Indonesia appoints Strava among seven new overseas firms to collect 11% VAT

Indonesia's Directorate General of Taxes (DJP) has said users of fitness application Strava will be subject to an 11% value-added tax (VAT) only when purchasing premium digital services, after the government designated Strava Inc. as a collector of VAT on electronic commerce.

The clarification followed the appointment of Strava under Indonesia's Value-Added Tax on Electronic Commerce (PMSE) scheme, which requires certain overseas digital companies selling products and services in the Indonesian market to collect and remit VAT on behalf of the government.

VAT applies only to paid digital services

Inge Diana Rismawanti, Director of Counselling, Services and Public Relations at the DJP, said the tax does not apply to physical exercise or general use of the Strava application, but only to purchases of paid digital services by consumers in Indonesia.

"In principle, every consumption of goods and services in Indonesia is subject to VAT, including digital services originating from overseas," Inge said on Thursday.

Under the new arrangement, users subscribing to Strava Premium or purchasing other paid features will pay an additional 11% VAT, which will be collected directly by the company and remitted to the state treasury.

For example, a Strava Premium subscription previously priced at Rp50,000 per month would increase to Rp55,500 after the 11% VAT is applied.

The DJP stressed that the policy affects only users who subscribe to paid services. Those using Strava's free features will not be charged VAT because they are not making taxable transactions.

"So the impact is felt only by users who subscribe to or purchase premium services," Inge said.

Part of broader expansion of digital VAT collection

According to the DJP, Strava's appointment forms part of a broader expansion of Indonesia's PMSE VAT collection system, which targets overseas digital companies selling goods and services to Indonesian consumers.

Six other foreign digital companies were also designated as PMSE VAT collectors:

• Envato Pty Ltd
• Envato Elements Pty Ltd
• The Nielsen Norman Group Inc.
• Kling AI Pte. Ltd.
• Law School Admission Council Inc.
• PLAUD LLC

The companies operate across a range of sectors, including creative services, digital content subscriptions, education and certification, artificial intelligence, and legal education.

The newly appointed companies span essential digital industries, ranging from fitness applications and visual content providers to AI-based technologies.

Under the policy, Indonesian customers purchasing products or renewing premium subscriptions on these platforms will pay an additional 11% VAT at the point of payment, while users of free services will remain unaffected.

The DJP said it had appointed 271 electronic commerce businesses as VAT collectors by the end of May 2026, of which 233 had already collected and remitted tax.

VAT collected under the PMSE scheme has reached Rp40.55 trillion.

Inge said the growing number of digital platforms designated as VAT collectors reflected the government's efforts to keep tax policy aligned with technological developments and evolving digital business models.

"The inclusion of AI service providers and various other digital services in the list of PMSE VAT collectors reflects the increasingly diverse range of digital services used by the public. The DJP will continue to monitor developments in technology and digital business models to ensure tax obligations are implemented effectively, fairly, and with legal certainty for businesses," she said.