Nowadays, technological advancements offer various opportunities across several sectors, one of which is earning income through affiliate programs. Through affiliate programs, individuals can earn commissions by promoting other people’s products or services via affiliate links shared on social media, marketplaces, or other digital platforms. It is not uncommon for affiliate programs to serve as a source of additional income, or even as a primary job, due to their flexible schedule and significant earning potential.
While there are opportunities to earn additional income as an affiliate, affiliates need to be aware that there are tax obligations they must comply with, as any additional income earned by a taxpayer is subject to taxation. Therefore, commissions received by affiliates are subject to taxation. It creates a question, like: what are the tax obligations for affiliates?
Types of Taxes Imposed on Affiliates
The growth of the digital economy in Indonesia has opened up new job opportunities, for example: an affiliate. An affiliate is someone who earns income in the form of commissions for successfully marketing or recommending a product or service to consumers. These commissions are classified as income subject to Income Tax (PPh), it means that income earned from affiliate activities is treated the same as income received from other jobs or services.
According to Article 4(1) of Law No. 36 of 2008 on the Fourth Amendment to -Law No. 7 of 1983 on Income Tax (“PPh Law”), “income” refers to any increase in economic capacity received or obtained by a taxpayer, whether originating from Indonesia or from outside Indonesia, that can be used for consumption or to increase the wealth of the taxpayer in question, regardless of the name or form under which it is received.
The Directorate General of Taxes (DJP) explains that affiliate commissions represent income from self-employment, which is generally subject to Income Tax withholding under Article 21 or Article 26 if the payment is made to an individual. Therefore, marketplaces or affiliate program operators that make commission payments act as tax withholding agents and are obligated to withhold, remit, and report income tax on commissions paid to affiliates.
The amount of tax ultimately borne by the affiliate is based on the progressive personal income tax rates as stipulated in Article 17(1) of Law No. 7 of 2021 on the Harmonization of Tax Regulations (“HPP Law”), ranging from 5% for taxable income up to Rp60 million, up to 35% for taxable income exceeding Rp5 billion. Therefore, the higher the net income received by an affiliate in a tax year, the greater the potential Income Tax liability.
It is also important to understand that affiliates who do not have a Taxpayer Identification Number (NPWP) may be subject to a higher withholding tax rate than taxpayers who do have an NPWP. Therefore, having an NPWP is a crucial aspect of fulfilling tax obligations for an affiliate.
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Tax Obligations for Affiliates
As individual taxpayers who earn income, affiliates have a number of tax obligations they are required to fulfill. The first obligation is to register for a Taxpayer Identification Number (NPWP) if they meet the subjective and objective requirements. After that, the next obligation is to understand the tax mechanism applicable to the commissions received. In this situation, affiliates need to understand that commissions earned from marketplaces or digital platforms are subject to income tax; therefore, affiliates must retain the tax withholding certificates provided by the marketplace as the basis for calculating and reporting their income at the end of the tax year.
Furthermore, affiliates are required to calculate and report all their income on the Annual Individual Income Tax Return (SPT). Filing the Annual Tax Return is a mandatory obligation that must be fulfilled every year as long as the NPWP remains active. In this tax return, taxpayers must list all income earned, including affiliate commissions, assets, liabilities, and any tax credits they hold.
Specifically for affiliates who earn a certain amount of income and continuously carry out their activities as freelancers, tax administrative obligations can become more complex because they must keep records of income and expenses and calculate net income in accordance with applicable tax regulations. For this reason, maintaining orderly records is essential to ensure that tax returns are filed correctly and accurately.
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Legal Consequences of Non-Compliance with Tax Obligations
Compliance with tax obligations is not only an administrative matter but also a legal obligation explicitly regulated by law. Under Law No. 6 of 1983 on General Provisions and Tax Procedures (“KUP Law”), as last amended by Law No. 6 of 2023 Stipulating Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation into Law (“Omnibus Law on Job Creation”), imposes various legal consequences on taxpayers who fail to fulfill their tax obligations.
If an affiliate as an individual taxpayer fails to file an Annual Tax Return, they may be subject to an administrative penalty in the form of a fine of Rp100,000. In addition to administrative penalties, the KUP Law also provides for criminal penalties for taxpayers who intentionally fail to file a tax return or file a tax return containing false or incomplete information, thereby causing a loss to state revenue. Pursuant to Article 38 of the Tax Administration Law, such violations are punishable by imprisonment for a maximum of 1 (one) year and/or a fine of up to 2 (two) times the amount of tax owed.
In addition, according to Article 39(1) of the Tax Administration Law, if a taxpayer intentionally evades tax obligations by concealing income, using false data, or taking other actions that result in a reduction of government revenue, they may also be subject to criminal penalties of imprisonment for a maximum of three years and/or a fine of up to four times the amount of tax owed that is underpaid or unpaid.
Therefore, affiliates need to understand that income earned from digital activities remains taxable and must be reported accurately. Thus, early awareness of tax compliance will help avoid the risk of audits, administrative sanctions, or criminal penalties in the future.
Marketing activities through affiliate programs offer promising income opportunities. However, it is important to note that the commissions earned are subject to income tax, so affiliates have tax obligations they must fulfill. Therefore, affiliates must ensure they have an NPWP, understand the tax mechanisms applicable to the commissions they receive, and report all their income accurately and on time via their Annual Tax Return to avoid administrative or criminal penalties, as well as to make a tangible contribution to government revenue and national development.***
Regulations:
- Undang-Undang Nomor 6 Tahun 2023 tentang Penetapan Peraturan Pemerintah Pengganti Undang-Undang Nomor 2 Tahun 2022 Tentang Cipta Kerja Menjadi Undang-Undang (“UU Cipta Kerja”).
- Undang-Undang Nomor 7 Tahun 2021 tentang Harmonisasi Peraturan Perpajakan (“UU HPP”).
- Undang-Undang Nomor 36 Tahun 2008 tentang Perubahan Keempat atas Undang-Undang Nomor 7 Tahun 1983 tentang Pajak Penghasilan (“UU PPh”).
- Undang-Undang Nomor 6 Tahun 1983 tentang Ketentuan Umum dan Tata Cara Perpajakan (“UU KUP”).
References:
- Affiliate Marketing? Spill Pengenaan Pajaknya dong, Kak!. Direktorat Jenderal Pajak. (Diakses pada 10 Juni 2026 Pukul 10.02 WIB).
- Wahai Afiliator, Cek Keranjang Kuning, Cek Juga Kewajiban Perpajakannya, Ya. Direktorat Jenderal Pajak. (Diakses pada 10 Juni 2026 Pukul 11.29 WIB).
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