On 1 May 2022, the Minister for Finance’s new tax regulation took effect (the New Regulation).* The New Regulation applies to financial technology companies and impose income tax for peer-to-peer lending services (P2P Lending) and value-added tax (VAT).

The New Regulation requires any P2P lending organisations, that receive income through loan interest or similar Sharia-based income, to report that income in their annual tax return and pay the following interest percentage of the gross interest amount:

• 15% if they are domestic taxpayers with a permanent establishment in Indonesia; or
• 20% if they are foreign taxpayers with no permanent establishment in Indonesia.

The New Regulation also imposes VAT on certain fintech services. If you believe that these new taxes may affect your organisation, please contact your usual BLP lawyer to discuss.

*Ministry of Finance Regulation No. 69/PMK.03/2022 of 2022 concerning Income Tax and Value-Added Tax on The Organization of Financial Technology.