as overseas vendors are subject to the same tax regime.
- Administrative Efficiency: Automation and centralized data management reduce manual interventions, audit burdens, and errors.
- Data‑Driven Policy: Real‑time transaction data will empower the Directorate General of Taxes to monitor compliance trends, detect anomalies, and calibrate future tax policies.
Conclusion
The enactment of Presidential Regulation 68 of 2025 marks a pivotal step in modernizing Indonesia’s VAT framework to encompass the burgeoning digital economy. By institutionalizing a robust, technology‑centric collection system and leveraging PT Jalin’s expertise, the government positions itself to secure essential revenue, uphold tax fairness, and harness data analytics for smarter governance.
Importantly, this regulation indicates a paradigm shift: It seems that VAT will no longer be limited to appointed platforms. Instead, all overseas digital and e-commerce transactions are expected to be brought into the VAT net, either through vendor self-assessment or via the state-managed SPP-TDLN mechanism.
Further guidance will be issued through a forthcoming ministerial regulation, which is expected to detail the practical implementations, including how payment intermediaries and logistics operators will participate in the VAT collection framework.
How A&M Can Help
A&M can help foreign digital suppliers and domestic partners navigate the regulation with end‑to‑end support. We offer expert guidance on SPP‑TDLN registration and eligibility checks, seamless integration with PT Jalin’s VAT‑collection platform, and preparation of all technical and administrative filings.
[1] President of the Republic of Indonesia, “Presidential Regulation 68/2025,” July 7, 2025, https://www.hukumonline.com/pusatdata/detail/lt686b7bb4ce90f/peraturan-presiden-nomor-68-tahun-2025/
[2] Article 2 of Presidential Regulation 68 of 2025
[3] Article 1 of Presidential Regulation 68 of 2025
[4] Article 3(1)-(3) of Presidential Regulation 68 of 2025
[5]Article 6(1)-(7) of Presidential Regulation 68 of 2025
