Verification may be conducted on “other information” which either belongs to or is obtained by the DGT, as follows: clarification results/confirmation of VAT invoices; withholding tax slips; taxation data relating to taxpayers not submitting tax returns on time, having received a written reminder and still not submitting a tax return within the period specified in… Read More

Types of Tax Assessment Letter

The name of a tax assessment letter refers to the resulting balance between the tax due and the tax credits. Accordingly, there are three types of tax assessment letters: Overpaid Tax Assessment Letter (Surat Ketetapan Pajak Lebih Bayar/SKPLB) if the tax due is less than the tax credit amount; Underpaid Tax Assessment Letter (Surat Ketetapan… Read More

Tax Assessment

Indonesia uses a self-assessment system under which taxpayers are trusted to calculate, pay, and report their own taxes in accordance with prevailing tax laws and regulations. However, the DGT may issue tax assessment letters to a particular taxpayer if it fnds that, based on a tax audit or on other information, the taxpayer has not… Read More

Statue of Limitation

Under the current Tax Administration Law, the DGT can issue an underpaid tax assessment letter for the years up to 2007 only within ten years after the incurrence of a tax liability, the end of a tax period (month) or the end of (part of) a tax year, but no later than 2013. For years… Read More

Products of Tax Audit

The legal products of a tax audit consist mainly of Tax Assessment Letters (Surat Ketetapan Pajak/SKP) as mentioned above and Tax Collection Letters (Surat Tagihan Pajak/STP ), which must be based on the closing conference document. A STP typically serves as a legal instrument to collect administrative tax sanctions not covered in a SKP. In… Read More

Closing Conference

At the end of a tax audit, the tax auditors will provide the taxpayer being audited with a written notification of the tax audit findings containing their proposed tax audit corrections. If there is a disagreement regarding the tax audit findings, the taxpayer must respond to the notification in writing within seven to ten working… Read More

Tax Audit’s Trigger Condition

A tax refund request will always trigger a tax audit. Due to the requirement for the DGT to decide on a refund request within 12 months, a tax audit will typically begin from a few weeks to several months from the refund request date. A corporate income tax refund request will normally trigger a complete… Read More

Other Avenues for Tax Dispute Resolution

The DGT, following a taxpayer’s Correction Request, or by virtue of its official position (ex-offcio), may correct or cancel a tax assessment letter, a STP, or their derivatives issued on the basis of those letters. The derivatives include, among others: Objection Decision Letters; Decision Letters on the Reduction or Cancellation of Administrative Sanctions; Decision Letters… Read More

Tax Dispute

A tax dispute between a taxpayer and the DGT will typically arise following the issuing of a tax assessment letter (SKP) by the DGT which the taxpayer does not agree with. A SKPKB, an SKPKBT, and a STP constitute legal tax collection instruments on the basis of which the DGT may issue a Distress Warrant… Read More