Jakarta, Indonesia – Grammarly, the popular American technology company known for its writing assistance tools, is no longer listed as a collector of Value Added Tax (VAT) in Indonesia, according to a statement released Friday by the Directorate General of Taxes (DJP) under the Ministry of Finance. The change, effective at the end of January 2026, reflects ongoing adjustments to Indonesia’s regulations regarding VAT on electronic transactions, known as VAT on PMSE – trading through electronic systems.
The move comes as Indonesia continues to refine its approach to taxing digital services provided by foreign companies. The country first implemented the VAT on PMSE in July 2020, requiring certain foreign businesses to collect and remit VAT on services used by Indonesian consumers. This policy aims to level the playing field between domestic and international providers of digital goods and services and to increase government revenue. Understanding Indonesia’s VAT on Digital Goods and Services is crucial for businesses operating in the region.
Indonesia’s Digital Tax Collection Landscape
As of January 31, 2026, the DJP had registered 242 companies as VAT collectors for PMSE. Although, the list is dynamic, with companies being added and removed based on their transaction volume and user traffic within Indonesia. In addition to Grammarly, BetterMe Limited too underwent a change in its VAT collector data, according to Inge Diana Rismawanti, Director of Outreach, Service, and Public Relations at DJP.
Companies qualify as VAT collectors if they meet one of two criteria: exceeding Rp600 million (approximately $38,000 USD as of February 27, 2026) in annual transaction value with Indonesian buyers, or reaching 12,000 users or instances of traffic originating from Indonesia each year. These thresholds are designed to target businesses with a significant presence in the Indonesian digital market. Businesses can also voluntarily register as collectors, even if they don’t meet these criteria.
Growing Digital Tax Revenue in Indonesia
The Indonesian government’s efforts to collect VAT on digital transactions have yielded substantial results. As of January 31, 2026, 223 of the appointed PMSE collectors had successfully collected and deposited VAT, totaling Rp36.69 trillion (approximately $2.3 billion USD). This figure represents a significant increase over previous years, demonstrating the growing importance of digital tax revenue for the Indonesian government.
A breakdown of the VAT on PMSE payments reveals a consistent upward trend: Rp731.4 billion in 2020, Rp3.9 trillion in 2021, Rp5.51 trillion in 2022, Rp6.76 trillion in 2023, Rp8.44 trillion in 2024, Rp10.32 trillion in 2025, and Rp1.02 trillion in 2026 (data through January 31). Beyond VAT on PMSE, Indonesia has also collected Rp1.93 trillion in crypto tax and Rp4.47 trillion from fintech tax, bringing the total digital tax revenue to Rp47.18 trillion through January 31, 2026.
Criteria for VAT Collector Status
- Transaction value with Indonesian buyers exceeding Rp600 million per year.
- Transaction value with Indonesian buyers exceeding Rp50 million per month.
- Reaching traffic or access from Indonesia exceeding 12,000 annually.
Implications of Grammarly’s Removal
The removal of Grammarly from the list of VAT collectors raises questions about the company’s transaction volume and user base in Indonesia. While the DJP did not provide specific reasons for the revocation, it suggests that Grammarly no longer meets the criteria for collector status. It’s important to note that this does not necessarily mean Grammarly has ceased operations in Indonesia, but rather that the responsibility for collecting and remitting VAT on its services has shifted.
The change highlights the evolving nature of Indonesia’s digital tax landscape and the ongoing efforts to ensure compliance with VAT regulations. The DJP continues to monitor and adjust its policies to effectively capture revenue from the growing digital economy. The government’s focus on digital taxation is part of a broader strategy to increase state revenue and fund public services.
The DJP has not yet announced any immediate changes to its overall digital tax policy following Grammarly’s removal. However, officials have indicated that they will continue to assess the effectiveness of the current regulations and make adjustments as needed. The next scheduled update on the PMSE collector list is expected in April 2026, providing further insight into the evolving digital tax landscape in Indonesia.
Readers interested in learning more about Indonesia’s digital tax policies can visit the official website of the Directorate General of Taxes: https://pajak.go.id/en/digitaltax.
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