Indonesian Government Implements New VAT Collection System for Cross-Border Digital Transactions
The Indonesian government has introduced a new regulation, MOF Regulation No. 49/2026, to enhance the collection of Value-Added Tax (VAT) on cross-border digital transactions. This regulation, effective from July 14, 2026, aims to improve state revenue from digital economic activities that were previously not optimally taxed. The regulation establishes the Cross-Border Digital Transaction Tax Collection System (SPP-TDLN), which involves banks and non-bank institutions in collecting VAT on digital goods and services purchased from overseas suppliers. The system requires these institutions, termed 'Other Parties,' to collect, pay, and report VAT, moving the point of collection to the payment layer. This mechanism applies to digital goods and services used within Indonesia, such as software and cloud-based services. 
