Tax Resolution Services

Indonesian tax laws and regulations provide several tax resolution mechanisms that taxpayers can use to solve problems that may arise between taxpayers and tax authorities. The available tax resolution mechanisms include:

1. Voluntary Revision
   • If the taxpayer realizes that there is an error in filling out the tax return that has been submitted, the taxpayer has the right to correct it based on their own will. The condition is that the tax authority has not started any tax audit action. If there is a larger tax debt due to the correction of the tax return, interest sanctions will be imposed.
2. Voluntary Disclosure
   • The taxpayer, with their awareness, can disclose the inaccuracy of the submitted tax return in a separate report if the tax authority has audited it. The disclosure of untruth must be carried out before the issuance of a notification letter of audit results. Following that, the audit process continues to prove the report’s veracity.
3. Reduction or Removal of Sanctions
   • The Director General of Taxes, by position or based on the taxpayer’s application, can reduce or remove administrative sanctions in the form of fines, interest, and tax increases owed following the provisions of tax legislation if the sanctions are imposed due to the taxpayer’s incomprehension of tax regulations or not due to their fault. The application for the reduction or elimination of administrative sanctions can only be submitted twice.
4. Installment or Delay in Payment of Taxes
   • If the taxpayer experiences liquidity difficulties or circumstances beyond their control, making them unable to fulfill tax obligations on time, the taxpayer can apply to pay an installment or postpone the payment of taxes owed based on the Annual Income Tax Return, Tax Return Payable, STP, SKPKB and SKPKBT, Objection Decree, Rectification Decree, Appeal Decision, and a Review Ruling. The taxpayer must provide a guarantee of tangible assets with the following criteria:
     • Tangible assets that belong to the tax insurer which can be proven by proof of ownership of the assets.
     • Tangible assets that are not currently used as collateral for the debt of the tax insurer.
   • Delays or installments can be given by the tax authority no later than 24 months from the issuance of the decision or until the deadline for submitting the Annual Tax Return.
5. Diversion Program
   • If the taxpayer has conducted a tax criminal audit, the taxpayer can willingly disclose the untruthfulness of their actions with a written statement, either for not submitting the tax return or submitting the tax return with incorrect or incomplete content or attachment, either intentionally or due to negligence, as long as the investigation has not been notified to the public prosecutor through the investigator. The sanction for disclosure of untruthfulness involves paying the amount of tax owed and an administrative fine of 100% of the amount of underpaid tax.
   • In the interest of state revenue, at the request of the Minister of Finance, the attorney general may stop the investigation of criminal acts in the field of taxation. Termination of the investigation may be carried out if the taxpayer or suspect has paid off:
     • Losses on state revenues as referred to in Article 38 plus administrative sanctions in the form of fines of 100% of the amount of losses on state revenues.
     • Losses on state revenues as referred to in Article 39 plus administrative sanctions in the form of fines of 300% of the amount of losses on state revenues.
     • The amount of tax in the tax invoice, proof of tax collection, proof of withholding tax, and/or proof of tax deposit as referred to in Article 39A plus administrative sanctions in the form of a fine of 400% of the amount of tax in the tax invoice, proof of tax collection, proof of withholding tax, and/or proof of tax deposit.
   • If the tax criminal case has been transferred to the court, the defendant can still pay off the state losses as described above, and the repayment is considered for prosecution without the imposition of imprisonment.
6. Tax Objections and Appeals
   • Tax authorities can conduct audits to test taxpayer compliance in fulfilling their tax obligations. In its implementation, taxpayers can approve or refute the tax audit results. The tax authority will issue a decree upon completion of the tax inspection. If the taxpayer disagrees with the decree, they can file an objection with the tax authority and appeal to the tax court.