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

Judicial Review Request to the Supreme Court

A Tax Court Decision is considered to be a final decision with full legal force. However, the parties involved in a tax dispute may file a Judicial Review Request (Peninjauan Kembali/PK) for a Tax Court Decision with the Supreme Court. This can be done only if any of the following conditions prevail: The Decision has… Read More

Objections

A taxpayer who does not agree with a tax assessment letter can submit an Objection (Keberatan) to the DGT office within three months of the date of issue of the assessment letter. The Objection must state what the taxpayer has calculated as the tax due and set out the reasons for his or her disagreement… Read More

Appeals

A taxpayer who does not accept the DGT Objection decision can file an Appeal (Banding) with the Tax Court within three months of the receipt of the DGT Objection. To the extent that the DGT Objection Decision calls for a payment of tax due, according to the Tax Court Law, at least 50% of the… Read More

Accounting for Tax

Generally, for tax purposes, a company’s books must be maintained in accordance with the prevailing accounting standards unless the tax law stipulates otherwise. By default, the books must be stated in Rupiah, composed in Indonesian, and stored in Indonesia. Subject to specific DGT approval, foreign-investment Penanaman Modal Asing/PMA) companies, PEs, subsidiaries of foreign companies, taxpayers… Read More