| G.1 | Supervision of Tax Compliance |
| | The DGT routinely supervises taxpayers’ compliance, the guidelines for which are now stipulated under the Director General of Taxes Circular Letter Number SE-8/PJ/2026 concerning Guidelines for the Supervision of Taxpayers’ Compliance. This circular letter has been issued as guidelines for the implementation of the Minister of Finance Regulation No. 111 of 2025 (MoF Reg. 111/2025) as well as repeals 4 previous circular letters, including SE-05/PJ/2022. SE-8/PJ/2026 divides DGT supervision into 3 types. First, supervision of registered taxpayers. Second, the supervision of unregistered taxpayers, which is conducted through extensification activities. Third, regional supervision, which is conducted through economic data collection activities. The emphasis on geographic location is now specifically attached to regional supervision, for example, through field visits, canvassing as well as non-field data collection, such as web scraping and remote sensing. Meanwhile, the supervision of registered taxpayers is more driven by compliance risk profiles and data examination, rather than solely regional factors. The data and details underlying supervision originate from several sources. The first source is data and information from government agencies, institutions, associations and other parties (instansi pemerintah, lembaga, asosiasi, dan pihak lain/ILAP in Indonesian) pursuant to MoF Reg. 228/PMK.03/2017, as last amended by MoF Reg. 8/2026. This regulation adds 2 new mechanisms. First, the DGT is obliged to notify the data provider concerning the utilisation report on the data that has been submitted. Second, if the data is deemed insufficient, the DGT may collect additional data on an ad hoc basis through a request letter to the head of the relevant ILAP, which must be fulfilled no later than 1 month from receipt. The second source is information and/or evidence or details (informasi dan/atau bukti atau keterangan/IBK in Indonesian) from financial institutions and/or Crypto Assets Reporting Framework reporting crypto asset service providers (penyedia jasa aset kripto/PJAK in Indonesian, hereinafter referred to as CARF Reporting PJAK). The procedures are stipulated under the Director General of Taxes Circular Letter No. SE-9/PJ/2026. In the context of supervision, a request for IBK is intended for individuals or entities included in the list of analysis targets, list of supervision priorities and/or list of extensification priorities. The request may also include related parties, such as members of the family tax unit, management, taxpayer’s representatives, shareholders or beneficial owners. The request for IBK is submitted by primary executive officials at the DGT Head Office, the head of the DGT Regional Office or the head of the tax office, according to their scope of duties. A request may only be made after the proposal is approved and a supervision order is issued. The financial institution and/or CARF Reporting PJAK is required to provide the IBK no later than 1 month from the date the request is received. If it is late or incomplete, the DGT will send a request letter for the fulfilment of the obligations. If it remains unfulfilled, this is recorded as an indication of non-compliance by the financial institution/CARF Reporting PJAK concerned. In addition to for supervision, the IBK may also be utilised in audits as well as dispute resolution. Before the SP2DK is issued, the DGT first conducts a compliance examination, which consists of a formal compliance examination and a material compliance examination. One form of the formal compliance examination is the assessment of the timeliness and completeness of the fulfilment of administrative obligations. The material compliance examination is divided into 3 types based on its scope, namely: |
| | (i) | comprehensive examination, which covers all taxes of the taxpayer, including an analysis of business processes and financial statements; |
| | (ii) | Simple examination, which covers several or all taxes with a more limited scope; and |
| | (iii) | automated examination, which covers concrete data that is specific and limited in scope. |
| | | |
| IBK received from financial institutions/CARF Reporting PJAKs is utilised according to the source list from which it originates. For individuals or entities on the list of supervisory priorities, IBK serves as a basis for a comprehensive examination. Conversely, if it supports the list of analysis targets, the IBK is followed up on with the issuance of an analysis result report. Based on the results of the examination, the DGT may send a letter of inquiry (hereinafter referred to as surat permintaan penjelasan atas data dan/atau keterangan/SP2DK in Indonesian) to taxpayers. The SP2DK is issued by the head of tax office and may be submitted through the taxpayer account, registered electronic mail, facsimile, post/forwarding/courier services or in person to the taxpayer, representative, attorney, employee or adult family member of the taxpayer. Responses to an SP2DK are crucial, specifically, when data and information included in the SP2DK need clarification. A taxpayer is given a maximum of 14 days to respond from the time the SP2DK is issued or sent, whichever occurs first. The taxpayer may apply in writing for an extension for a maximum of 7 days. In case of absence of a response within this period, the DGT may follow up with a discussion and/or visit to the taxpayer's location. If the presumption of non-compliance by the DGT is not justifiable, either fully or partially, the taxpayers may respond to such a request and substantiate that the DGT’s presumption is unfounded. However, if such presumption of non-compliance is justifiable, the taxpayers may amend the tax refunds, pay any remaining tax payable discrepancies (if any) and file the tax returns according to the results of the examination. Please be aware that an interest penalty is associated with the payment of such remaining tax payable discrepancy. Based on the results of the examination of the taxpayer’s response, the DGT prepares a report on the results of the request for the explanation of data and/or information (laporan hasil permintaan penjelasan atas data dan/atau keterangan/LHP2DK in Indonesian), which contains conclusions and a proposal for the follow-up. If the taxpayer does not provide a response, or the response is deemed insufficient and/or does not correspond to the results of the DGT’s examination, the DGT may increase the level of law enforcement to a proposed audit, or if an indication of a tax crime is found, a proposal for a preliminary audit. In addition to the SP2DK, the DGT may issue advisory letters (surat imbauan) and warning letters (surat teguran). An advisory letter is issued regarding obligations such as taxable person (PKP) registration, tax payment, tax reporting and current-year income tax instalments. A response to an advisory letter is also due within a maximum of 14 days. A warning letter is issued, among others, when a tax return is not filed on time. |
| | | | | | | |
| G.2 | Tax Audits |
| | The director general of taxes, in order to supervise tax compliance, is authorised to conduct audits for: |
| | (i) | assessing compliance with the fulfilment of tax obligations; and/or |
| | (ii) | other purposes in the context of implementing statutory provisions in the field of taxation. |
| | | | | | | |
| | Pursuant to the provisions under MoF Reg. 15/2025, the director general of taxes delegates the authority to conduct tax audits to officials within the DGT. Based on MoF Reg. 15/2025, tax audits to assess compliance are conducted in 3 types: |
| | (i) | complete audits, with a 5-month assessment period. |
| | (ii) | focused audits, with a 3-month assessment period. |
| | (iii) | specific audits, with a 1-month assessment period. |
| | |
| | The period is calculated from the date the notice of tax audit is delivered to the taxpayer, their representative as well as their attorney until the date the notice of tax audit findings (surat pemberitahuan hasil pemeriksaan/SPHP in Indonesian) is submitted to the parties. In this case, the scope of the audit to assess compliance with tax obligations may include a single, several or all taxes, either for one or several taxable periods, fractions of a tax year or tax years, including one or several L&B Tax objects. The types of taxes include income tax, VAT, STLGs, stamp duty, L&B Tax, sales tax, carbon tax and other taxes administered by the DGT. Audits for other purposes may be in the form of the determination, matching, fulfilment of obligations pursuant to statutory provisions or the collection materials related to the audit objectives. The period of the closing conference and reporting is set at a maximum of 30 business days, calculated from the date the notice of tax audit findings is submitted to the taxpayer, taxpayer’s representative or taxpayer’s attorney to the date of the tax audit report (laporan hasil pemeriksaan/LHP in Indonesian). For specific audits based on concrete data, resulting in tax payable not being unpaid or underpaid, a different period applies. In this case, the assessment and reporting periods are a maximum of 10 business days respectively. The assessment period for taxpayers within 1 group as well as taxpayers indicated to conduct transfer pricing transactions and/or other special transactions that indicate the existence of financial transaction engineering, may be extended for a maximum of 4 months. If extended, the auditors must notify the taxpayer of the extension of the assessment period. For audits related to the settlement of taxpayers’ applications, MoF Reg. 15/2025 shall comply with the period under the respective provisions, for example, the periods of the following: |
| |
| |
| |
| |
| | (i) | the tax refund period shall comply with Art. 17B of the GPTP Law; |
| | (ii) | the TIN deregistration period shall comply with Art. 2 paragraph (7) of the GPTP Law; |
| | (iii) | the taxable person deregistration period shall comply with Art. 2 paragraph (9) of the GPTP Law; and/or |
| | (iv) | other periods shall comply with tax provisions. |
| | | | | | | |
| Audits for oil and gas income tax on a contractor taxpayer of oil and gas cooperation contract (kontrak kerja sama/KKS in Indonesian) and a cooperation contract with a production sharing contract with cost recovery also apply differently and are further stipulated under MoF Reg. 34/PMK.03/2018, as amended by MoF Reg. 94/2023. The director general of taxes, after auditing the application for a tax refund using the general mechanism, must issue a notice of tax assessment within a maximum period of 12 months from the time the application letter is completely received. If the DGT does not issue a decision within the period, the application is deemed approved, and a notice of tax overpayment assessment must be issued within a maximum period of 1 month (Art. 17B paragraph (2) of the GPTP Law). Preliminary refunds operate differently. The DGT does not conduct an audit first, but examines the application and issues the preliminary tax refund decision letter within a shorter period. A taxpayer that has received a preliminary refund is automatically included in the criteria for audits to assess compliance. This audit is conducted after the refund has been granted, and the 12-month period does not apply in this case. The DGT may issue a notice of tax assessment (a notice of tax underpayment assessment, a notice of nil tax assessment or a notice of tax overpayment assessment) within a period of 5 years, namely insofar as the statute of limitations for assessments has not elapsed. The audit is implemented pursuant to the provisions under MoF Reg. 15/2025. If a notice of tax underpayment assessment is issued from the audit, the taxpayer is subject to a 100% surcharge of tax underpayment. This penalty is reduced to interest pursuant to Art. 13 paragraph (2) of the GPTP Law, specifically for certain criteria taxpayers and individual taxpayers with an overpayment of a maximum of IDR 100 million pursuant to the provisions under MoF Reg. 28/2026. Thus, taxpayers are advised to choose either the general mechanism or preliminary tax refunds carefully. For an application for preliminary VAT refunds followed up on pursuant to Art. 17B of the GPTP Law and PER-6/PJ/2025, as amended by PER-16/PJ/2025, audit findings stating an overpayment shall be treated as follows: |
| |
| |
| | (i) | for VAT overpayment in the taxable periods other than the end of the accounting year and there are no certain activities, the VAT overpayment is carried forward to the next taxable period; |
| | (ii) | for VAT overpayment in the taxable periods other than the end of the accounting year and there are certain activities, the VAT overpayment is granted refunds; or |
| | (iii) | for VAT overpayment in the taxable period at the end of the accounting year, the VAT overpayment is granted refunds. |
| | | | | | | |
| | Moreover, audits must be conducted according to audit standards, which cover 3 stages. First, audit general standards are the minimum requirements for tax auditors. MoF Reg. 15/2025 stipulates that tax auditors must receive adequate technical education and/or training, have skills as tax auditors, have integrity and independence in implementing their duties as tax auditors. Second, audit implementation standards. The implementation standards include the preparation, assessment based on audit methods and techniques, basing the audit findings on strong and relevant evidence as well as based on statutory provisions in the field of taxation, implementing audits at the DGT office or the taxpayer's residence or domicile and documenting the implementation of audits in audit working papers (kertas kerja pemeriksaan/KKP in Indonesian). Third, audit finding reporting standards, namely a tax audit report prepared based on the audit working paper, which contains the implementation of the audit, conclusions and proposals of the tax auditors as well as may contain the disclosure of other information related to the audit. Further provisions on audit standards can be found in PER-23/PJ/2013. An audit to assess compliance with the fulfilment of tax obligations is conducted, among others, when there is concrete data that causes tax payable to be unpaid or underpaid. The concrete data includes tax invoices that have been approved through the DGT system but have not yet been filed in the periodic VAT returns, withholding tax/income tax collection receipts that have not been filed by the issuer and/or proof of transactions or tax data that may be used to calculate tax liabilities. The concrete data is followed up through a simple assessment. An example of data that still requires further assessment are the results of the equalisation of output VAT with income tax business turnover or the results of the assessment. Such data requires a prior analysis to determine the potential tax payable. During an audit, the auditor conduct direct and indirect assessments according to the DGT’s audit guidelines. Indirect assessment is, among others, in the form of the assessment of cash and bank transactions, ratio calculation and/or additional net worth. The auditors may also reconcile tax accounts against financial accounts. As one of the sources of audit evidence, the tax auditors are also authorised to request IBK from financial institutions and/or CARF Reporting PJAKs. This request is conducted based on an audit order, as stipulated under SE-9/PJ/2026. A request for IBK may include an audited taxpayer as well as the management, taxpayer’s representatives, shareholders or beneficial owners. The request may also include other related parties, such as the dependants of an individual taxpayer in a family tax unit or parties having a direct transactional relationship with the taxpayer. Specifically for these related parties, the request for IBK may only be conducted after the approval of the head of the audit implementing unit on the results of the underlying analysis. The IBK received is used as materials and/or evidence in the audit. In addition, the IBK must be outlined in the audit working paper (kertas kerja pemeriksaan/KKP in Indonesian) as an integral part of the audit documents. During a tax audit, taxpayers may voluntarily disclose the incorrectness in the completion of the tax returns, insofar as the tax auditors has not submitted a notice of tax audit findings, by applying Art. 8 paragraph (4) of the GPTP Law. The disclosure of incorrectness in the completion of the tax returns is outlined in a separate report, signed by the taxpayer, representative or attorney and attached with: |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | (i) | the calculation of the underpaid tax according to actual circumstances in the format of the tax return; |
| | (ii) | the tax payment slip or other administrative means equivalent to the tax payment slip for the payment of the underpaid tax; and |
| | (iii) | the tax payment slip or other administrative means equivalent to the tax payment slip for the payment of administrative penalties in the form of interest pursuant to Art. 8 paragraph (5) of the GPTP Law. |
| | | | | | | |
| | The separate report and the attachments thereto must be submitted by the taxpayer to the audit implementing unit. Tax underpayments caused by this disclosure are liable to interest amounting to the monthly interest rate determined by the minister of finance of the tax underpayment for a maximum of 24 months. At the final stage, the DGT will issue the notice of tax audit findings. The taxpayer is required to provide a written response to the notice of tax audit findings and the list of audit findings within 5 business days from the time the notice of tax audit findings is received. Pursuant to MoF Reg. 15/2025, there is no time extension the taxpayer to provide a written response. If there is no response to the notice of tax audit findings within the specified period, the tax auditors will prepare an official report of non-submission of the response to the notice of tax audit findings and signed by the tax auditors. Further, a closing conference is conducted, attended by the taxpayer and tax auditors. The tax auditors subsequently prepare the minutes of discussion, which are signed by the tax auditors and the taxpayer, the taxpayer’s representative or attorney. The taxpayer, their representative or attorney may subsequently apply for a discussion with the audit quality assurance team. The discussion may only be conducted if there are dissenting opinions in the minutes limited to the legal basis for the corrections. The application is submitted no later than 3 business days from the signing of the minutes and carbon copied to the audit implementing unit. If no application is submitted, the auditors prepare an official report, attached with an overview of the results of the closing conference, signed by both parties. If an application is submitted, the auditors prepare the official report with an overview of the results of the closing conference after the discussion with the quality assurance team has been implemented. The tax audit is completed by preparing a tax audit report or, if the audit is terminated, a summary of the tax audit report. The tax audit report to assess compliance with the fulfilment of tax obligations constitutes the basis for the issuance of the notice of tax assessment, notice of L&B Tax assessment and/or notice of tax collection. In the event of an underpayment tax assessment, the underpaid tax is subject to an administrative penalty in the form of interest. See Section G.9 Administrative and Criminal Penalties for a summary of tax administrative penalties. Procedures for the issuance of notices of tax assessment and notices of tax collection, including for L&B Tax, stamp duty and carbon tax, are stipulated under MoF Reg. 80/2023. In addition to integrating notices of tax assessment and notices of tax collection regulations, MoF Reg. 80/2023 also stipulate notices of tax assessment and notices of tax collection for stamp duty and carbon tax which were not stipulated under the former regulations. Information on the underlying reasons for the issuance of notices of tax collection can be seen in the DDTCNews article and the basis for the issuance of notices of tax collection can also be seen in the DDTCNews article. For taxpayers that maintain bookkeeping in English and USD, the DGT may issue notices of tax assessment and notices of tax collection in English and USD, except for notices of tax collections for administrative penalties pursuant to Art. 7 of the GPTP Law, which remain issued in rupiah. |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | | | | | | |
| G.3 | Interest Compensation |
| | Interest compensation is granted to a taxpayer in the following 4 conditions. First, if the DGT is late in issuing a tax refund decision letter. Second, if the DGT is late in refunding the tax overpayment. Third, if a taxpayer’s objection, application for an appeal or application for a civil review is partially or entirely granted, thereby, resulting in tax overpayment. Fourth, if an application for the amendment, relief or cancellation of a notice of tax assessment or application for the relief or cancellation of a notice of tax collection is partially or entirely granted, resulting in a tax overpayment. For the third condition, interest compensation is granted for the tax overpayment at a maximum amount of the overpayment agreed upon by the taxpayer in the closing conference. Further provisions on the application for interest compensation and the calculation of interest compensation can be seen in PER-10/PJ/2024, as amended by PER-8/PJ/2026. |
| |
| | | | | | | |
| G.4 | Administrative Remedies |
| | Administrative remedies are non-judicial remedies allowed by the law to be filed with the DGT. Pursuant to Art. 36 of the GPTP Law, a remedy may be filed against a notice of tax collection or notice of tax assessment. Pursuant to MoF Reg. 118/2024, as amended by MoF Reg. 71/2026, the director general of taxes, ex officio or based on the application by a taxpayer, may: |
| | (i) | reduce or nullify administrative penalties in the form of interest, fines and surcharges imposed due to the taxpayer’s negligence or not due to their fault, including L&B Tax administrative fines due to certain matters; |
| | (ii) | reduce or cancel an incorrect notice of tax assessment, including a notice of tax due and notice of L&B Tax assessment; |
| | (iii) | reduce or cancel an incorrect notice of tax collection, including a notice of L&B Tax collection; or |
| | (iv) | cancel a notice of tax assessment, including a notice of L&B Tax assessment from audit findings implemented without the submission of the notice of tax audit findings and/or closing conference with the taxpayer. |
| | | | | | | |
| | MoF Reg. 71/2026 amends the provisions on applications for the reduction or nullification of administrative penalties. Penalties that may be applied for include penalties in notices of assessment, penalties in notices of tax collection and L&B Tax administrative fines in notices of L&B Tax assessment or notices of L&B Tax collection. The payment for a notice of assessment or a notice of tax collection is first set off against the tax principal. The excess is set off against administrative penalties or L&B Tax administrative fines. As a relaxation, the director general of taxes may reduce or nullify administrative penalties or reduce L&B Tax administrative fines for notices of assessment, notices of L&B Tax collection, notices of tax collection or notices of L&B Tax collection. The application must be submitted no later than 2 years from 2 October 2026. Moreover, taxpayers may also file objections pursuant to Art. 25 of the GPTP Law. The objections may be filed to the DGT within a maximum of 3 months from the date of tax withholding or collection or the date the notice of tax assessment is delivered. The deadline does not apply if the taxpayer is able to demonstrate force majeure. Objections may only be filed against the materials or contents of the notice of tax assessment, which include the amount of loss, the amount of tax or against the materials/contents of the withholding tax or tax collection. The filing is conducted electronically via the taxpayer portal in the Coretax system. Before issuing an objection decision letter, the DGT submits a notice to attend (surat pemberitahuan untuk hadir/SPUH in Indonesian). Taxpayers that are not present may submit a response letter to the results of the examination of the objection no later than 10 business days from the time the letter is sent. The objection continues to be resolved without waiting for the taxpayer’s presence. The DGT must decide on the objection filed by the taxpayer in a period of 12 months from the date the objection letter is received. The DGT’s objection decision may be in the form of entirely or partially granting, rejecting or increasing the amount of tax payable outlined in the objection decision letter. If, within 12 months, the DGT does not issue a decision, the objection is deemed granted. To support the resolution of objections, appeals, civil reviews as well as applications for the reduction or cancellation of tax assessments or administrative penalties, the DGT may also request IBK. Such requests are submitted to financial institutions and/or CARF Reporting PJAKs based on assignment documents, pursuant to SE-9/PJ/2026. The request for IBK is addressed at the taxpayer concerned as well as related parties, such as family members, management, the taxpayer’s representatives, shareholders or beneficial owners. The results of the IBK are used, among others, to: |
| |
| |
| |
| |
| | (i) | assess and substantiate the reasons put forward by the taxpayer in the objection letter; |
| | (ii) | strengthen the arguments to uphold the disputed adjustment; |
| | (iii) | fulfil the panel of judges' requests concerning the submission of evidence during the hearing; and |
| | (iv) | assess the reasons for the reduction or cancellation of an incorrect notice of tax assessment. |
| | | |
| | Against the objection decision, the taxpayer may file an appeal with the Tax Court. For the taxpayer’s written request for appeal purposes, the director general of taxes must submit a certificate concerning the matters constituting the objection decision letter issued no later than 1 month from the date the request is received. Active tax collection efforts, including those resulting in a notice of confiscation, are undertaken in response to any unpaid taxes or penalties in a notice of tax assessment, except those connected to a dispute against which an objection is filed. In the event that a taxpayer files an objection against a notice of tax assessment, the taxpayer is required to settle the outstanding tax at a minimum of the amount agreed upon by the taxpayer in the closing conference before the objection letter is submitted. The amount of tax that has not been paid when the objection is filed is deferred for up to 1 month from the date of issuance of the objection decision letter. During the objection, the interest on the notice of tax assessment that has matured is not assessed. If the objection is rejected or partially granted, the taxpayer is subject to an administrative penalty in the form of a fine of 30% of the amount of tax based on the objection decision subtracted by the tax that has been paid before the objection is filed. |
| | (i) | increases the amount of outstanding tax; |
| | (ii) | is subject to an appeal with an appeal decision in the form of unacceptable; or |
| | (iii) | an appeal is filed but is revoked. |
| | | | | | | |
| | Please note that the 30% fine does not apply to an objection decision on a notice of tax due or notice of L&B Tax assessment. The fine will not be imposed if the taxpayer revokes their objection, if the taxpayer’s objection is not considered because it does not fulfil the requirements or if the taxpayer files an appeal against an objection decision letter. Please see the section regarding the tax appeal below. Please note that if a taxpayer files a tax appeal to the DGT, the interest on the overdue notice of tax assessment will not be assessed. |
| |
| |
| | | | | | | |
| G.5 | Tax Appeal (Banding in Indonesian) |
| | A taxpayer may file an appeal to the Tax Court following the tax objection decision letter. The appeal may be filed by a taxpayer, his or her heir or heiress, management or an attorney. The application letter for an appeal must be filed within a period of 3 months after receiving the decision subject to the appeal (the objection decision). The deadline does not apply if the taxpayer is able to show a case of force majeure. Starting 1 November 2024, the Tax Court provides services electronically through e-Tax Court. However, manual appeals may be filed, even though the Tax Court's counter A no longer handles application letters for appeals. However, the e-Tax Court platform remains the primary channel. Please note that unpaid taxes when an objection is filed do not have to be paid before an appeal is filed. The amount of unpaid taxes is deferred for up to 1 month from the date the appeal decision is issued (Art. 27 paragraph (5a) of the GPTP Law) and such an amount is not included in tax liabilities. The taxpayer is only liable to pay the amount of taxes agreed upon during the audit and should have been paid by the taxpayer before filing an objection. If the Tax Court rules to reject or partially grant the taxpayer’s application for the appeal, the taxpayer is liable for a 60% fine of the amount of taxes based on the appeal decision subtracted by the amount of paid taxes before the objection is filed. Payments made following the filing of an objection will not be taken into account when calculating the penalty. If an appeal is partially or entirely granted, resulting in a tax overpayment, the taxpayer is given interest compensation. However, if the taxpayer has paid tax payable based on the notice of tax underpayment assessment as the matter in dispute before filing the tax objection, the taxpayer cannot request interest compensation for the Tax Court decision which partially or entirely grants the taxpayer’s objection or appeal. Therefore, the DGT will refund the paid taxes without interest compensation. |
| |
| |
| |
| |
| |
| | | | | | | |
| G.6 | Lawsuits (Gugatan in Indonesian) |
| | A lawsuit is a legal remedy that may be filed by a taxpayer or tax bearer against the implementation of tax collection or against a decision that may be subject to a lawsuit pursuant to the applicable tax provisions. Taxpayers may file a lawsuit to the Tax Court against a decision letter from the DGT, i.e., a decision on a taxpayer’s application pursuant to Art. 36 paragraph (1) of the GPTP Law. A lawsuit may be filed by the plaintiff, his or her heir or heiress, management or an attorney accompanied by clear reasons, stating the date of receipt, the implementation of collection or the decision subject to the lawsuit and attached with copies of the documents subject to the lawsuit. Against the implementation of collection or 1 decision, 1 lawsuit letter may be filed. Since the issuance of the Tax Court Chief Justice Reg. No. PER-1/PP/2023, appeal or lawsuit administrative processes may be conducted electronically through the e-Tax Court. Lawsuits may also be delivered by post or forwarding services to the Tax Court. Taxpayers or tax bearers may also file lawsuits against other DGT’s assessments or decisions pursuant to Art. 23 paragraph (2) of the GPTP Law, namely. |
| |
| |
| |
| | (i) | Implementation of a distress warrant, confiscation order or auction notice; |
| | (ii) | Decision on travel ban in the framework of tax collection; |
| | (iii) | Decisions that relate to the implementation of tax decisions, other than those stipulated in Art. 25 paragraph (1) and Art. 26 of the GPTP Law; or |
| | (iv) | The issuance of a notice of tax assessment or objection decision letter that does not comply with the procedures stipulated under statutory tax provisions. |
| | | | | | | |
| | In other words, other DGT’s decisions that give rise to certain tax consequences for taxpayers may be subject to a lawsuit. If the consequences can be evidenced, the Tax Court will evaluate the case and decide whether the case may resolved through a lawsuit at the Tax Court. The lawsuit on other DGT’s decisions shall be filed within a period of 30 days from the date the decision subject to the lawsuit is received. In another situation, a taxpayer receiving a confiscation order due to tax collection may file a lawsuit against the notification of confiscation within 14 days from the date of the implementation of collection. A lawsuit against the implementation of collection may be filed: |
| |
| |
| | (i) | If the taxpayer has filed for dispute resolution for tax payable and is in financial distress and requests that all tax collection efforts, (including a confiscation) be suspended until the pertinent dispute resolution has been issued; or |
| | (ii) | If the confiscation process is procedurally flawed, which may lead to the confiscation being reprocessed. |
| | | | | | | |
| G.7 | Civil Review (Peninjauan Kembali in Indonesian) |
| | Taxpayers or the DGT may file a civil review application to the Supreme Court. The application for a civil review may only be submitted once if the Tax Court’s decision is deemed unfavourable to one of the parties. Pursuant to Art. 91 of the Tax Court Law (TCL), the application for a civil review may be submitted based on the following reasons. |
| | (i) | The Tax Court decision is based on perjury or deception of the opponent discovered after the case has been decided or is based on evidence that is later declared false by the judge of the criminal case; |
| | (ii) | There is new vital and decisive written evidence, which if discovered at the trial proceeding at the Tax Court would have resulted in a different decision; |
| | (iii) | An ultra petita decision (the granting of one or more matter not being sued for the plaintiff, except for the decided matter); |
| | (iv) | A part of the prosecution has not been decided without considering the reasons; or |
| | (v) | Tax Court’s decision clearly violates the applicable statutory provisions. |
| | | | | | | |
| | A civil review application is required to be filed within 3 months since the following events. |
| | (i) | The discovery of the perjury or deception or since the decision of the judge of the criminal court obtains permanent legal force for the reason referred to in number (i) above (Art. 92 paragraph (1) of the TCL); |
| | (ii) | The discovery of the documents of evidence of which the date of discovery must be declared under oath and ratified by the competent authority for the reason referred to in number (ii) above (Art. 92 paragraph (2) of the TCL); or |
| | (iii) | The Tax Court decision being sent for the reasons referred to in numbers (iii), (iv) and (v) above (Art. 92 paragraph (3) of the TCL). |
| | | | | | | |
| | The application for civil review must be filed with the Supreme Court via the secretariat of the Tax Court. Once receiving a civil review memorial, the secretariat of the Tax Court will forward the petitioner’s civil review memorial and request the respondent to file a counter-civil review memorial to the Tax Court. The secretariat of the Tax Court subsequently compiles the full dossier, forward it to the Supreme Court and register the case in the system accessible to the public on the Supreme Court website. The public can monitor the progress of the civil review case on the Supreme Court website. The application for a civil review does not defer or terminate the implementation of the Tax Court Decision. If a civil review decision increases the amount of outstanding tax, the taxpayer is subject to a fine penalty of 60% of the amount of tax based on the civil review decision subtracted by the tax that has been paid before an objection is filed. The notice of tax collection for this administrative penalty is issued no later than 2 years from the date the decision is received by the DGT. |
| |
| |
| | | | | | | |
| G.8 | Tax Crimes |
| | There are 2 pathways leading to a preliminary audit. First, an escalation of the results from the supervision of compliance activities pursuant to SE-9/PJ/2026. This pathway may originate from a material compliance examination that uncovers indications of a tax crime or from the follow-up to a request for an explanation of data and/or details to which the taxpayer fails to provide an adequate response. Second, the pathway of indications of non-compliance by financial institutions and/or CARF Reporting PJAKs regarding their obligation to provide IBK, as stipulated under SE-9/PJ/2026. Such indications may be immediately followed up with development and analysis. The DGT does not need to await the report on indications of non-compliance to be prepared or submitted on a periodic basis, provided that the follow-up remains consistent with the provisions on preliminary audits and tax crime investigations. The director general of taxes, based on information, data, reports and complaints, is authorised to conduct a preliminary audit before conducting a tax crime investigation. Pursuant to Art. 43A of the GPTP Law, a preliminary audit has the same purpose and status as an investigation. The procedures are stipulated under MoF Reg. 177/PMK.03/2022 with the technical instructions therefor in SE-1/PJ/2024. A preliminary audit is conducted for a taxable period, fraction of a tax year or tax year, whether a notice of tax assessment has been issued or not. In the event that a notice of tax assessment has been issued, the preliminary audit may be conducted based on data containing the allegation of a tax crime other than that listed in the notice of tax assessment. Please note that the preliminary audit may only be conducted if the statute of limitations for the prosecution of a tax crime, which is 10 years, has not yet elapsed. During a preliminary audit, the taxpayer may voluntarily disclose a committed tax crime and have criminal exposure due to the taxpayer’s wilful violation of the tax law. In connection with the voluntary disclosure, the taxpayer is required to pay any tax underpayment as well as the administrative penalty in the form of a fine of 100% of the amount of the underpaid tax. Such disclosure may only be conducted provided that a tax crime investigation has not yet begun. If the DGT accepts the disclosure, no tax crime investigation will commence. In this case, a tax crime investigation is conducted based on an investigation order based on an incident report. Pursuant to MoF Reg. 17/2025, an incident report is sourced from a preliminary audit, the handling of immediately discovered crime or the development of an investigation. Tax crimes typically include conducting fictitious transactions, issuing or utilising fictitious tax invoices or retaining withholding receipts or tax payment slips, failing to file a tax return, filing a tax return that is erroneous or incomplete or using false information in the tax return all of which resulting in losses to state revenues. An investigation for state revenue purposes may be terminated pursuant to the provisions under MoF Reg. 17/2025 based on the application for the termination of a tax crime investigation. The taxpayer may submit an application letter to the minister of finance through the director general of taxes. The minister of finance subsequently submits a request to terminate the investigation to the attorney general, provided that the responsibility for the suspect and evidence has not been transferred to the public prosecutor. The termination is only conducted after the taxpayer or suspect settles: |
| |
| |
| |
| |
| |
| |
| |
| | (i) | the losses to state revenues pursuant to Art. 38 of the GPTP Law plus an administrative penalty in the form of a fine of 1 time the amount of the losses to state revenues; |
| | (ii) | the losses to state revenues pursuant to Art. 39 of the GPTP Law plus an administrative penalty in the form of a fine of 3 times the amount of the losses to state revenues; and/or |
| | (iii) | the amount of tax in the tax invoice, collection receipt, withholding receipt and/or tax payment slip pursuant to Art. 39A of the GPTP Law plus an administrative penalty in the form of a fine of 4 times the amount of tax in the tax invoice, collection receipt, withholding receipt and/or tax payment slip. |
| | | | | | | |
| | The application of the administrative penalty in the form of a fine applies differently if the taxpayer or suspect is subject to criminal penalties. Pursuant to MoF Reg. 17/2025, the application of the administrative penalty in the form of a fine is applied as follows. First, if the taxpayer or suspect is punishable alternatively by more than 1 criminal penalty, the highest administrative penalty shall be applied. Second, if the taxpayer or suspect is cumulatively punishable by more than 1 criminal penalty, administrative penalties are applied cumulatively. If a case continues to the prosecution and hearing stage, the handling will now refer to Supreme Court Regulation No. 3 of 2025 (SC Reg. No. 3/2025) concerning Guidelines for the Handling of Tax Crime Cases. This SC Reg. expands the scope of criminal liability, regulates the authority of investigators to block/confiscate assets as well as allows individual defendants to avoid imprisonment if they settle the principal amount of taxes and administrative penalties before the decision is made. Finally, Sub-subchapter G.9.2 explains that Law 1 of 2026 concerning Criminal Penalty Adjustments harmonises tax criminal provisions with the National Criminal Code. This regulation inserts Article 613 paragraph (3) into the National Criminal Code, which affirms the ultimum remedium principle specifically for tax crimes. In this case, administrative penalties and other penalties must take precedence before the imposition of criminal penalties. This affirmation is noteworthy because for the first time, the principle of “criminal penalty as a last resort” in tax law enforcement is explicitly outlined at the legal level. Thus, administrative channels, such as amendments of tax returns, payment of tax underpayments as well as interest/surcharge penalties and disclosure of incorrectness of tax returns, should be prioritised before the case is directed to the criminal realm, unless there are other considerations that justify the precedence of criminal enforcement. |
| | | | | | | |
| G.9 | Administrative and Criminal Penalties |
| | Tax law enforcement is classified into administrative and criminal law enforcement. Administrative violations will be subject to administrative penalties in the form of fines, interest or surcharges. On the other hand, criminal offenses will be subject to criminal penalties in the form of imprisonment, detention and/or fine sentences. |
| | | | | | | |
| | G.9.1 | Administrative Penalties |
| | | In practice, administrative penalties are divided into 3 types: fines, interest and surcharges. The following 3 tables summarise the provisions related to each administrative penalty. |
| | | | | | | |
Table 2.5 Fines |
|
| | | Source: processed by the Author. |
| | | | | | | |
Table 2.6 Interest |
|
| | | Source: processed by the Author. |
| | | | | | | |
Table 2.7 Surcharges |
|
| | | Source: processed by the Author. |
| * | Art. 13 paragraph (3a): In the event that administrative penalties in the form of interest and surcharges are imposed based on audit findings on VAT and STLGs, only 1 type of administrative penalty, the one with the higher amount, shall be applied. |
| ** | No surcharge penalty is imposed if the notice of additional tax underpayment assessment is issued based on voluntary written details from the taxpayer, provided that an audit has not been conducted in connection with the issuance of the notice of additional tax underpayment assessment. |
| | | | | | | |
| | G.9.2 | Criminal Penalties |
| | | Since 2 January 2026, criminal provisions in various sectoral laws, including the GPTP Law, have been adjusted through Law No. 1 of 2026 concerning Criminal Penalty Adjustments (Law 1/2026). This adjustment aligns criminal provisions outside the Criminal Code with the new penal system in the Criminal Code (Law 1/2023). There are 3 key changes that are relevant to criminal tax provisions: |
| | | (i) | special minimum penalties are deleted; |
| | | (ii) | the combination of imprisonment and criminal fines becomes optional; and |
| | | (iii) | fines with a fixed nominal amount are converted to the category system of the Criminal Code. |
| | | | | | | |
| | | The categories of criminal fines pursuant to the Criminal Code serving as a reference for conversion are as follows. |
| | | (i) | category I, IDR1 million; |
| | | (ii) | category II, IDR10 million; |
| | | (iii) | category III, IDR50 million; |
| | | (iv) | category IV, IDR200 million; |
| | | (v) | category V, IDR500 million; |
| | | (vi) | category VI, IDR2 billion; |
| | | (vii) | category VII, IDR5 billion; and |
| | | (viii) | category VIII, IDR50 billion. |
| | | | | | | |
Table 2.8 Administrative and/or Criminal Penalties |
|
| | | Source: processed by the Author. |
