General Provision 2007 Tax Law

THE THIRD AMENDMENT TO LAW NUMBER 6 YEAR 1983 REGARDING
TAXATION GENERAL PROVISIONS AND PROCEDURES

(Law No. 28/2007 dated July 17, 2007)
BY THE GRACE OF GOD ALMIGHTY
THE PRESIDENT OF THE REPUBLIC OF INDONESIA,
Considering:
a. That in the framework of providing better justice and enhance service for taxpayers and in
order to better provide legal certainly as well as to anticipate development in information
technology and developments of material provisions in the taxation sector, it is necessary to
amend Law Number 6 Year 1983 regarding Taxation General Provisions and Procedures as
already amended by Law Number 16 Year 2000;
b. That based on the consideration as meant in letter a, its necessary to enact a law regarding
the Third Amendment to Law Number 6 Year 1983 concerning Taxation General Provisions
and Procedures;
In view of:
1. Article 5 paragraph (1), Article 20 and Article 23 of the 1945 Constitution
2. Law No. 6/1983 on Taxation General Provisions and Procedures (Statute Book of the
Republic of Indonesia of 1983 No. 49, Supplement to Statute Book No. 3262) as already
amended several times and the latest by Law No. 16/2000 (Statute Book of Republic of
Indonesia of 2000 No. 126, Supplement to Statute Book No. 3984);
With the approval of
THE HOUSE OF REPRESENTATIVES OF
THE REPUBLIC OF INDONESIA
D E C I D E S:
To stipulate:
LAW REGARDING THE THIRD AMENDMENT TO LAW NUMBER 6 YEAR 1983CONCERNING TAXATION GENERAL PROVISIONS AND PROCEDURES.
Article I
Several provisions in Law Number 6 Year 1983 regarding Taxation General Provisions
and Procedures (Statute Book of the Republic of Indonesia of 1983 No. 49, Supplement to Statute
Book No. 3262) as already amended several times and the latest by Law Number 16 Year 2000
(Statute Book of the Republic of Indonesia of 2000 No. 126, Supplement to Statute Book No.
3984) shall be amended as follows:
1. Provisions in Article 1 shall be amended so to read as follows:
Article 1
Hereinafter referred to as:
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1. Taxes shall be compulsory contributions to the state, which are indebted forcefully by
individuals or bodies on the basis of law, without obtaining compensation directly and
used for the need of the state for the peoples welfare maximally.
2. Taxpayers shall be individuals or bodies, covering taxpayers, tax withholders and tax
collectors that have taxation rights and obligations in accordance with the provisions of
taxation legislation.
3. Body shall be a group of individuals and/or capital that constitutes an integral part,
whether undertaking business or not, covering state limited liability company, limited
partnership, other limited liability company, state-or regional administration-owned
company in any name and form, firm, commercial association, cooperative, pension fund,
alliance, affiliation, foundation, mass organization, socio-political organization or the
like, institution, permanent establishment, and other forms of body
4. Entrepreneur shall be an individual or body in any form that in his/her/its business
activity or job produces goods, imports goods, export goods, does trade, takes advantage
of intangible from outside customs areas, provides services, or benefits from services
from outside customs areas.
5. Taxable Entrepreneur shall be an entrepreneur that delivers taxable goods and/or provide
taxable services subject to taxes pursuant to the Value Added Tax Law of 1984 and its
amendments.
6. Taxpayer Code Number shall be a code number given to a taxpayer as a means in
taxation administration and used as personal identity or identifier of the taxpayer in
exercising his/her taxation rights and obligations.
7. Tax Period shall be a period becoming the basis for taxpayers to count, remit, and report
tax due in a specified period as stipulated in this law.
8. Tax Year shall be a period of 1 (one) calendar year, except if the taxpayer uses a book
year, which is not the same as calendar year.
9. Part of Tax Year shall be a part of the period of 1 (one) tax year.
10. Tax due shall be tax, which must be paid at a certain time, during a tax period, during a
tax year or during a part of tax year pursuant to the tax legislation.
11. Tax Return shall be a statement used by a taxpayer to report his/her tax calculations
and/or payments, tax objects and/or non-tax objects and/or assets and liabilities, pursuant
to the tax legislation.
12. Periodic Tax Return shall be a tax return for a certain tax period.
13. Annual Tax Return shall be a tax return for a certain tax year or a part of tax year.
14. Tax Payment Form shall be an evidence of payment or remittance of tax already realized
by using form or other methods to the state cash through places of payment appointed by
the Minister of Finance.
15. Tax Assessment shall be letter of stipulation, covering Underpaid Tax Assessment,
Additional Underpaid Tax Assessment, Nil Tax Assessment or Overpaid Tax
Assessment.
16. Underpaid Tax Assessment shall be a tax assessment determining the amount of tax
principal, the amount of tax credits, the amount of underpaid tax-principal, the amount of
administrative sanction and the amount of tax yet to be paid.
17. Additional Underpaid Tax Assessment shall be a tax assessment stipulating an addition to
the amount of tax already stipulated.
18. Nil Tax Assessment shall be a tax assessment stipulating that the amount of tax principal
is the same as the amount of tax credit or tax is not payable and tax credit is nothing.
19. Overpaid Tax Assessment shall be a tax assessment stipulating the excess of tax payment
because the amount of tax credit is bigger than tax due or tax not payable.
20. Tax collection form shall be a form used to collect tax and/or administrative sanction in
the form of interest and/or fine
21. Distress Warrant shall be an order issued to pay tax due and the collection costs of tax.
22. Tax Credit for Income Tax shall be tax paid directly by a taxpayer plus the principal tax
due in a tax collection form because Income Tax in the current year is unpaid or
underpaid plus the withheld or collected tax, plus tax on income paid or indebted abroad,
subtracted by the amount of preliminary restitution of overpaid tax, which is deducted
from tax due.
23. Tax Credit for Value Added Tax shall be is Input Tax, which is creditable following
deduction by preliminary restitution of overpaid tax or deduction by tax already
compensated, which is subtracted from tax due.
24. Independent job shall be a job done by an individual who has special expertise as part of
effort to earn income, which is not bound by industrial relation.
25. Audit shall be a series of activities carried out to collect and process data, information
and/or evidence, which is executed objectively and professionally on the basis of an audit
standard to assess a taxpayers compliance with tax obligations and/or to achieve other
goals in the framework of implementing provisions of taxation legislation.
26. Initial Evidence shall be a condition, conduct and/or evidence in the form of information,
writing or material which can provide directive for strong allegation that taxation crime
committed by whoever, which is potential to inflict loss on the state income is underway
or had been underway.
27. Audit of Initial Evidence shall be audit executed to obtain initial evidence related to
allegation that taxation crime had been underway.
28. Tax guarantor shall be an individual or body responsible for paying taxes, including a
proxy exercising the rights and fulfilling the obligations of the taxpayer in accordance
with provisions of taxation legislation.
29. Accounting shall be a process of recording in a regularly way to collect financial data and
information, covering assets, liabilities, capital, income and expenses, as well as
acquisition and delivery prices of goods or services, which is closed by making a
financial statement in the form of balance sheet and profit/loss statement during the tax
year.
30. Examination shall be a series of activities carried out to assess whether or not tax return
and its attachments have been filled, including assessing whether or not writing and
calculation have been done properly.
31. Investigation of criminal offences in the taxation field shall be a series of activities
carried out by an investigator to seek and gather evidence to disclose a criminal offence
in the taxation field as well as to find suspect.
32. Decision on rectification shall be a decision issued to correct miswriting, miscalculation,
and/or mistakes in the application of certain provisions in taxation legislation, which is
found in tax assessment, tax collection form, decision on rectification, decision on
objection, decision on the reduction or abolition of administrative sanction, decision on
the reduction of tax assessment, decision on nullification of tax assessment or decision on
initial restitution of overpaid tax or decision on the granting of interest.
33. Decision on Appeal shall be a decision issued by the Tax Court to appeal filed by a
taxpayer against decision on objection.
34. Decision on objection shall be a decision on objection filed by a taxpayer against tax
assessment or the tax withholding or collection by a third party.
35. Decision on appeal shall be a decision issued by the tax court on appeal against the
decision on objection filed by a taxpayer.
36. Decision on lawsuit shall be a decision issued by the tax court on lawsuit against matters
to which lawsuit can be filed on the basis of provisions of taxation legislation.
37. Decision on Judicial Review shall be a decision issued by the Supreme Court on
application for judicial review filed by a taxpayer or the Director General of Taxation
against decision on appeal or decision on objection issued by the tax court.
38. Decision on Preliminary Restitution of Overpaid Tax shall be decision, which contains
the amount of initial refund on overpaid tax for certain taxpayers.
39. Decision on Granting of Interest Compensation shall be a decision determining the

amount of interest compensation granted to a taxpayer.
40. Date of Sending shall be the date of post stamp on the sending, date of facsimile, or the
date in letter or decision, in the case of the letter or decision being sending directly.
41. Date of Receipt shall be the date of post stamp of the sending, date of facsimile, or the
date in letter or decision, in the case of the letter or decision being sending directly.
2. The provision of Article 2 shall be amended so as to read as follows:
Article 2
(1) Any taxpayer fulfilling subjective and objective requirements in accordance with
provisions of taxation legislation shall register with the office of the Directorate General
of Taxation whose jurisdiction covers the residence or domicile of the taxpayer and
accordingly, he/she is given a taxpayer code number.
(2) Any taxpayer as entrepreneur subject to taxes pursuant to the Value Added Tax Law of
1984 and its amendment shall report his/her business to the office of the Directorate
General of Taxation whose jurisdiction covers the residence or domicile of the
entrepreneur, and the business site for the purpose of validation as a taxable entrepreneur.
(3) The Director General of Taxation may appoint:
a. Place of registration and/or place of reporting businesses other than those stipulated
in paragraph (1) and paragraph (2);
b. Place of registration at the office of the Directorate General of Taxation whose
jurisdiction covers the business site, besides place of registration as referred to in
paragraph (1), for certain individual taxpayers as entrepreneurs.
(4) The Director General of Taxation shall ex officio issue taxpayer code numbers and/or
validated taxable entrepreneurs, if the taxpayers or taxable entrepreneurs fail to fulfill
their obligations as referred to in paragraph (1) and/or paragraph (2).
(4a)Taxation obligations of taxpayer having issued by taxpayer code number and/or validated
as taxable entrepreneurs ex officio as meant in paragraph (4) shall start from the moment
when the taxpayers fulfill the subjective and objective requirements pursuant to the
provisions of taxation legislation in not later than 5 (five) years before the issuance of
taxpayer code number and/or validation as taxable entrepreneurs.
(5) The period of time for registration and reporting as well as procedures for registration and
validation as referred to in paragraph (1), paragraph (2), paragraph (3), and paragraph (4)
including the abolition of taxpayer code number and/or the revocation of the status as
taxable entrepreneurs shall be regulated by or no the basis of a regulation of the Minister
of Finance.
(6) The abolition of taxpayer code number shall be done by the Director General of Taxation
if:
a. Application for abolition of taxpayer code number is submitted by taxpayer and/or

his/her heirs in the case of the taxpayer not longer fulfilling the subjective and/or
objective requirements in accordance with provisions of taxation legislation.
b. Corporate taxpayer is liquidated because of business discontinuation or merger;
c. Permanent-establishment taxpayer discontinues its business activity in Indonesia;
d. The Director General of Taxation deems it necessary to abolish taxpayer code
number of taxpayer no longer fulfilling the subjective and/or objective requirements
in accordance with provisions of taxation legislation.
(7) Following examination, the Director General of Taxation shall make decision on
application for abolition of taxpayer code number in 6 (six) month in case of individual
taxpayer or 12 (twelve) months in the case of corporate taxpayer, as from the date of
receipt of complete application.
(8) The Director General of Taxation ex officio or on the basis of application of taxpayer can
revoke validation of taxable entrepreneur.
(9) The Director General of Taxation, following examination, shall make decision on
application for revocation of validation of taxable entrepreneur in 6 (six) months as from
the date of receipt of complete application.
3. A new article is supplemented between Article 2 and Article 3 to become Article 2A, which
reads as follows:
Article 2A
A tax period equivalent to one calendar month or other period of time regulated by a
regulation of the Minister of Finance shall be 3 (three) calendar months at the maximum.

Article 3
(1) Any taxpayer shall fill a tax return properly, completely and clearly in Indonesia
language by using Latin letters, Arabic numbers, the rupiah currency, and sign and
submit it to the office of the Directorate General of Taxation where the taxpayer is
registered or validated or other places stipulated by the Director General of Taxation.
(1a)The taxpayer already securing a permit from the Minister of Finance to perform
bookkeeping by using foreign language and currency other than the rupiah, shall submit a
tax return in the Indonesian language and permitted currency other than the rupiah with
the implementation here to regulated by or no the basis of regulation of the Minister of
Finance.
(1b)The signing as meant in paragraph (1) can be done in an ordinary was, by stamp signature
or electronic or digital signature, wholly having the same legality, with the technical
procedures regulated by or on the basis of a regulation of the Minister of Finance.
(2) The taxpayer as referred to in paragraph (1) and paragraph (1a) shall pick up directly a
tax return in the place appointed by the Director General of Taxation or by other methods
whose technical procedures are regulated by or on the basis of a regulation of the

Minister of Finance.
(3) The deadline for the submission of tax return shall be:
a. For Periodic tax return, no later than 20 (twenty) days after the end of the tax period;
b. For annual income tax return of individual taxpayer, no later than 3 (three) months
after the end of the tax year;
c. Annual income tax return of corporate taxpayer, no later than 4 (four) months after
the end of the tax year.
(3a)Taxpayers belonging to certain criteria can report several tax periods in one tax return.
(3b)The taxpayers belonging to certain criteria and procedures for reporting as meant in
paragraph (3a) shall be regulated by or on the basis of a regulation of the Minister of
Finance.
(3c)The deadline and procedures for reporting the withholding or collection of tax by
government treasurers and certain bodies shall be regulated by or on the basis of a
regulation of the Minister of Finance.
(4) Taxpayers can extend the period of submission of the annual income tax return as meant
in paragraph (3) to another period of 2 (two) months at the most by notification in writing
or other methods to the Director General of Taxation with the provisions be regulated by
or on the basis of a regulation of the Minister of Finance.
(5) The notification as referred to in paragraph (4) shall be accompanied by a letter of
statement on the provisional calculation of tax due in 1 (one) tax year and tax payment
form as evidence of the settlement of the remainder of tax due, with the provision here to
be regulated by or on the basis of a regulation of the Minister of Finance.
(5a)If a tax return is not submitted in accordance with the deadline as referred to in paragraph
(3) or the extended deadline for the submission of annual tax return as referred to in
paragraph (4), a admonitory shall be issued.
(6) The model and content of tax return as well as information and/or documents, which
must be attached to it shall be regulated by or on the basis of a regulation of the Minister
of Finance
(7) A tax return shall be considered not being submitted if:
a. The tax return is not signed as referred to in paragraph (1);
b. The tax return is not fully accompanied by information and/or documents as referred
to in paragraph (6);
c. The tax return certifying overpayment is submitted after 3 (three) years, following the
expiration of tax period, part of tax period or tax year and taxpayer had been
reminded in writing.
(7a)If the tax return is considered not being submitted as referred to in paragraph (7), the
Director General shall notify it to the taxpayer.
(8) Excepted from the obligation as referred to in paragraph (1) shall be certain income
taxpayers regulated by or on the basis of a regulation of the Minister of Finance.
Article 4
(1) Any taxpayer shall fill and submit a tax return in a correct, complete and clear way and
sign it.
(2) If a taxpayer is a body, a tax return shall be signed by the board of executives or the
board of directors.
(3) If a taxpayer appoints a proxy by special power of attorney to fill and sign tax return, the
special power of attorney shall be attached to the tax return.
(4) The annual income tax return filled by the taxpayer required to perform bookkeeping
shall be accompanied by a financial statement in the form of balance sheet and profit/loss
statement as well as other information needed to calculate the amount of taxable income.
(4a)The financial statement as referred to paragraph (4) shall be finance statement of the
respective taxpayers
(4b)If the financial statement as referred to in paragraph (4a) is audited by public accountant
but not enclosed to tax return, the tax return shall be considered incomplete and unclear
thus the tax return shall be considered being not submitted as referred to in Article 3
paragraph (7) letter b.
(5) Procedures of accepting and processing tax returns shall be regulated by on the basis of a
Article 6
(1) The tax return directly submitted by a taxpayer to the office of the Directorate General of
Taxation shall be given the date of receipt by the official appointed to that effect, while
the annual tax return shall also be given proof of receipt.
(2) A tax return can be sent by mail with evidence of sending of the letter or other ways
regulated by or on basis of a regulation of the Minister of Finance.
(3) The Proof and date of sending the tax return as referred to in paragraph (2), provided that
the tax return is already complete, shall be regarded as proof and date of receipt.
Article 7
(1) If a tax return is not submitted within the period of time as referred to in Article 3
paragraph (3) or prior to the extended deadline for the submission of tax return as
referred to in Article 3 paragraph (4), the taxpayer shall be subject to administrative
sanction in the form of fine as much as Rp500, 000 (five hundred thousand rupiah) in the
case of periodic value-added tax return and Rp100, 000(a hundred thousand rupiah) in the
case of other periodic tax returns and Rp1, 000,000.00 (one million rupiah) in the case of
annual income tax return of corporate taxpayer as well as Rp100,000.00 (one hundred
thousand rupiah) in the case of annual income tax return of individual taxpayer.
(2) The administrative sanction in the form of fine as referred to in paragraph (1) shall not be
imposed on:
a. Individual taxpayers already passing away;
b. Individual taxpayers no longer undertaking independent business activity or job;
c. Individual taxpayers having the status of foreign citizens who have not lived in
Indonesia anymore;
d. Permanent establishment no longer undertaking activity in Indonesia;
e. Corporate taxpayers no longer undertaking business activity but not yet dissolved in
accordance with the provisions in force;
f. Treasurers no longer conducting payment;
g. Taxpayers affected by disaster, with the provisions here to ruled by a regulation of
the Minister of Finance; or
h. Other taxpayers ruled by or on the basis of a regulation of the Minister of Finance.
Article 8
(1) A taxpayer, at his/her own will, can rectify the already-submitted tax return by submitting
a written statement, on condition that the Director General of Taxation has not conducted
an audit.
(1a)If the rectification of the tax return as referred to in paragraph (1) certifies loss or
overpayment, the rectification of tax return shall be submitted in not later 2 (two) years
before the expiration of stipulation.
(2) If the taxpayer himself/herself rectifies tax return causing the amount of tax debt to
become larger, he/she shall be subject to administrative sanction in the form of interest as
much as 2 % (two percent) of the underpaid tax per month, starting from the expiration of
the deadline for the submission of tax return to the date of payment and part of month
shall be rounded up to one month.
(2a)If the taxpayer himself/herself rectifies tax return causing the amount of tax debt to
become larger, he/she shall be subject to administrative sanction in the form of interest as
much as 2 % (two percent) of the underpaid tax per month, starting from the maturity of
payment to the date of payment and part of month shall be rounded up to one month.
(3) Even though audit has been conducted, so long as investigation into irregularities made
by the taxpayer as referred to in Article 38 has not been conducted, the irregularities shall
not be subject to investigation, if the taxpayer, at his/her own will, discloses the
irregularities by accompanying evidence of the settlement of the remainder of the tax due
and paying administrative sanction in the form of fine as much as 150% (one hundred
and fifty percent) of the amount of underpaid tax.
(4) Even if the Director General of Taxation conducted audit, on condition that the Director
General of Taxation has not issued tax assessment, the taxpayer, at his/her own
awareness, can disclose in a separate report that the submitted tax return is not filled in
accordance with the actual condition thus being potential to use:
a. The amount of taxes yet to be paid to become larger or smaller; or
b. The amount of losses based on the tax provisions to become larger or smaller; or
c. The value of assets to become larger or smaller; or
d. The value of capital to become larger or smaller and audit still continues.
(5) The underpaid tax resulting from the disclosure of irregularities in filling the tax return as
referred to in paragraph (4) as well as the administrative sanction in the form of fine as
much as 50% (fifty percent) of the underpaid tax, shall be settled by the taxpayer
himself/herself prior to the submission of the separate report.
(6) A taxpayer can correct annual tax return already submitted in the event that the taxpayer
receives tax assessment, decision on objection, decision on rectification, decision on
appeal or decision of judicial review of the previous tax year or previous tax years, which
certifies that the fiscal loss is different from the fiscal loss already compensated in the
would-be corrected annual tax return, in a period of 3 (three) months after receiving the
tax assessment, decision on objection, decision on rectification, decision on appeal or
decision of judicial review on condition that the Director General of Taxation has not
conducted audit.
Article 9
(1) The Minister of Finance shall set the maturity date of the payment and remittance of tax
due in a certain time or tax period for each type of tax, no later than 15 (fifteen) days after
the time when the tax becomes due or the tax period has expired.
(2) The remainder of tax due based on the annual income tax return shall be settled, prior to
the submission of the annual income tax return.
(2a)If the payment or remittance of tax as referred to in paragraph (1) is made after the
maturity date of the payment or remittance of tax, the taxpayer shall be subject to
administrative sanction in the form of interest as much as 2 % (two percent) per month,
calculated as from the maturity date of payment to the date of payment and part of the
month is rounded up to 1 (one) month.
(2b)The payment or remittance of tax as referred to in paragraph (2), which is realized after
the deadline for the submission of annual tax return shall be subject to administrative
sanction in the form of interest as much as 2% (two percent) per month, calculated as
from the expiration of the deadline for the submission of annual tax return to the date of
payment and part of the month is rounded up to 1 (one) month.
(3) If the amount of tax still has to be paid becomes larger in tax collection form, underpaid
tax assessment, additional underpaid tax assessment, decision on rectification, decision
objection, and decision on appeal, it shall be settled within a period of 1 (one) month after
the date of issuance.
(3a)In the case of taxpayers being categorized as small-scale businesses and taxpayers living
in certain regions, the settlement period as referred to in paragraph (3) can be extended to
another term of 2 (two) months at the most with the provisions hereto is to be regulated
by or on the basis of a regulation of the Minister of Finance.
(4) The Director General of Taxation, at the request of a taxpayer, can give approval to pay
by installments on or postpone the payment of tax including the remainder of tax due as
referred to in paragraph (2) no later than 12 (twelve) months, the procedure hereof is to
Article 10
(1) Any taxpayer shall pay or remit tax due by using tax payment form to the state cash
through places of payment ruled by or on the basis of a regulation of the Minister of
Finance.
(1a)The tax payment form as referred to in paragraph (1) shall function as a proof of tax
payment if it has been legalized by authorized official of payment receiving office or has
been validated, with the provision hereof regulated by or on the basis of a regulation of
the Minister of Finance.
(2) Procedures for paying, remitting and reporting taxes, as well as procedures for paying by
installments on or postponing the payment of taxes shall be ruled by or on the basis of a
Article 11
(1) At the request of a taxpayer, the excess of tax payments as referred to in Article 17,
Article 17B, or Article 17C shall be returned, but it shall first be deducted from the tax
debt if the taxpayer still has tax debt.
(1a)The excess of tax payments attributable to the issuance of decision on objection, decision
on rectification, decision on reduction of administrative sanction, decision on abolition of
administrative sanction, decision on reduction of tax assessment, decision of nullification
of tax assessment and decision on appeal or decision on review as well as decision on the
granting of interest compensation shall be returned to the taxpayer but it shall be included
directly first to settle tax due if the taxpayer still has tax due.
(2) The excess of tax payments as referred to in paragraph (1) and paragraph (1a) shall be
refunded no later than one month after the request for restitution of the excess of tax
payments has been received in connection with the issuance of the overpaid tax
assessment as referred to in Article 17 paragraph (1), or as from the date of issuance of

the decision on preliminary restitution of overpaid tax as referred to in Article 17
paragraph (2) and Article 17B or the decision on preliminary restitution of overpaid tax
as referred to in Article 17C or Article 17D or the date of issuance of decision on
objection, decision on rectification, decision on reduction of administrative sanction,
decision on abolition of administrative sanction, decision on reduction of nullification of
tax assessment or decision on the granting of interest compensation or as from the date of
receipt of decision on appeal or decision on review, which causes overpaid tax.
(3) If the excess of tax payment is refunded after a period of one month, the government
shall give an interest compensation as much as 2% (two percent) per month due to
lateness in the restitution of overpaid tax, calculated as from the deadline as referred to in
paragraph (2) to the date when the excess of tax payments is paid.
(4) Procedures for calculating and restituting the excess of tax payments shall be ruled by or
on the basis of regulation of the Minister of Finance.
Article 12
(1) Any taxpayer shall pay tax due in accordance with taxation legislation, without relying on
the existence of tax assessment form.
(2) The amount of the tax due based on the tax return submitted by the taxpayer shall be the
amount of tax due according to taxation legislation.
(3) If the Direction General of Taxation has evidence that the amount of tax due based on the
tax return as referred to in paragraph (2) is untrue, the Director General of Taxation shall
stipulate the amount of tax due.
13. The provision of Article 13 shall be amended by supplementing one paragraph to become
paragraph (6) so that the article entirely reads as follows:
Article 13
(1) In five years after the moment when the tax becomes due or Tax Period, Part of Tax Year
or Tax Year ends, the Director General of Taxation can issue Underpaid Tax Assessment
in the following cases:
a. Based on result of audit or other information, the amount of tax due is unpaid or
underpaid;
b. The tax Return is not conveyed in the period as referred to in Article 3 paragraph (3)
and, following the issuance of reminder in writing, is not conveyed in the period as
stipulated in the letter of reminder;
c. Based on results of audit, Value Added Tax on Goods and Services and Sales Tax on
Luxury Goods should not be compensated for the positive difference of tax, should
not be subjected to a tariff of 0% (nil percent);
d. The obligation as referred to in Article 28 and Article 29 is not fulfilled thus the
amount of tax due cannot be ascertained.
e. Taxpayer is provided ex-officio with taxpayer code number and/or validated as

taxable entrepreneur as referred to in Article 2 paragraph (4a).
(2) The amount of underpaid tax in the Tax Assessment as referred to in paragraph (1) letter
a and letter e shall be supplemented by administrative sanction in the form of interest
compensation as high as 2% (two percent) per month for 24 (twenty four) months at the
maximum, starting from the moment when the tax becomes due or Tax Period, Part of
Tax Year or Tax Year ends to the date of issuance of the Underpaid Tax Assessment.
(3) The amount of tax in the Tax Assessment as referred to in paragraph (1) letter b, letter c,
and letter d shall be supplemented by administrative sanction in the form of an increase
as high as:
a. 50% (fifty percent) of the underpaid or unpaid Income Tax in one tax year;
b. 100% (one hundred percent) of the unwithheld or under withheld, uncollected or
under collected, unremitted or under remitted and withheld or collected but
unremitted or under remitted Income Tax;
c. 100% (one hundred percent) of the unpaid or underpaid Value Added Tax on Goods
and Services and Sales Tax on Luxury Goods.
(4) The amount of Income Tax notified by taxpayer in a tax return shall be fixed in
accordance with the provisions of taxation legislation if tax assessment is not issued in
the five-year period as referred to in paragraph (1), after the moment when the tax
becomes due or tax period, part of tax period or tax year ends.
(5) Even though the five-year period as referred to in paragraph (1) elapsed, underpaid tax
assessment still can be issued plus administrative sanction in the form of interest as high
as 48% (forty eight percent) of the amount of the unpaid or underpaid tax if the taxpayer,
after the period, is sentenced for committing criminal offence in the taxation sector or
other criminal offences potential to inflict loss on the state income on the basis of a
legally fixed court decision.
(6) Procedures for issuing the underpaid tax assessment as referred to in paragraph (5) shall
14. A new article shall be supplemented between Article 13 and Article 14 to become Article
13A, which reads as follows:
Article 13A
A taxpayer, due to his/her negligence, not conveying tax return or conveying tax return but
the content is untrue or incomplete or enclosing information with untrue content thus being
potential to inflict loss on the state income shall not be subject to penalty if the taxpayer
committed the negligence for the first time and the taxpayer shall settle the remainder of tax
due and administrative sanction in the form of an increase as high as 200% (two hundred
percent) of the amount of underpaid tax stipulated through the issuance of underpaid tax
assessment.
Article 14
(1) The Director General of Taxation can issue a tax collection form if:
a. Income tax in the current year is not paid or is underpaid;
b. Based on the result of the verification of tax return there is a shortage of tax payment
as a result of miswriting and/or miscalculation;
c. The taxpayer is subject to administrative sanction in the form of fine and/or interest;
d. The entrepreneur has been validated as taxable entrepreneur but does not make tax
invoice or makes tax invoice not punctually;
e. The entrepreneur has been validated as taxable entrepreneur not filling tax invoice
completely as referred to in Article 13 paragraph (5) of the Value Added Tax Law of
1984 and its amendment, other than:
1. The identity of buyer as referred to in Article 13 paragraph (5) letter b of the
Value Added Tax Law of 1984 and its amendments;
2. The identity of buyer as well as name and signature as referred to in Article 13
paragraph (5) letter b and letter g of the Value Added Tax law of 1984 and its
amendments, in the case of the delivery being realized by taxable entrepreneur
categorized as retailer;
f. The entrepreneur reports tax invoice not suitable to the period of issuance of tax
invoice; or
g. The taxable entrepreneur failed to produce and has been given restitution of input tax
as meant in Article 9 paragraph (6a) of the Value Added Tax Law of 1984 and its
amendments.
(2) The tax collection form as referred to in paragraph (1) shall have the same legal force as
tax assessment.
(3) The remainder of tax due in the tax collection form as referred to in paragraph (1) letter a
and letter b, plus administrative sanction in the form of interest as much as 2% (two
percent) per month for 24 (twenty-four) months at the most, shall be calculated as from
the date when the tax becomes due or the expiration of tax period, part of tax year or tax
year to the issuance of tax collection form.
(4) The entrepreneur or the taxable entrepreneurs as referred to in paragraph (1) letter d,
letter e and letter f shall respectively be subject to administrative sanction in the form of
fine as much as 2% (two percent) of tax base.
(5) The taxable entrepreneur as referred to in paragraph (1) letter g shall be subject to
administrative sanction in the form of fine as much as 2% (two percent) of the amount of
re-collected tax, which is counted as from the date of issuance of decision on restitution
of overpaid tax to the date of issuance of tax collection form and part of the month is
rounded up to one month.
(6) Procedures for issuing the tax collection form shall be ruled by or on the basis of a
Article 15
(1) The Director General of Taxation can issue additional underpaid tax assessment within a
period of 10 (ten) years after the time when tax has become due, the tax period, part of
tax year or tax year has terminated if the finding of new data add the amount of tax due
after audit is executed in the framework of issuing the additional underpaid tax
assessment.
(2) The remainder of tax due in the additional underpaid tax assessment shall be added by
administrative sanction in the form of a 100% (a hundred percent) increase from the
remainder of tax due.
(3) The increase as referred to in paragraph (2) shall not be applied if the additional
underpaid tax assessment is issued on the basis of written information from the taxpayer
on his/her own will, on condition that the Director General of Taxation has not started
conducting audit in the framework of issuing the additional underpaid tax assessment.
(4) If after the period of 5 (five) years as referred to in paragraph (1) has elapsed, the
additional underpaid tax assessment can constantly be issued by imposing administrative
sanction in the form of interest as much as 48% (forty-eight percent) of the amount of
unpaid or underpaid tax, in case the taxpayer after the period of 5 (five) years has been
sentenced for committing a criminal offence in the taxation field or other criminal
offence potential to inflict loss on the state income on the basis of a legally fixed court
decision.
(5) Procedures for issuing the additional underpaid tax assessment as meant in paragraph (4)
shall be regulated by or on the basis of a regulation of the Minister of Finance.
Article 16
(1) The Director General of Taxation shall ex office or at the request of a taxpayer can rectify
tax assessment, tax collection form, decision on objection, decision on the reduction of
administrative sanction, decision on abolition of administrative sanction, decision on the
reduction of tax assessment, decision on the nullification of tax assessment, decision on
the preliminary restitution of overpaid tax or decision on the granting of interest
compensation, which, in the issuance, contains miswriting, miscalculation and/or
mistakes in the application of certain provisions in taxation legislation.
(2) The Director General of Taxation shall, within a period of 6 (six) months after the request
has been received, issue a decision with regard to the application for restitution submitted
the taxpayer as referred to in paragraph (1).
(3) If after the period as referred to in paragraph (2) elapsed but the Director General of
Taxation does not issue any decision, the application for restitution shall be considered
approved.
(4) If a taxpayer request, the Director General of Taxation shall provide information in
writing about matters becoming the basis for rejection of approval of part of the
application of taxpayer as referred to in paragraph (1).

Article 17
(1) After auditing, the Director General of Taxation shall issue overpaid tax assessment if the
amount of tax credit or the paid tax is bigger than the amount of tax due.
(2) Based on application f taxpayer, the Director General of Taxation, after examining the
truth of tax payments, shall issue overpaid tax assessment taxes should not become due,
with the provision hereof ruled by or on the basis of a regulation of the Minister of
Finance.
(3) Overpaid tax assessment shall remain possible to issue if the overpaid taxes, based on
results of audit and/or new data, is bigger than the excess for tax payments already
stipulated.
19. The provision of Article 17A shall be amended so as to read as follows:
Article 17A
(1) The Director General of Taxation, after auditing, shall issue nil tax assessment if
the amount of tax credits or paid taxes is the same as the amount of tax due or tax
does not become due or there is no tax credit or tax payment.
(2) Procedures for issuing nil tax assessment shall be ruled by or on the basis of a
regulation of the Minister of Finance

20. The provision of Article 17B shall be amended so as to read as follows:
Article 17B
(1) The Director General of Taxation, after auditing the application for restitution of
overpaid tax other than the application for restitution of overpaid tax from taxpayer with
certain criteria as referred to in Article 17C and taxpayers as referred to in Article 17D
shall issue tax assessment no later than 12 (twelve) months after the date of receipt of
complete application.
(1a) The provision as referred to in paragraph (1) shall not apply to taxpayers in the
course of audit of initial evidence of criminal offence in the taxation field, with
the provisions hereof ruled by or on the basis of a regulation of the Minister of
Finance.
(2) If after the period of time as referred to in paragraph (1) has passed but the Director
General of Taxation does not issue any decision, the application for restitution of
overpaid tax shall be considered approved and accordingly, overpaid tax assessment shall
be issued no later than one month after the period of time has passed.
(3) If the overpaid tax assessment is issued behind the period of time as referred to in
paragraph (2), the taxpayer shall deserve to interest as much as 2% (two percent) per
month, calculated as from the date when the period of time as referred to in paragraph (2)
has expired to the time when the overpaid tax assessment is issued.
(4) If the audit of initial evidence of criminal offence in the taxation field as referred to in
paragraph (1a) is not continued by investigation; is continued by investigation but not
continued by prosecution against criminal offence in the taxation field; or continued by
investigation and prosecution against criminal offence in the taxation field but ruled not
guilty or free from all legal charges on the basis of a legally fixed court verdict and
overpaid tax assessment is issued to taxpayer, the taxpayer shall be given interest
compensation as much as 2% (two percent) per month for a period of 24 (twenty four)
months at the maximum, starting from the date of expiration of the 12 (twelve) month
period as referred to in paragraph (1) to the moment when the overpaid tax assessment is
issued and part of month is rounded up to one month.
21. The provision of Article 17C shall be amended so as to read as follows:
Article 17C
(1) The Director General of taxation, after examining the application for restitution of
overpaid tax from the taxpayer under certain criteria, shall issue a decision on the initial
restitution of overpaid tax no later than 3 (three) months after the application has been
received in the case of income tax and no later than 1 (one) month after the request has
been received in the case of value added tax.
(2) The certain criteria as referred to in paragraph (1) shall include:
a. Conveying tax return on time;
b. Not having tax arrear of all types of taxes, except tax arrears already securing license
to pay by installments or postpone the payment of taxes;
c. Financial statement audited by public accountant or the government financial
supervisory institution with unqualified for 3 (three) years consecutively;
d. Having never sentenced for committing criminal offence in the taxation field on the
basis of a legally fixed court verdict in the last 5 (five) years.
(3) The taxpayer under the certain criteria as referred to in paragraph (2) shall be stipulated
by a decision of the Director General of Taxation.
(4) The Director General of Taxation can audit the taxpayer as referred to in paragraph (1),
and issue a tax assessment after realizing initial restitution of overpaid tax.
(5) If based on the result of the audit as referred to in paragraph (4), the Director General of
Taxation issues underpaid tax assessment, the amount of underpaid tax shall be added by
administrative sanction in the form of a 100% (a hundred percent) increase of the amount
of underpaid tax.
(6) The taxpayer as referred to in paragraph (1) shall not be entitled to initial restitution of
overpaid tax if:
a. The taxpayer is subject to investigation into criminal offence in the taxation field;
b. The taxpayer is late in conveying periodic tax return of certain type of tax for 2 (two)
tax periods consecutively;
c. The taxpayer is late in conveying periodic tax return of a certain type of tax for 3
(three) tax periods in one calendar year; or
d. The taxpayer is late in conveying annual tax return.
(7) Procedures for stipulating taxpayer under certain criteria shall be regulated by or on the
basis of a regulation of the Minister of Finance.
22. Two articles shall be supplemented between Article 17C and Article 18 to become Article
17D and Article 17E, which read as follows:
Article 17D
(1) The Director General of Taxation after examining the application for restitution of
overpaid tax from taxpayer fulfilling certain criteria shall issue decision on the
preliminary restitution of overpaid tax in not later than 3 (three) months as from the date
of receipt of complete application in the case of income tax and not later than one month
as from the date of receipt of complete application in the case of value added tax.
(2) The taxpayer as referred to in paragraph (1) entitled to the preliminary restitution of
overpaid tax shall be:
a. Individual taxpayer not undertaking independent business or job;
b. Individual taxpayer undertaking independent business or job with the amount of
turnover or overpayment up to certain amount;
c. Corporate taxpayer with the amount of turnover or overpayment up to certain
amount;
d. Taxable entrepreneur conveying periodic value added tax return with the amount of
delivery and overpayment up to certain amount.
(3) The limit of the amount of turnover, delivery and overpayment as referred to in paragraph
(2) shall be regulated by or on the basis of a regulation of the Minister of Finance.
(4) The Director General of Taxation can audit the taxpayer as referred to in paragraph (1)
and issue tax assessment after realizing preliminary restitution of overpaid tax.
(5) If based on result of the audit as referred to in paragraph (4), the Director General of
Taxation shall issue underpaid tax assessment, the amount of the underpaid tax shall be
supplemented by administrative sanction in the form of an increase of 100% (one
hundred percent).
Article 18
(1) Tax collection form, underpaid tax assessment, additional underpaid tax assessment and
decision on rectification, decision on objection, decision on appeal as well as decision on
judicial review, which cause the amount of tax yet to be paid to increase, shall serve as
the basis for the collection of taxes.
(2) Abolished.
Article 19
(1) If the underpaid tax assessment or additional underpaid tax assessment as well as
decision on rectification, decision on objection, decision on appeal or decision on judicial
review causes the amount of tax yet to be paid to increase, at the time of maturity, not
paid or underpaid, the amount of tax, which is not paid or is underpaid shall be subject to
administrative sanction in the form of interest as much as 2% (two percent) per month for
all periods, calculated as from the date of maturity to the date of payment or the date of
issuance of the tax collection form and part of the month is rounded up to one full month.
(2) The taxpayer allowed to pay tax by installments or defer tax payments shall also be
subject to interest as much as 2% (two percent) per month of the amount of taxes yet to
be paid and part of the month is rounded up to one full month.
(3) If the taxpayer is allowed to postpone the submission of tax return and based on the
provisional calculation, the tax due as referred to in Article 3 paragraph (5) is lower than
the actual amount of tax due, the remainder of tax due shall be subject to interest as much
as 2% (two percent) per month, calculated as from the expiry date of the deadline for the
submission of the tax return as referred to in Article 3 paragraph (3) letter b or letter c to
the date when the remainder of tax due is paid and part of the month is rounded up to one
full month.
Article 20
(1) If the amount of tax due based on the tax collection, underpaid tax assessment, additional
underpaid tax assessment and decision on rectification, decision on objection, decision on
appeal as well as decision judicial review that increases the amount of taxes yet to be paid
by the tax guarantor in accordance with the period of time as referred to in Article 9
paragraph (3) or paragraph (3a), the tax due shall be collected by distress warrant in
accordance with the provisions of taxation legislation.
(2) Excepted from the provisions in paragraph (1), the instant and lump sum collection shall
be done in case:
a. The tax guarantor will leave Indonesia forever or intends to do so;
b. The tax guarantor transfers the goods he/she possesses or controls to somebody else
in an attempt to stop or scale down the companys activities, or the job he/she does in
Indonesia;
c. There are signs that the tax guarantor will dissolve his/her corporate body, or merge
his/her businesses, or expand his/her businesses, or transfer the company he/she
possesses or controls to somebody else, or change the company into other form;
d. The state will dissolve the corporate body; or
e. The confiscation of the tax guarantors possessions by a third party or there are signs
of bankruptcy
(3) The collection of tax by distress warrant shall be done pursuant to the provisions of
26. The provision of Article 21 shall be amended so that it entirely reads as follows:
Article 21
(1) The state shall have preemptive rights to tax claims over goods belonging to a tax
guarantor.
(2) Provisions on the preemptive rights as referred to in paragraph (1) shall cover tax
principal, administrative sanction in the form of interest, fine, increase and tax collection
expenses.
(3) The Preemptive rights to tax claims shall be above all other preemptive rights, except for:
- Court fees merely as a result of punishment to auction movables and/or immovables;
- Expenses spent on rescuing the goods in rescuing the goods in question;
- Court fees merely as a result of auction and settlement of heritage.
(3a)In the case of the taxpayer being declared bankrupt or liquidated, curator, liquidator or
person or body assigned to settle the case shall be prohibited from sharing assets of the
taxpayer in bankruptcy, dissolution or liquidation to other shareholders or creditors
before using the assets for paying tax due of the taxpayer.
(4) The preemptive rights shall disappear after it has passed a period of 2 (two) years since
the issuance date of tax collection form, underpaid tax assessment, additional underpaid
tax assessment, decision on rectification, decision on objection, decision on appeal or
decision on judicial review that increases the amount of taxes yet to be paid.
(5) The calculation of the period of preemptive rights shall be stipulated as follows:
a. If the warrant to pay is officially announced, the period of 5 (five) years as referred to
in paragraph (4) is calculated as from the notification date of the warrant; or
b. In the case of deferral of payment or approval of payments by installments being
given, the period of 5 (five) years is counted as from the expiration of the deferral
period.
Article 22
(1) The right to collect tax, including interest, fine. Increase and tax collection expenses shall
expire after it has passed a period of 5 (five) years, starting from the date of issuance of
tax collection form, underpaid tax assessment, as well as additional underpaid tax
assessment and decision on rectification, decision on objection, decision on appeal as
well as decision on judicial review.
(2) The expiry date of tax collection as referred to in paragraph (1) shall be deferred if:
a. Warrant is issued;
b. There is acknowledgment of tax debt by the taxpayer, either directly or indirectly;
c. The underpaid tax assessment as referred to in Article 13 paragraph (5) or additional
underpaid tax assessment form as referred to in Article 15 paragraph (4) is issued;
d. Inventigation into criminal offence in the taxation field is executed.
28. The provision of Article 23 shall be amended so that the article reads as follows:
Article 23
(1) Abolished
(2) Lawsuit by a taxpayer or a tax guarantor against:
a. The execution of warrant, order for confiscation, or auction notification;
b. The decision on prevention in the framework of tax collection;
c. The decision related to the execution of tax decision, other than those provided for in
Article 25 paragraph (1) and Article 26;
d. The issuance of tax assessment or decision on objection not suitable to procedures
and mechanisms already ruled in the provisions of taxation legislation;
can only be filed to the tax court.
(3) Abolished.
Article 24
Procedures for writing off tax claims and stipulating the amount of tax claims to be written
off shall be ruled by or on the basis of a regulation of the Minister of Finance.
Article 25
(1) Any taxpayer can file objections only with the Director General of Taxation to:
a. Underpaid tax assessment;
b. Additional underpaid tax assessment;
c. Overpaid tax assessment;
d. Nil tax assessment;
e. The withholding or collection of tax by a third party pursuant to the provisions of
(2) The objections shall be filed in writing in the Indonesian language by mentioning the
amount of tax due or the amount of taxes already withheld or collected or the amount of
losses according to the calculation by the taxpayer by providing reasons becoming the
basis for the calculation.
(3) The objections shall be filed within a period of 3 (three) months as from the date of
sending of tax assessment or as from the date of tax withholding or collection as referred
to in paragraph (1), except if the taxpayer can prove that the period of time cannot be
fulfilled because of force majeure.
(3a)In the case of a taxpayer raising objection to tax assessment, the taxpayer shall settle
taxes be paid minimally as much as the amount already approved by the taxpayer in
closing conference of audit result, before the letter of objection is submitted.
(4) The objections not complying with the conditions as referred to in paragraph (1),
paragraph (2), paragraph (3) or paragraph (3a) shall not be regarded as objections so that
they will not be taken into consideration.
(5) Evidence of the receipt of objection given by the official of the Directorate General of
Taxation assigned to that effect or evidence of the sending of objection by recorded mail
or other methods ruled by or on the basis of a regulation of the Minister of Finance shall
serve as evidence of the receipt of objection.
(6) If requested by the taxpayer for the purpose of filing an objection, the Director General of
Taxation shall give information in writing about matters serving as the basis for the
imposition of tax, the calculation of losses, the withholding or collection of taxes.
(7) If a taxpayer files objection, the period of settlement of taxes as referred to in Article 9
paragraph (3) or paragraph (3a) for the taxes not yet paid upon the submission of the
objection shall be deferred up to one month as from the date of issuance of tax
assessment.
(8) The amount of taxes not yet paid upon the submission of the objection as referred to in
paragraph (7) shall exclude the tax due as referred to in Article 11 paragraph (1) and
paragraph (1a).
(9) If the objection of taxpayer is rejected or approved partly, the taxpayer shall be subject to
administrative sanction in the form of a fine as much as 50% (fifty percent) of the amount
of taxes based on the decision on objection, subtracted by the amount of taxes already
paid before filling the objection.
(10)If the taxpayer files application for appeal, the administrative sanction in the form of a
fine as much as 50% (fifty percent) as referred to in paragraph (9) shall not be imposed.
Article 26
(1) In not later than twelve months as from the date of receipt of the objection, the Director
General of Taxation shall make decision on the submitted objection.
(2) Before the decision is issued, taxpayers can convey additional reasons or written
explanation.
(3) Decision of the Director General of Taxation on the objection can be accepting wholly or
partly, denying or supplementing the amount of tax due.
(4) In the case of taxpayers submitting objection to the tax assessment stipulated in Article
13 paragraph (1) letter b and letter d, the taxpayers shall be able to prove the untruth of
the tax assessment.
(5) In the case of the period as meant in paragraph (1) elapsing and the Director General of
Taxation not making a decision, the submitted objection shall be deemed acceptable.
32. A new article shall be supplemented between Article 26 and Article 27 to become
Article 26A, which reads as follows:
Article 26A
(1) Procedures for submitting and settling the objection shall be regulated by or on
the basis of a regulation of the Minister of finance.
(2) The procedures for submitting and settling the objection as referred to in
paragraph (1) shall rule, among others, the granting of right to taxpayers to appear
for testifying or obtaining explanation about their objection.
(3) In the case of the taxpayers not exercising the tight as referred to in paragraph (2),
the settlement of the objection shall continue.
(4) In the event that taxpayers disclose bookkeeping, records, data, information or
other remarks in the settlement of the objection, which not been obtained by the
taxpayers from the third party upon the audit, the bookkeeping, records, data,
information or other remarks shall not be considered in the settlement of
objection.
33. The provision of article 27 shall be amended so that the article entirely reads as
follows:
Article 27
(1) Any taxpayer can file an application for appeal only with the tax court against the
decision on objection as referred to in article 26 paragraph (1).
(2) The decision of the tax court shall be a decision of special court within the state
administration court
(3) The application as referred to in paragraph (1) shall be filed in writing in the
Indonesia language by mentioning clear reasons in not later than 3 (three) month
as from the date of receipt of decision on objection and enclosed by copy of the
decision on objection.
(4) Abolished.
(4a) If requested by taxpayer of the purpose of submission of application for appeal,
the Director General of Taxation shall give information in writing about the
matters becoming the basis for the issued decision on objection.
(5) Abolished
(5a) If a taxpayer files appeal, the period of settlement of the taxes as referred to in
Article 9 paragraph (3), paragraph (3a) or Article 25 paragraph submitting
objection, shall be deferred up to one month as from the date of issuance of
decision on appeal.
(5b) The amount of taxes not yet paid upon submitting application for appeal as
referred to in paragraph (5a) shall exclude the tax due as referred to in Article 11
paragraph (1) and paragraph (1a).
(5c) The amount of taxes not yet pad upon submitting the application for appeal shall
not become tax due until decision on appeal is issued.
(5d) In the case of application for appeal being rejected or approved partly, the
taxpayer shall be subject to administrative sanction in the form of a fine as much
as 100% (one hundred percent) of the amount of taxes based the decision on
appeal, subtracted by amount of taxes already paid before submitting the
objection.
(6) The tax court as referred to in paragraph (1) and Article 23 paragraph (2) shall be
regulated by a law.
34. The provision of article 27A shall be amended so as to read as follows:
Article 27A
(1) If the objection or application for appeal is accepted partially or wholly, provided
that the tax debt as referred to in the underpaid tax assessment, additional
underpaid tax assessment, nil tax assessment and overpaid tax assessment already
paid has already been paid and resulted in overpaid tax, the access of tax
payments shall be refunded, plus interest compensation as much as 2% (two
percent) per month for a maximum of 24 (twenty-four) month with the provision
as follows:
a. in the case underpaid tax assessment and additional underpaid tax assessment,
starting, from the date of payment causing the over payment to the date of
issuance of decision on objection, decision on appeal or decision on judicial
review;
b. In the case of nil tax assessment and overpaid tax assessment, starting from
the date of issuance of decision of the tax assessment to the date of issuance of
decision on objection, decision on appeal or decision on judicial review.
(1a) The interest compensation as meant in paragraph (1) also shall be granted due to
decision on rectification, decision on reduction of tax assessment, which is
approved partly or wholly and results in overpayments with the provision as
follows:
a. in the case of underpaid tax assessment and additional underpaid tax

assessment, starting from the date of payment causing the access of tax
payment to the date of decision on rectification, decision on reduction of tax
assessment or decision on nullification of tax assessment.
b. in the case of nil tax assessment and overpaid tax assessment, starting from
the date of issuance of tax assessment to the date of issuance of decision on
rectification, decision on reduction of tax assessment or decision on
nullification of tax assessment;
c. in the case of tax collection form, starting from the date payment causing the
access of tax payment to the date of issuance of decision on rectification,
decision on reduction of tax assessment or decision on nullification of tax
assessment.
(2) the interest compensation as referred to in paragraph (1) shall also apply to the
overpayment of administrative sanction in the form of fine as referred to in
Article 14 paragraph (4) and/or interest as referred to in Article 19 paragraph (1)
based on the decision on reduction or abolition of administrative sanction, as a
result of the issuance of the decision on objection, decision on appeal or decision
on judicial review approving the application from the tax payer partially or
wholly.
(3) Procedures for calculating the restitution of overpaid taxes and providing interest
compensation shall be ruled by or on the basis of a regulation of the Minister of
Finance.
Article 28
(1) Any individual tax payer who carries out independent business activity or job and
any corporate taxpayer in Indonesia shall perform bookkeeping.
(2) Excepted from the obligation to perform bookkeeping as referred to in paragraph
(1) but still required to make records shall be an individual taxpayer carrying out
independent business activity job, who is under taxation legislation permitted to
calculate net income by using net income calculation norms and an individual
taxpayer, who does not carry out independent business activity or job.
(3) The bookkeeping or recording shall be conducted by paying attention to goodwill
and reflection the actual conditions or business activities.
(4) The bookkeeping or recording shall be conducted in Indonesia by using Latin
characters, Arabic number, rupiah currency and the Indonesian language or
foreign language permitted by the Minister of Finance.
(5) The bookkeeping shall be conducted under the principles of consistency and
accrual or cash system.
(6) Any change the bookkeeping method and/or accounting year shall secure
approval from the Director General of Taxation.
(7) The bookkeeping shall at least consist of records on assets, liabilities, capital,
income and cost, as well as sales and purchase, so that the amount of tax due can
be calculated.
(8) The bookkeeping using foreign language and currency other than the rupiah can
be conducted by a taxpayer after securing a permit from the Minister of Finance.
(9) The recording as referred to in paragraph (2) shall consist of data gathered in a
regularly way on the gross turnover or revenue and/or gross income as the basis
for the calculation of tax due, including non-tax object income and/or income
subject to final tax.
(10) Abolish.
(11) Books, records, and document serving as the basis for bookkeeping or recording
as well as other document shall be kept for 10 (ten) years in Indonesia, namely in
business site or residence of the individual taxpayer or in the domicile of the
corporate taxpayer.
(12) Model and procedures for recording as referred to in paragraph (2) shall be
regulated by or on the basis of a regulation of the Minister of Finance.
Article 29
(1) The Director General of Taxation shall be authorized to conduct audit to assess
compliance with tax obligations of taxpayers and to achieve other goals in the
framework of implementing the provision of taxation legislation.
(2) For the purpose of audit, auditors shall possess auditors identify cards and audit
orders and show them to the taxpayer to be audited.
(3) The audited taxpayer shall :
a. show and/or lend books or records, documents serving as the basis for the
audit and other documents related to the earned income business activities,
independent job of the taxpayer, or object subject to tax;
b. give a change to enter places or rooms considered necessary and give
assistance to ensure that the audit can be conducted smoothly; and/or
c. provide other necessary information.

(3a) The books, records and document as well as data and other information as
referred in paragraph (3) shall be provided by taxpayer in not later that one month
as from the date of submission of the request.
(3b) If an individual taxpayer conducting independent business activity or job does not
fulfill the provision as referred to in paragraph (3) thus the amount of taxable
income cannot be counted, the taxable income can be counted ex-officio in
accordance with the provision of taxation legislation.
(3)
If in disclosing bookkeeping, record or documents and information request, the

taxpayer is bound to the obligation to keep them in secrecy, the obligation shall be
abolished by the request for the purpose of the audit as referred to in paragraph
(1).
Article 29A
Corporate taxpayers having their share-listing statements already declared effective
by the capital market supervisory board and conveying tax returns accompanied by
public accountants with unqualified opinion, of which:
annual tax returns certify the overpayment as referred to in article 17b; or is selected
for auditing on the basis of risk analysis
can be audited through office audit.
38. The provision of article 30 shall be amended so as to read as follows:
Article 30
The director General shall be authorized to seal certain places or rooms as well as
movable and/or immovable goods in the case of taxpayers failing to fulfill the
obligation as referred to in article 29 paragraph (3) letter b.
Procedures for the sealing as referred to in paragraph (1) shall be ruled by or on the
basis of a regulation of the minister of finance.
39. The provision of article 31 shall be amended so that it entirely reads as follows:
Article 31
(1) Procedures for auditing shall be ruled by or on the basis of a regulation of the
Minister of Finance.
(2) The auditing procedures as referred to in paragraph (1) shall rule, among others,
re-audit, audit period, obligation to convey notification about audit result to
taxpayers and right of taxpayers to appear in closing conference of audit result in
a specified period.
(2) Unless taxpayers fulfill the obligation as referred to in article 29 paragraph (3) in
the implementation of audit thus the taxable income is calculated ex officio, the
Director of taxation shall convey notification about audit result to the taxpayers
and provide the taxpayers with a tight to appear in closing conference of audit
result in a specified period.
Article 32
(1) In exercising right and fulfilling obligations pursuant to taxation legislation, a
taxpayer shall be represented in the case of :
a. body, by the executive board;
b. body declared bankrupt, by the curator;
c. body in the course of dissolution, by the individual or board assigned to take
care
d body in liquidation, by the liquidator
e. undivided heritage, by one of the heir executing testament or the person taking
care of inherited wealth;
f immature children or persons under guardianship, by the proxy or guardian.
(2) The proxies as referred to in paragraph (1) shall individually and/or collectively
be responsible for paying tax due, except if they can prove and convince the
Director General of Taxation that their position will truly make it impossible for
them to be responsible for paying the tax due.
(3) An individual or body can appoint a proxy by means of a special power of
attorney exercise rights and fulfill obligations pursuant to taxation legislation.
(3a)The proxy as referred to in paragraph (3) shall meet requirements set by or on the
(4) The definition of executive board as referred to in paragraph (1) letter a shall
include persons who really have the authority to take part in making policies
and/or decisions in running the company.
41. The provision of Article 22 shall be abolished.

Article 33
Abolished
Article 34
(1) Any official shall be banned from informing other party of everything he/she knows
or being informed by the taxpayer within the frame of his/her position or job to
implement provisions in taxation legislation.
(2) The ban as referred to in paragraph (1) shall also be applicable to experts appointed
by the Director General of Taxation to assist in implementing the provisions of
(2a) Excepted from the provisions as referred to in paragraph (1) and paragraph (2)
shall be:
a. Officials and experts acting as witnesses or expert witnesses in court proceedings.
b. Officials and experts stipulated by the Minister of Finance to give testimonies to
other officials of state institutions authorized to undertake audit in the state finance
field.
(3) In the interests of the state, the Minister of Finance shall have the authority to issue
written evidence from or about the taxpayer to the party appointed.
(4) For the purpose of conducting investigation into criminal offences or civil offences
in the court at the request of the judge pursuant to the Criminal Code and the Civil
Code, the Minister of Finance can issue a written permit to the officials as referred
to in paragraph (1) and the experts as referred to in paragraph (2) to ask for written
evidence and information available to them about the taxpayer.
(5) The judges request as referred to in paragraph (4) shall mention the name of
suspect or defendant, information requested and the linkage between the relevant
criminal or civil case and the information requested.
Article 35
(1) If information or evidence from bank, public accountant, notary, tax consultant,
administrative office and/or the other third party having relations to the audited
taxpayers is needed in executing the provisions of taxation legislation, based on a
request form the Director General of Taxation, the parties shall give up the
requested information or evidence.
(2) In the case of the third parties as referred to in paragraph (1) being bound by an
obligation to keep it in secrecy, for the purpose of audit, tax collection or
investigation into criminal offence in the taxation field, the obligation to keep it in
secrecy shall be abolished, except for bank wherein the obligation to kept it in
secrecy shall be abolished on the basis of written request from the Minister of
Finance.
(3) Procedures for requesting information or evidence from the parties bound by the
obligation to keep it in secrecy as referred to in paragraph (2) shall be ruled by or on
the basis of a regulation of the Minister of Finance.
Article 35A
(1) Every government agency, institution, association, and other party shall give up
taxation-related data and information to the Directorate General of Taxation with
the provision here of regulated under government regulated by observing the
provision as referred to in article 35 paragraph (2).
(2) In the case of the data and information as referred to in paragraph (1) being not
sufficient, the Director General of Taxation shall be authorized to gather data and
information in the interest of the state revenue with the provision here of
regulated under a government regulation by observing the provision as referred to
in Article 35 paragraph (2).
Article 36
(1) The Director General of Taxation can:
a. reduce or abolish administrative sanction in the form of interest, fine and
increase which become due pursuant to taxation legislation if the sanction is
imposed due to ignorance of taxpayers or non-mistake of taxpayers
b reduce or nullify untrue tax assessment;
c reduce or nullify the tax collection form as referred to in Article 14, which is
untrue; or
d nullify result of tax audit or tax assessment resulting from tax audit, which is
implemented without:
1. conveying notification about audit result; or
2. closing conference of audit result with taxpayers.
(1a) The application for the matter as referred to in paragraph (1) latter a, latter b, and
letter c only can be submitted by taxpayers twice at the maximum.
(1b) The application for the matter as referred to in paragraph (1) letter d only can be
submitted by taxpayers once.
(1c) The Director General of Taxation in ngt later than 6 (six) months as from the date
of receipt of the application as referred to in paragraph (1) shall make a decision
on the submitted application.
(1d) In the case of the period as referred to paragraph (1c) elapsing but the Director
General of Taxation not making a decision, the application of the taxpayers as
referred to paragraph (1) shall be deemed acceptable
(1e) If taxpayers request, the Director General of Taxation shall give up information in
writing about the matters becoming the basis for rejecting or approving partly the
application of taxpayers as referred to in paragraph (1c)
(3) Technical directives for the provisions of paragraph (1), paragraph (1a), paragraph
(1b), paragraph (1c), paragraph (1d), paragraph (1e) shall be ruled by or on the
46. The provision of Article 36A shall be amended so as to read as follows:
Article 36A
(1) Tax officers due to their negligence or intentionally calculating or stipulating tax
in a way contravening the provision of taxation legislation shall be subject to
sanction pursuant to the provisions of legislation.
(2) Tax officers who in executing their tasks internationally act beyond their authority
ruled in the provisions of taxation legislation can be complained to an internal
unit of the Ministry of Finance, which is authorized to audit and investigate and if
the tax officers are proven committing the action, sanction shall be imposed in
accordance with the provision of legislation.
(3) Tax officers who in executing their tasks are proven extorting and threatening tax
payers to favor themselves unlawfully shall be charged with the penalty as
referred to in Article 268 of the Criminal Code.
(4) Tax officers intending to favor themselves unlawfully by abusing their power to
force someone to give something, pay or receive payment or to work something
for themselves shall be charged with the penalty as referred to in Article 12 of law
Number 31 Year 1999 regarding Anti-Corruption and its amendments.
(5) Tax officers shall not be liable to criminal and civil charge if the tax officers
execute their tasks on the basis of goodwill and in accordance with the provision
of taxation legislation.
47. Three articles shall be supplemented by between Article 36A and Article 37 to
become Article 36B, article 36C and article 36 D, which read as follow:
Article 36B
(1) The Minister of Finance shall be obligated to prepare code of conduct of
employees of the Directorate General of Taxation.
(2) The employees of the Directorate General of Taxation shall abide by the code of
conduct of employees of the Directorate General of Taxation.
(3) Supervision over the implementation and accommodation of complaints about
violation of code of conduct of employees of the Directorate General of Taxation
shall be done by committee for code of conduct with the provision here of ruled
by or on the basis of a regulation of the Minister of Finance.
Article 36C
The Minister of Finance shall set up a taxation supervisory committee with the
provisions hereof ruled by or on the basis of a regulation of the Minister of Finance
Article 36D
(1) The Directorate General of Taxation can be given incentives on the basis of
accomplishment of certain performance.
(2) The granting of the of the incentives as referred to in paragraph (1) shall be
stipulated through the state budget of revenue and Expenditure.
(3) Procedures for granting and utilizing the incentives as referred to in paragraph (1)
shall be ruled by or on the basis of a regulation of the Minister of Finance.
Article 37A
(1) Taxpayers conveying rectification of annual income tax returns before Tax Year
2007, which cause the amount of taxes yet to be paid to become bigger and are
realized in not later than one year after the enforcement of this law, can be given
deduction or abolition of administrative sanction in the form of interest due to
lateness in the settlement of the shortage of tax payments with the provision
hereof ruled by or the basis of a regulation of the Minister of Finance.
(2) Individual taxpayers voluntarily registering themselves to obtain taxpayers code
number in not later than one year after the enforcement of this law shall be given
abolition of administrative sanction against the unpaid or underpaid taxes for the
tax years before the taxpayer code number in obtained and tax audit shall not be
executed unless otherwise data or information certify that the annual tax returns
conveyed by the taxpayers are untrue or overpaid.
49. The provision of article 38 shall be amended so that it entirely as follows:
Article 38
Anybody who because of his/her act of negligence:
a. fails to submit a tax return ; or
b. submits a tax return but its content is not true or complete, or attaches false
information so that it can inflict a loss on the state revenue and the action
constitutes action after the first-time action as referred to in Article 13A shall be
subject to a fine as much as the amount of the unpaid or underpaid tax at the
minimum and twice the amount of unpaid or underpaid tax at the maximum or
sentenced to imprisonment for 3 (three) months at the minimum or one year at the
minimum.
Article 39
(1) Anybody who deliberately:
a. does not register to be given taxpayer code number or does not report
his/her business for validation as taxable entrepreneur;
b. abuses or uses without right the taxpayer code number or taxable
entrepreneur validation;
c. does not submit a tax return;
d. submits an incorrect or incomplete tax return and/or information; or
e. denies the audit as referred to in Article 29; or
f. shows false or falsified bookkeeping, records, or other document thus
seeming true or not describing the actual condition; or
g. does not perform bookkeeping or recording, does not show or lend books,
record, or other document;
h. does not keep books, records or documents becoming the basis for
bookkeeping or recording and other documents, including results of
processing of data from bookkeeping managed electronically or executed
by on-line application in Indonesia as referred to in Article 28 paragraph
(11); or
i. does not remit the withheld or collected taxes. Thus being potential to
inflict a loss on the state revenue, shall be sentenced to imprisonment for 6
(six) years at the minimum and 6 (six) years at the maximum and a fine as
much as twice of the amount of the unpaid or underpaid taxes or four
times the amount of unpaid or underpaid taxes at the maximum.
(2) The sentence as referred to in paragraph (1) shall be doubled if the person
concerned commits another criminal offence in the taxation field before a
period of 1 (one) year has passed, starting from the date after he/she has
completed his/her jail term.
(3) Anybody who attempts to commit a criminal offence by misusing or using
without right the taxpayer code number or taxable entrepreneur validation as
referred to in paragraph (1) letter b, or by submitting an incorrect or incomplete
tax return and/or information as referred to in paragraph (1) letter d within the
frame of applying for restitution or compensating tax or crediting tax, shall be
sentenced to imprisonment for 6 (six) month at the minimum and subject to a fine
as much as twice of the amount of the requested restitution and/or compensation
or credit at the maximum.
51. A new article shall be supplemented between Article 39 and Article 40 to become Article
Article 39A
Anybody intentionally:
a. Issuing and/or using tax invoice, tax collection form, tax withholding form and/or tax
payment form, which is not based on the actual transaction; or
b. Issuing tax invoice but not yet validated as taxable entrepreneur.
Shall be sentenced to imprisonment for 2 (two) years at the minimum and 6 (six) years at the
maximum as well as subject to a fine as much as twice of the amount of taxes in the tax
invoice, tax collection form, tax withholding form and/or tax payment form at the minimum
and 6 (six) times of the amount of the taxes in the invoice, tax collection form, tax
withholding form and/or tax payment form at the maximum.
Article 41
(1) The official who fails to keep the secret of the matter as referred to in Article 34 due to
his/her negligence, shall be sentenced to a maximum of 1 (one) year in jail and fined a
maximum of Rp25,000,000 (Twenty five million rupiah).
(2) The official who deliberately fails to meet his/her obligations or the individual who
makes the official as referred to in Article 34 failing to meet his/her obligations, shall be
sentenced to a maximum of 2 (two) years in jail and fined a maximum of Rp50,000,000
(Fifty million rupiah).
(3) The indictment against the criminal offences as referred to in paragraph (1) and
paragraph (2) shall only be conducted on the basis of a complaint from the individual
whose privacy is violated.
53. The provision of Article 41A shall be amended so that it entirely reads as follows:
Article 41A
Anybody who pursuant to Article 35 of this law is required to provide information or

evidence requested but deliberately fails to do so, or provide incorrect information or
evidence, shall be sentenced to a maximum of 1 (one) year in jail and fined a maximum of Rp
25,000,000 (twenty five million rupiah).
54. The provision of Article 41B shall be amended so that it entirely reads as follows:
Article 41B
Anybody who deliberately hampers or obstructs investigation into criminal offence in the
taxation field shall be sentenced to a maximum of 3 (three) years in jail and fined a maximum
of Rp 75,000,000 (seventy five million rupiah).
55. A new article shall be supplemented between Article 41B and Article 41C, which reads as
follows:
Article 41C
(1) Everybody intentionally not fulfilling the obligation as referred to in Article 35A
paragraph (1) shall be sentenced to a maximum of one year in jail and fined a maximum
of Rp1,000,000,000 (one billion rupiah).
(2) Everybody intentionally making the official or other party unable to fulfill the obligation
as referred to in Article 35A paragraph (1) shall be sentenced to a maximum of 10 (ten)
years in jail and fined a maximum of Rp800,000,000 (eight hundred million rupiah).
(3) Everybody intentionally not giving data and information requested by the Director
General of Taxation as referred to in Article 35A paragraph (2) shall be sentenced to a
maximum of 10 (ten) years in jail and fined a maximum of Rp800,000,000 (eight
hundred million rupiah).
(4) Everybody intentionally misusing taxation data and information thus inflicting loss on the
state shall be sentenced to a maximum of one year in jail and fined a maximum of
Rp500,000,000 (five hundred million rupiah).
Article 43
(1) The provisions as referred to in Article 39 and Article 39A shall also apply to
representative, proxy, employee of taxpayer or other parties ordering to do so, taking part
in committing it, suggesting or helping commit criminal offence in the taxation field.
(2) The provisions as referred to in Article 41A and Article 41B shall also apply to parties
ordering, suggesting or helping commit criminal offense in the taxation field.
57. Before Article 44 in CHAPTER IX, a new article shall be supplemented to become Article
Article 43A
(1) Based on information, data, report and complaint, the Director General of Taxation shall
be authorized to examine initial evidence before investigation into criminal offense in the
taxation field is executed.
(2) If there is an indication of involvement of officers of the Directorate General of Taxation
in criminal offense in the taxation field, the Minister of Finance can assign the internal
auditing unit within the Ministry of Finance to examine initial evidence.
(3) In the case of substance of corruption being found from the initial evidence, the
implicated employee of the Directorate General of Taxation shall be processed pursuant
to the provisions of the anticorruption law.
(4) Procedures for examining the initial evidence of criminal offence in the taxation field as
referred to in paragraph (1) and paragraph (2) shall be ruled by or on the basis of a
Article 44
(1) Criminal offences in the taxation sector only can be investigated by certain state civilian
officials at the Directorate General of taxation, who are given special authority to act as
investigators of criminal offences in the taxation sector, as referred to the Penal Code in
force.
(2) The investigators authority as referred to in paragraph (1) shall be:
a. Receiving, searching, gathering, and examining information or reports related to
criminal offences in the taxation sector to make the information or reports more
complete and clearer;
b. Examining, searching, and gathering information on individuals or bodies to
ascertain the truth of actions taken in connection with criminal offences in the
taxation sector;
c. Asking for information and evidence from individuals or bodies in connection with
criminal offences in the taxation sector;
d. Examining books, records, and other documents related to criminal offences in the
taxation sector;
e. Ransacking places to obtain evidence of bookkeeping, recording, and other
documents, and confiscating the evidence;
f. Asking for help from experts to conduct investigation into criminal offences in the
taxation sector;
g. Ordering an individual to stop and/or banning an individual from leaving a room or
place at the time when an audit is underway and check the identity of the individual
and/or documents brought as referred to in letter e;
h. Taking a picture of the individual implicated in the criminal offence in the taxation
sector;
i. Summoning an individual to get his/her testimonies or to interrogate him/her as
suspect or witness;
j. Stopping investigation;
k. Taking other actions needed to ensure the smooth investigation of criminal offences
in the taxation sector pursuant to the responsible law.
(3) The investigators as referred to in paragraph (1) shall notify the commencement of
investigation and report the results of investigation to the public prosecutors through
investigators of the Indonesian Police, pursuant to the Penal Code in force.
(4) In implementing the investigation authority as referred to in paragraph (1), the
investigators can seek assistance from other law enforcement apparatuses.
59. The provision of Article 44B shall be amended so that it entirely reads as follows:
Article 44B
(1) In the interest of state revenue, based on a request from the Minister of Finance, the
Attorney General can discontinue investigation into criminal offences in the taxation
sector in not later than 6 (six) months as from the date of the request.
(2) The discontinuation of investigation into criminal offences is the taxation sector as
referred to in paragraph (1) only can be realized after taxpayer settle tax due which is not
paid or underpaid or should not deserve to restitution plus administrative sanction in the
form of a fine as much as 4 (four) times of the amount of tax, which is not paid or
underpaid or should not deserve to restitution.
Article II
1. The provisions of Law No. 6/1183 on Taxation General Provisions and Procedures, as
already amended several times and the latest by Law No. 16/2000 shall apply to all taxation
rights and obligations from Tax Year 2001 to Tax Year 2007, which have not been settled.
2. Excepted from the provision as referred to in point 1, stipulation for Tax Period, Part of Tax
Year or Tax Year 2000 and previously, other than stipulation as referred to in Article 13
paragraph (5) or Article 15 paragraph (4) shall expire in not later than Tax Year 2013.
3. The law shall come into force as from January 1, 2008.
For public cognizance, this law shall be promulgated by placing it in the Statute Book of the
Republic of Indonesia.
Ratified in Jakarta
On July 17, 2007
THE PRESIDENT OF REPUBLIC OF INDONESIA,
Sgd.
Dr. H. Susilo Bambang Yudhoyono
Promulgated in Jakarta
On July 17, 2007
THE MINISTER OF LAW AND HUMAN RIGHTS OF
REPUBLIC OF INDONESIA,
Sgd.
ANDI MATTALATA, SH,MH.
STATUTE BOOK OF REPUBLIC OF INDONESIA OF
2007 NUMBER 85
ELUCIDATION
ON LAW OF THE REPUBLIC OF INDONESIA
NO. 28/2007
REGARDING
THE THIRD AMENDMENT TO
LAW NUMBER 6 YEAR 1983
CONCERNING TAXATION
GENERAL PROVISIONS AND PROCEDURES
GENERAL
1. The law regarding taxation general provisions and procedures is based on the philosophy of
the state ideology Pancasila and the 1945 Constitution, wherein provisions upholding the
rights of citizens and placing taxation obligations as state obligations are contained. This law
contains general provisions and taxation procedures, which in principle apply to the material
taxation law, except if the taxation law in question has already governed by itself general
provisions and taxation procedures.
2. In line with economic, information technology, social and political developments, it is
deemed necessary to amend the law regarding taxation general provisions and procedures.
The amendment aims at providing better justice, enhancing service for taxpayers, legal
certainty and law enforcement as well as anticipating advancements in the information
technology sector and changes in material provisions in the taxation sector. In addition, the
amendment is also intended to enhance professionalism of taxation apparatuses, transparency
of taxation administration and voluntary compliance of taxpayers.
3. Simple system, mechanism and technical procedures for taxation rights and obligations
become the nature and characteristic in the amendment to the law by adopting a selfassessment system persistently. The amendment is mainly related to enhancement of
equilibrium between the rights and obligation of taxpayers so that the taxpayers can exercise
their taxation rights and obligations better.
4. By sticking to the principles of legal certainty, justice and simplification, the direction and
goal of the amendment to the law regarding taxation general provisions and procedures refers
to the following key policies:
a. Enhancing efficiency of tax collection in the framework of supporting state revenue;
b. Enhancing service, legal certainty and justice for the people so as to drive up
competitiveness in the investment sector by supporting the development of small-and
medium-scale businesses;
c. Adjusting to demand of socio-economic development as well as developments in the
information technology sector;
d. Enhancing the balance between rights and obligations;
e. Simplifying taxation administrative procedures;
f. Enhancing the application of self-assessment principles accountably and consistently; and
g. Supporting business climate towards a better conducive and competitive condition.
The implementation of the key policies is hopefully able to increase the state revenue in
the medium and long terms thanks to the enhancement of voluntary compliance and the
improving business climate.
ARTICLE BY ARTICLE
Article I
Point 1
Article 1
Sufficiently clear
Point 2
Article 2
Paragraph (1)
All taxpayers already fulfilling the subjective and objective requirements in accordance
with provisions of taxation legislation based on the self-assessment system, are obliged to
register with the office of the Directorate General of Taxation for the purpose of
recording as taxpayers and obtaining taxpayer code numbers.
The subjective requirements are requirements in accordance with the provisions on tax
subjects in the 1984 Income Tax Law and its amendments.
The subjective requirements are requirements for tax subjects receiving or earning
income or obliged to withhold/collect in accordance with the provisions of the 1984
Income Tax Law and its amendments.
The obligation to register also applies to married women who are subject to tax separately
because of separate life based on the judges verdict or because of being desired in
writing based on an agreement on the separation of income and wealth.
Married women other than those mentioned above can register themselves to obtain
taxpayer code numbers on behalf of their names so that the married women ca exercise
their taxation rights and fulfill taxation obligations separately from the taxation rights and
obligations of their couple.
The taxpayer code numbers serve as a means of tax administration and are used as the
identity cards of the taxpayers and therefore, each taxpayer is only given one taxpayer
code number. In addition, taxpayer code numbers are also used to make tax payments in
an orderly way and supervise tax administration. Where taxation documents are
concerned, taxpayers are required to attach their taxpayer code numbers to them.
Taxpayers who do not register with the office of the Directorate General of Taxation to
obtain taxpayers code numbers are subject to sanction in accordance with the provisions
of taxation legislation.
Paragraph (2)
Any taxpayer as an entrepreneur subject to value added tax pursuant to the Value Added
Tax Law of 1984 and its amendments, is required to report his/her business to be
validated as taxable entrepreneur.
Any individual taxpayer is obliged to report his/her business to the office of the
Directorate General of Taxation whose jurisdiction covers the domicile and the business
site of the taxpayer. Any corporate taxpayer is required to report its business to the office
of the Directorate General of Taxation whose jurisdiction covers the domicile and the
business site of the entrepreneur.
A such, individual or corporate entrepreneur that has business sites in the jurisdictions of
several offices of the Directorate General of Taxation is required to report business to be
validated as a taxable entrepreneur, both in the office of the Directorate General of
Taxation whose jurisdiction covers the residence or domicile of the entrepreneur and in
the office of the Directorate General of Taxation whose jurisdiction covers the business
site.
The validation of taxable entrepreneur is important not only to know the actual identity of
the taxable entrepreneur but also to exercise rights and obligations in the field of value
added tax and luxury sales tax and control tax administration.
Paragraph (3)
Where certain taxpayers and taxable entrepreneurs are concerned, the Director General of
Taxation can appoint the offices of the Directorate General of Taxation other than those
referred to in paragraph (1) and paragraph (2) as places of registration to obtain taxpayer
code numbers and validate them taxable entrepreneurs.
In addition, individual taxpayers of certain entrepreneurs, namely individual taxpayers
that have business sites spreading in several places, for instance, electronics traders that
have shops in several shopping centers, are required to register not only with the office of
the Directorate General of Taxation whose jurisdiction covers the residence of the
taxpayers but also with the offices of the Directorate General of Taxation whose
jurisdiction covers the business sites of the taxpayers.
Paragraph (4)
Taxpayers or taxable entrepreneurs who do not fulfill the obligation to register with
and/or report their businesses to the office of the Directorate General of Taxation can be
given taxpayer code numbers and/or validated as taxable entrepreneurs on an official
basis. This can be done if based on the data obtained or owned by the Directorate General
of Taxation the individuals or bodies or entrepreneurs turn out to have fulfilled the
qualifications to obtain taxpayer code numbers and/or to be validated as taxable
entrepreneurs.
Paragraph (4a)
The paragraph rules that the ex-officio issuance of taxpayer code number and/or
validation of taxable entrepreneur must observe the moment of fulfillment of subjective
and objectives requirements by the taxpayers. Subsequently, the taxpayers are not
excluded from the fulfillment of taxation obligations in accordance with the provisions of
taxation legislation. The regulation aims at providing legal certainly for taxpayers and the
government with regards to obligation of the taxpayers to register themselves and rights
to obtain taxpayer code number and/or be validated as taxable entrepreneur. For instance,
in the case of taxpayer code number being issued ex-officio to a taxpayer in 2008 and the
taxpayers turning out to meet the subjective and objective requirements in accordance
with provisions of taxation legislation as from as 2005, the taxation obligations of the
taxpayers arise as from 2005.
Paragraph (5)
The period of time to fulfill the obligation to register with the office of the Directorate
General of taxation to obtain taxpayer code numbers and the obligation to report
businesses to the office of the Directorate General of Taxation to declare taxable
entrepreneurs is limited because this is related to the time of tax due and the obligation to
impose tax due. Provisions on the period of time for the registration of taxpayers or
taxable entrepreneurs and reporting of business, the procedures of issuing and abolishing
taxpayer code numbers, declaring taxable entrepreneurs and revoking taxable
entrepreneur status are to be provided for by or on basis of regulation of the Minister of
Finance.
Paragraph (6)
Sufficiently clear
Paragraph (7)
Sufficiently clear
Paragraph (8)
Sufficiently clear
Paragraph (9)
Sufficiently clear
Point 3
Article 2A
Sufficiently clear
Point 4
Article 3
Paragraph (1)
For income taxpayers, a tax return function as a means to report and account for the
calculation of the actual tax due and to report on:
a.
Payment or settlement of tax made by the income taxpayers themselves or
payment or settlement of tax through the withholding or collection of tax by
other party within 1 (one) tax year or a part of tax year;
b.
Income that constitutes an object of tax and/or a non-object of fax;
c.
Assets and liabilities;
d.
Payments from the tax withholder or collector with regard to the withholding or
collection of taxes on other individuals or bodies within 1 (one) tax period
stipulated by the existing taxation legislation.
For taxable entrepreneurs, a tax return functions as a means to report account for the
calculation of value added tax and luxury sales tax that actually become due and to
report:
a.
The crediting of input taxes to output taxes;
b.
Payment or settlement of tax made by the taxable entrepreneurs themselves

and/or payment or settlement of tax through other party within 1 (one) tax period,
stipulated by the existing taxation legislation;
For tax withholders or collectors, a tax return functions as a means to report or account
for the taxes withheld or collected and remitted.
Referred to as filling a tax return is the filling of a tax return in the form of paper and/or
electronic form properly, clearly and completely in accordance with directives for
completing stipulated on the basis of the existing taxation legislation.
Referred to as proper, complete and clear in filling a tax return:
a.
Proper means proper in calculation, including correct in the application of
provisions of taxation legislation in writing and in accordance with the actual
condition;
b.
Complete means containing all substances related to tax objects and other
substances, which must be reported in a tax return; and
c.
Clear means reporting origins and source of tax objects and other substances,
which must be reported in a tax return.
The properly, clearly and completely filled tax return must be conveyed to the office of
the Directorate General of Taxation where the taxpayer is registered or validated or other
places stipulated by the Director General of Taxation.
The obligation to convey tax return by tax withholders or collectors is realized for every
tax period.
Paragraph (1a)
Sufficiently clear
Paragraph (1b)
Sufficiently clear
Paragraph (2)
In order to provide better services for and facilitate taxpayers, tax return forms are made
available in the offices of the Directorate General of Taxation and other places appointed
by the Director General of Taxation that are accessible by taxpayers. In addition,
taxpayers also can take tax return by other methods, such as accessing website of the
Directorate General of Taxation to obtain the tax return form.
Paragraph (3)
This paragraph rules the deadline for the submission of tax return that is considered
sufficient by taxpayers to prepare anything related to the payment of tax and the
settlement of bookkeeping.
Paragraph (3a)
Taxpayers belonging with certain criteria, among others taxpayers belonging to smallscale businesses can:
a.
b.
Convey Periodic Tax Return of Income Tax-article 25 for several tax periods in
one in the lump sum with the provision that the payment of all taxes yet to be
settled in accordance with the periodic tax, returns id realized in not later than the
last tax period; and/or
Convey the periodic tax returns other than those mentioned in letter a for several
tax periods in lump sum with the provision that the payments for the respective
tax periods are done in accordance with the deadline stipulated for the tax
periods.
Paragraph (3b)
Sufficiently clear
Paragraph (3c)
Sufficiently clear
Paragraph (4)
If individual or corporate taxpayer is unable to convey tax return in the period already
stipulated in paragraph (3) letter b or letter c because of the large size of their business
activities and technical problems in working out the financial statement or other factors
so that they are difficult the deadline for the submission of the financial statement and
need additional time to do so, they can extend the deadline for submitting the annual
income tax return by means of conveying notification in writing or other methods, such
as electronic notification to the Director General of Taxation.
Paragraph (5)
In order to prevent any attempt to evade and/or extend the period of time for the payment
of tax due within one tax year that must be made prior to the deadline for the submission
of annual tax returns, it is necessary to set requirements leading to the imposition of
administrative sanctions in the form of interest on taxpayers wishing to extend the
deadline for the submissions of annual income tax returns.
The requirements are in the form of obligation to provide provisional return by
mentioning the amount of tax that must be paid based on the provisional calculation
within one tax year and tax payment form as evidence of settlement as an enclosure to the
notification about the extension of the deadline for submitting annual income tax returns.
Paragraph (5a)
In a bid to foster taxpayers not conveying tax return until the stipulated deadline,
admonitory can be issued to the taxpayers.
Paragraph (6)
Since tax returns as a means for taxpayers among others to report and account for the
calculation and payment of taxes, in order to facilitate the filling and administration of
tax returns, the model and content of tax return, information and documents, which must
be enclosed and way adopted to convey tax return are to be provided for by or on the
Annual income tax return must contain at least the amount of turnover, the amount of
income, the amount of taxable income, the amount of tax due, the amount of tax credits,
the amount of underpaid or overpaid taxes, as well as assets and liabilities outside
business activities or free jobs when it comes to individual taxpayers.
Annual income tax returns of taxpayers required to perform bookkeeping must be
accompanied by financial statements in the form of balance sheet and profit/loss
statement as well as other information needed to calculate the amount of taxable income.
Periodic value added tax returns must contain at least the amount of tax base, the amount
of output taxes, the amount of creditable input taxes and the amount of underpaid or
overpaid taxes.
Paragraph (7)
A signed tax return and its enclosures are an integral part, which serves as the legal
element of tax return. As such, the tax return, which has been submitted but is not
furnished by the required attachments is not deemed as tax return in the administration of
the Directorate General of Taxation. In this case, the tax return is deemed as taxation
data.
If a tax return certifying overpayment is submitted after elapsing 3 (three) years as from
the expiration of the tax period, part of tax year or tax year and taxpayer has been
reminded in writing or tax return is conveyed after the Director General of Taxation
audited or issued tax assessment, the tax return is also deemed taxation data.
Paragraph (7a)
Sufficiently clear
Paragraph (8)
In principle, any income taxpayer is required to submit a tax return. On account of
efficiency or other matters, the Minister of Finance can exempt a taxpayer from the
obligation to submit a tax return, for instance, an individual taxpayer who receives or
earn income below untaxed income but because of certain interests is required to have a
taxpayer code number.
Point 5
Article 4
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Paragraph (4a)
Financial statements of the respective taxpayers mean financial statements resulting from
business activities of the respective taxpayers.
Example:
PT A has share in PT B and PT C. In the example, PT A has an obligation to enclose
consolidated financial statement of PT A and subsidiaries, also enclose financial
statements of business of PT A (before consolidation), while PT B and PT C are oblihed
to enclose their respective financial statements, not consolidated financial statement.
Paragraph (4b)
Sufficiently clear
Paragraph (5)
Procedures for receiving and processing tax returns contain matters related among others
to the verification of completeness, the issuance of receipt, the classification of overpaid,
underpaid, and non tax returns, the procedures for recording and follow-up
administration, to be provided for by or on the basis of a regulation of the Minister of
Finance.
Point 6
Article 6
Paragraph (1)
Sufficiently clear
Paragraph (2)
In an effort to provide better services to taxpayers and in line with the rapid development
of information technology, taxpayers need other ways to fulfill the obligation to submit
their tax returns, such as electronic submission.
Paragraph (3)
The receipt and sending date of tax returns submitted by mail serve as evidence of
receipt, provided that the tax returns is question have been complete in the sense that they
meet all the requirements as referred to in Article 3 paragraph (1), paragraph (1a) and
paragraph (6).
Point 7
Article 7
Paragraph (1)
The imposition of administrative sanction in the form of a fine as ruled in this paragraph
aims at ensuring orderly tax administration and enhancing compliance of taxpayers in
fulfilling the obligation to convey tax returns.
Paragraph (2)
Disasters are national disasters stipulated by the Minister of Finance.
Point 8
Article 8
Paragraph (1)
Any taxpayer who has made mistakes in filling in a tax return still has the right to rectify
the tax return on his/her own will, on condition the Director General of Taxation has not
started auditing. Referred to as starting to audit is at the time when a notification of tax
audit is conveyed to the taxpayer, or representative, or proxy, or employee, or a mature
member of the taxpayers family.
Paragraph (1a)
Expiration of stipulation is a 5 (five) years period after the moment when the tax becomes
due or the tax period, part of tax year or tax year as referred to in Article 13 paragraph (1)
ends.
Paragraph (2)
The rectification of tax returns by taxpayers on their own will causes the amount of tax
due and the amount of tax payments to change from the initial amounts.
The lack of tax payments as a result of the rectification is subject to administrative
sanction in the form of interest as much as 2% (two percent) per month.
The interest indebted to the lack of tax payments is calculated as from the end the
deadline for the submission of annual tax return to the date of payment and part of month
is rounded up to one month.
Referred to as one month is the number of days in the calendar month, e.g. from June 22
to July 21, while part of month is the number of days not reaching one month full, e.g.
from June 22 to July 5.
Paragraph (2a)
Sufficiently clear
Paragraph (3)
Any taxpayer who violates the provisions in Article 38 as long as investigation has not
been conduction, even if audit has been conducted and the taxpayer has disclosed his/her
mistakes and then settled the actual amount of tax due including administrative sanction
in the form of fine as much as 150% of the amount of underpaid tax, is exempted from an
investigation.
But if investigation has been conducted and the commencement of the investigation has
been notified to the public prosecutor, the taxpayer is denied access to rectify tax return
himself/herself.
Paragraph (4)
Even though the Director General of Taxation has audited but has not issued a tax
assessment, the taxpayers who have and have not rectified tax returns still have a chance
to disclose irregularities in the already-submitted tax returns, which may be in the form of
annual tax returns or periodic tax returns for the audited years or periods. The
irregularities in filling tax returns is disclosed in a special report and must reflect the
actual condition so that the actual amount of tax due can be ascertained. However, audit
still continues until finish to prove the truth of report of the taxpayer.
Paragraph (5)
The shortage of tax attributable to the disclosure as referred to in paragraph (4) is subject
to administrative sanction in the form of an increase as high as 50% (fifty percent) of the
amount of the underpaid tax and must be settled by the taxpayer before the disclosure
report is conveyed. However, audit still continues. If, based on result of the audit, the
disclosure report is not suitable to the actual condition, tax assessment can be issued due
to the untrue disclosure.
Paragraph (6)
In connection with the issuance of a decision on objection, decision on rectification,
decision on appeal or decision on judicial review for a tax year causing fiscal loss to be
different from the fiscal loss already compensated in annual tax returns of the following
year or years, fiscal loss will be adjusted in accordance with tax assessment, decision on
objection, decision on rectification, decision on appeal or decision on judicial review in
the calculation of income tax of the following years. The limitation to 3 (three) month is
intended to ensure orderly administration without eliminating right of the taxpayer to loss
compensation.
In the case of taxpayer rectifying tax return after alsping the 3 (three) month period or not
conveying rectification attributable to tax assessment, decision on objection, decision on
rectification, decision on appeal or decision on judicial review of the previous tax year or
tax years, which certifies that the fiscal loss is different from the fiscal loss already
compensated in annual income tax return, the Director General of Taxation will count it
in stipulating taxation liability of the taxpayer.
The following example gives an illustration of the above matter:
Example 1
PT A submitted an annual income tax return of 2008, which certifies that
Net income
Rp 200,000,000.00
Loss compensation based on Annual income tax return of 2007 Rp 150,000,000.00
------------------- (-)
Taxable income
Rp 50,000,000.00
The annual income tax return of 2007 is audited and on January 6,2010, tax assessment
cerifying that the fiscal loss is amounting to Rp 70,000,000.00 is issued
Based on the tax assessment, the Director General of Taxation will change the calculation
of the taxable income of 2008 to become as follows:
Net income
Rp 200,000,000.00
Loss according to tax assessment of 2007
Rp 70,000,000.00
------------------- (-)
Taxable income
Rp 130,000,000.00
Therefore, the amount of the taxable income of the tax return, which is originally
amounting to Rp 50,000,000.00 (Rp 200,000,000.00 Rp 150,000,000.00), after the
rectification, changes into Rp 130,000,000.00 (Rp 200,000,000.00 Rp 70,000,000.00).
Example 2
PT B Submitted an annual income tax return of 2008, which certifies that
Net income
Rp 300,000,000.00
Loss compensation based on Annual income tax return of 2007 Rp 200,000,000.00
------------------- (-)
Taxable income
Rp 100,000,000.00
The annual income tax return of 2007 is audited and on January 6,2010, tax assessment
cerifying that the fiscal loss is amounting to Rp 250,000,000.00 is issued
Based on the tax assessment, the Director General of Taxation will change the calculation
of the taxable income of 2008 to become as follows:
Net income
Rp 300,000,000.00
Loss according to tax assessment of 2007
Rp 250,000,000.00
------------------- (-)
Taxable income
Rp 50,000,000.00
Therefore, the amount of the taxable income of the tax return, which is originally
amounting to Rp 100,000,000.00 (Rp 300,000,000.00 Rp 200,000,000.00), after the
rectification, changes into Rp 50,000,000.00 (Rp 300,000,000.00 Rp 250,000,000.00).
Point 9
Article 9
Paragraph (1)
The deadline for the payment and remittance of tax due for a certain time or tax period is
set by the Minister of Finance, with the deadline not exceeding 15 (fifteen) days after the
tax has become due or the tax period has expired. Lateness in the payment and deposit of
tax due leads to the imposition of administrative sanction pursuant to the provisions in
force.
Paragraph (2)
Sufficiently clear
Paragraph (2a)
The paragraph rules the imposition of interest on lateness in the payment or remittance of
taxes. To clarify the calculation method, here is an example:
Periodical installment of Income Tax-article 25 on PT A in 2008 is amounting to Rp
10,000,000.00 per month. The periodical installment of May 2008 is paid on June 18,
2008 and reported on June 19,2008. if tax collection form is issued on July 15,2008, the
section in the form of interest in the tax collection form is counted one month as follows:
1 x 2% x Rp 10,000,000.00 = Rp 200,000.00
Paragraph (2b)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (3a)
Sufficiently clear
Paragraph (4)
Based on application from a taxpayer, the Director General of Taxation can approve
application to pay by installments on or defer the payment of tax due including the
remainder of income tax yet to be paid in the annual income tax return, although the
maturity date of payment has been set.
The privilege is given carefully for a maximum of 12 (twelve) months and is limited to
Taxpayers who are really in liquidity difficulty.
Point 10
Article 10
Paragraph (1)
Sufficiently clear
Paragraph (1a)
Sufficiently clear
Paragraph (2)
The procedures for paying, remitting and reporting taxes as well as the procedures for
paying by installments on or postponing the payment of taxes ruled by or on the basis of
a regulation of the Minister of Finance are expected to facilitate tax payments and
administration.
Point 11
Article 11
Paragraph (1)
If after the actual amount of tax due and the amount of tax credits have been calculated
and the calculation shows a positive difference (the amount of tax credits is larger than
actual amount of tax due) or the payment of tax which should not be indebted has been
recognized, the taxpayer is entitled to restitution of overpaid tax, on condition that the
taxpayer has no tax arrears.
If the taxpayer still has tax arrears covering all types of taxes either at the levels of head
office or branches, the excess of tax payments must first be deducted from the tax debt
and the remainder, if any, is returned to the taxpayer.
Paragraph (1a)
Sufficiently clear
Paragraph (2)
In order to ensure legal certainty for taxpayers and orderly tax administration, the
deadline for restitution of the excess of tax payment is set at one month at the maximum:
a.
For the overpaid tax assessment as referred to in Article 17, as from the date of
receipt of written application for restitution of overpaid taxes;
b.
For the overpaid tax assessment form as referred to in Article 17 paragraph (2)
and Article 17B, as from the date of issuance;
c.
For the decision on initial restitution of overpaid tax as referred to in Article 17C
and Article 17D, as from the date of issuance;
d.
For decision on objection, decision on rectification, decision on reduction of
administrative sanction, decision on abolition of administrative sanction, decision
on reduction of tax assessment, decision on nullification of tax assessment or
decision on granting of interest compensation, as from the date of issuance;
e.
For decision on appeal, as from the date of receipt of decision on appeal by the
Office of the Directorate General of Taxation authorized to implement the court
decision; or
f.
For decision on review, as from the date of receipt of decision on review by the
Office of the Directorate General of Taxation authorized to implement the court
decision
up to the date issuance of decision on restitution of overpaid tax.
Paragraph (3)
In order to create a balance between rights and obligation among taxpayers through better
service, this paragraph stipulates that due to a delay in restitution of the excess of tax
payments from the period of time as referred to in paragraph (2), the relevant taxpayer
deserves interest as much as 2% (two percent) per month, calculated as from the end of
the period of 1 (one) month to the moment of the issuance of decision on restitution of
overpaid tax.
Paragraph (4)
Sufficiently clear
Point 12
Article 12
Paragraph (1)
In principle, tax becomes due at the time when a taxable object emerges, but in the
interest of tax administration tax becomes due:
a.
In a certain time, for income tax withheld by a third party;
b.
At the end of period, for employees income tax withheld by employer, or that
collected by other party on business activities, or by a taxable entrepreneur on the
withholding of value added tax and luxury sales tax;
c.
At the end of tax year, for income tax.
The amount of tax due already withheld, collected, or yet to be paid by taxpayers
themselves after the arrival of time or period for the settlement of tax as referred to in
Article 9 and Article 10 paragraph (2), must be remitted by the taxpayers to the state cash
through post offices or state-or regional government-owned banks or other places
regulated by or on the basis of regulation of the Minister of Finance as referred to in
Article 10 paragraph (1).
Based on this law, the Directorate General of Taxation is not obliged to issue a tax
assessment to all tax returns submitted by taxpayers. Such a tax assessment form is only
issued to certain taxpayers due to irregularities in filling tax returns or due to the finding
of fiscal data not reported by the taxpayers.
Paragraph (2)
These provision rules that the taxpayers who have calculated and paid tax due properly in
accordance with provisions of taxation legislation and reported it in the tax return need
not be given a tax assessment form nor a decision from the tax administration.
Paragraph (3)
If based on the results of an audit or other information, the tax calculated and reported in
the relevant tax return is later found untrue, for instance, the amount of costs exceeds the
actual amount, the Director General of Taxation will set the amount of tax due as it is
pursuant to the provisions of taxation legislation.
Point 13
Article 13
Paragraph (1)
The provision of this paragraph authorizes the Director General of Taxation to issue
underpaid tax assessment, which is basically applied to only the certain cases as referred
to in this paragraph. Therefore, the provision is only applied to taxpayers not fulfilling the
formal and/or material obligations on the basis of audit result or other information. The
other information is concrete data obtained or owned by the Director General of
Taxation, among others, results of confirmation of tax invoices and income tax
withholding form. The authority delegated by the provisions of taxation legislation to the
Director General of Taxation to undertake the fiscal correction is restricted up to a period
of 5 (five) years.
Based on the provision as referred to in paragraph (1) letter a, a tax assessment is issued
unless taxpayers pay taxes accordingly pursuant to the provisions of taxation legislation.
Taxpayers are known not paying tax or paying tax less than in the amount of tax due
because the taxpayers are audited and based on the audit result, the taxpayers are
ascertaining not paying tax or paying tax less than in the amount of tax due.
Audit can be executed in residence, domicile and/or business place of taxpayers.
Underpaid tax assessment also can be issued if the Director General of Taxation has other
data outside the data conveyed by the taxpayers themselves and based on the data, the
taxpayers can be ascertained not fulfilling their taxation liabilities according. In order to
ascertain the truth of the data, the taxpayers can be audited.
In the case of taxpayers not conveying tax return on time even though the taxpayers have
been reminded in writing and not either conveying the tax return in the period stipulated
in the reminder as referred to in paragraph (1) letter b, the condition brings about a
consequence that the Director General of Taxation can issue underpaid tax assessment
ex-officio. Due to the stipulation, the taxpayers are subject to administrative sanction in
the form of the increase as referred to in paragraph (3).
The reminder is, among others, intended to open opportunity for the taxpayers having
goodwill to convey reasons or causes making them unable to convey the tax return
because of force majeure.
Taxpayers not implementing taxation obligations in the value added tax and sales tax on
luxury goods, which cause the unpaid or underpaid tax as referred to in paragraph (1)
letter c are subject to administrative sanction by issuing underpaid tax assessment plus an
increase as high as 100% (one hundred percent).
In the case of taxpayers not performing the bookkeeping as referred to in Article 28 or
not fulfilling the request as referred in Article 29 during the audit thus making the
Director General of Taxation unable to count the amount of tax, which should become
due as referred to in paragraph (1) letter d, the Director General of Taxation is authorized
to issue underpaid tax assessment by ex-officio calculation, namely the calculated based
on data not only obtained by taxpayers.
Verification of descriptions of the calculation used as the basis for ex-officio calculation
by the Director General of Taxation is charged to taxpayer, for example:
1.
The bookkeeping as referred to in Article 28 is incomplete thus the calculation of
profit/loss or turnover becomes unclear;
2.
Bookkeeping documents are incomplete thus points in the bookkeeping cannot be
verified; or
3.
Based on a series of audit and/or facts, documents or other supporting data are
allegedly obscured in a certain place thus the attitude clearly indicates that the
taxpayers have not shown goodwill to help ensure the smooth implementation of
audit.
The verification charge also applies to the issued stipulation as referred to in paragraph
(1) letter b.
Paragraph (2)
The paragraph rules administrative sanction imposed on taxpayers violating the taxation
obligation as referred to in paragraph (1) letter a and letter e. The administrative sanction
is in the form of interest as high as 2% (two percent) per month, which is mentioned in
underpaid tax assessment.
Even though the underpaid tax assessment has been issued over 2 (two) years as from the
expiration of the tax year, the interest imposed on the shortage is only effective for 2
(two) years.
Example: Underpaid Income Tax Assessment
Taxpayer PT A has taxable income amounting to Rp 100,000,000 in Tax Year 2006 and
conveys tax return punctually.
Based on audit result, underpaid tax assessment is issued in April 2009 so that the
sanction in the form of interest is counted as follows:
1.
Taxable income
Rp 100,000,000.00
2.
Tax payable (30% x Rp 100,000,000.00)
Rp
30,000,000.00
3.
Tax credit
Rp 10,000,000.00 (-)
4.
Underpaid tax
Rp
20,000,000.00
5.
Interest for 24 months (24 x 2% x Rp 20,000,000.00) = Rp 9,600,000.00 (+)
6.
Amount of tax yet to be paid
Rp
29,600,000.00
In the case of taxpayer not reporting business activity for validation as taxable
entrepreneur, tax taxpayer, besides paying the tax due, is also subject to administrative
sanction in the form of fine as high as 2% (two percent) per month of the amount of the
underpaid tax, starting from the expiration of the tax period for a period of 24 (twenty
four) months at the maximum.
Paragraph (3)
The paragraph rules administrative sanction of a tax assessment attributable to violation
of the taxation obligation as referred to in paragraph (1) letter b, letter c and letter d. The
administrative sanction in the form of the increase constitutes a proportional amount5,
which must be supplemented to be principal underpaid tax.
The amount of administrative sanction in the form of the increase is different by taxes,
namely 50% (fifty percent) for income tax paid by taxpayer, 100% (one hundred percent)
for income tax withheld by other individuals or bodies and 100% (one hundred percent)
for value added tax and sales tax on luxury goods.
Paragraph (4)
In a bid to provide legal certainty for taxpayers with regard to the collection of tax under
a self-assessment system, if in the five-year period as referred to in paragraph (1) as from
the moment when the tax becomes due, expiration of tax period, part of tax year or tax
year, the Director General of Taxation does not issue tax assessment, the amount of tax
payments notified in periodical tax return or annual tax return in principle has become
unchanged and fixed legally pursuant to the provisions of taxation legislation.
Paragraph (5)
In the case of taxpayers being in the course of investigation into criminal offence in the
taxation field, to ascertain the amount of loss inflicted on the state income, tax assessment
has not been issued to the amount of tax due.
In a bid to ascertain that taxpayer really commits taxation offence in the taxation field, it
must be verified by court proceedings that may take more than 5 (five) years.
There is possibility that taxpayer investigated by civil servant investigator is not charged
on the basis of taxation penalty, i.e. a taxpayer sentenced by the court for smuggling,
which in the court verdict shows a quantity of tax objects not yet subject not yet subject
to tax.
In relation thereto, in the framework of recouping the tax due, in the case of taxpayer
being sentenced for committing criminal offence in the taxation or other criminal
offences potential to inflict loss on the state income on the basis of legally fixed court
decision, the issuance of underpaid tax assessment is still justified, plus administrative
sanction in the form of interest as high as 14% (forty eight percent) of the amount of
unpaid or underpaid tax though the five-year period as referred to in paragraph (1)
elapsed.
Paragraph (6)
Sufficiently clear
Point 14
Article 13A
The imposition of penalty constitutes the last resort to enhance compliance of
taxpayers. However, taxpayers violating the provision as referred to in this article
for the first time are not subject to penalty but administrative sanction.
In relation thereto, taxpayers not conveying tax return because of their negligence or
conveying taxpayers with content hereof untrue or incomplete or enclosing information
with content hereof untrue thus being potential to inflict loss on the state income are not
subject to penalty if the taxpayers commit the negligence for the first time. In this case,
the taxpayers are obliged to settle the shortage of tax payments plus administrative
sanction in the form of an increase as much as 200% (two hundred percent) of the
amount of the underpaid tax.
Point 15
Article 14
Paragraph (1)
Sufficiently clear
Paragraph (2)
Under this paragraph, tax collection form has the same legal force as a tax
assessment so that tax can also be collected by a warrant.
Paragraph (3)
This paragraph deals with the imposition of administrative sanction in the
assessment so that tax can also be collection form issued because:
a.
Income Tax is not paid or underpaid in the current year;
b.
Verification of tax return results in underpaid tax because of miswriting and/or
miscalculation.
The following example illustrates the calculation of administrative sanction:
1.
The amount of income tax is not paid or underpaid in the current year.
The amount of Income Tax-article 25 is Rp100.000.000,00 per month in 2008 and
matures on the 15th. Income Tax-article 25 for June 2008 is paid on time with the amount
Rp40.000.000,00.
Due to the shortage of Income Tax-article 25, a tax collection form is issued on
September 2008 with the calculation as follows:
The amount of underpaid Income Tax-article 25 in June 2008
(Rp100.000.000,00 Rp40.000.000,00 =
Rp60.000.000,00
Interest = 3 x 2% x R 60.000.000,00 =
Rp 3.600.000,00 (+)
The amount of tax which must be paid =
Rp63.600.000,00
2.
The results of the verification of tax return
After the verification of the annual income tax return of 2008 submitted on March 31,
2009 has been conducted, it contained miscalculation causing the amount of underpaid
income tax to reach Rp1.000.000,00
Because of the remainder of income tax, a tax collection form is issued on June 12, 2008
with the following calculation:
The reminder of income tax =
Rp1.000.000,00
Interest = 3 x 2% x Rp1.000.000,00 =
Rp 60.000,00 (+)
The amount that must be paid =
Rp1.060.000,00
Paragraph (4)
Taxable entrepreneurs not making tax invoice or making tax invoice but not on time or
filling tax invoice incompletely are subject to administrative sanction in the form of fine
as much as 2% (two percent) of the tax base.
Taxable entrepreneurs making tax invoice but not reporting it punctually are also subject
to the same sanction.
The administrative sanction in the form of a fine as much as 2% (two percent) of the tax
base is collected by a tax collection form, while the tax due is collected by
the tax
assessment as referred to in Article 13.
Paragraph (5)
Sufficiently clear
Paragraph (6)
Sufficiently clear
Point 16
Article 15
Paragraph (1)
In order to accommodate a possibility that an underpaid tax assessment turns out to
be
stipulated lower restitution of tax, which should not deserve to restitution as already
stipulated in overpaid tax assessment has been realized, the Director General of Taxation
has the Authority to issue a additional underpaid tax assessment in a period of 5 (five)
years tax becomes due, the expiration of tax period, part of tax year or tax year.
The additional underpaid tax assessment serves as a correction of the previous tax
assessment. The additional underpaid tax assessment was once issued.
Principally,
audit needs to be executed to issue additional underpaid tax assessment.
If the previous tax assessment is issued on the basis of audit, re- audit needs to be
executed before issuing additional underpaid tax assessment being issued on the basis of
the order information as referred to in Article 13 paragraph (1) letter a, the additional
underpaid tax assessment also must be issued on the basis of audit, but no re-audit.
Therefore additional underpaid tax assessment may not be issued before the issuance of
tax assessment precedes. The additional underpaid tax assessment is issued on condition
that there are new data, including data not yet disclosed previously, which result in
addition to the amount of tax due in the precious tax assessment. In this connection, after
the overpaid tax assessment has been
issued as consequence of the passage of 12
(twelve) month as referred to in Article 17B, the additional underpaid tax assessment is
issued only in the case of new data, including data previously not yet disclosed, being
found. If more new data, including data not yet disclosed previously upon the issuance of
additional
underpaid tax assessment and/or new data, including data not yet
disclosed
previously, which are known later by the Director General of Taxation
are still found, additional underpaid tax assessment still can be issued again.
Referred to as new data are data or information on everything needed to calculate
the amount of tax due that the taxpayer has not notified at the time of the previous
assessment, both in the tax return and its attachments and in the corporate
bookkeeping handed over at the time of audit.
Referred to as data not yet disclosed previously are:
a.
Data, which have not been disclosed by the taxpayer in the tax return and its
attachments (including financial statement); and/or
b.
At the time of audit for the previous assessment, the taxpayer did not disclose
data and/or give other information in a correct, complete and detailed manner so
that tax officers are impossible to apply previous in the taxation legislation
properly in calculating the amount of tax due.
Although the taxpayer has notified data in the tax return or disclosed them at the time of
audit, but notified or disclosed the data in such a way thus making tax officers impossible
to calculate the amount of tax due so that the amount of tax
due is lower that the
actual amount, the data can be categorized as data, which have not disclosed previously.
Example:
1.
In the tax return and/or written financial statement, there is an advertisement cost
amounting to Rp10.000.000,00 while in fact the cost consisted of advertisement
cost amounting Rp5.000.000,00 on the mass media and the rest was donation or
gift, which cannot be charged as cost.
If at the time of previous assessment the taxpayer did no disclose the details thus
making the tax officers unable to correct the expenditure in the form of donation
or gift so that the amount of tax due could not be calculated properly, the data on
the expenditure in the form of donation or gift are categorized as data, which
have not been disclosed previously.
2.
In the tax return and/or financial statement, there were groups of fixes assets in
each of the said groups and likewise, at the time of audit for the purpose of
previous assessment the taxpayer did not disclose the details thus making the tax
officers unable to examine the truth of the said groups e.g. assets should come
into the groups of non buildings tangible assets og Group 3 but are categorized as
group 2. Consequently, the mistake in the classification of the assets is not
corrected thus the tax due cannot be calculated properly. If data certifying that
the classification of the assets is not true are found afterward, the data are
categorized as data not yet disclosed previously.
3.
A taxable entrepreneur buys a number of goods from other taxable entrepreneur

and later the selling taxable entrepreneur issues tax invoices for the purchase.
The goods are partly used for activities directly related to his/her business
activities, such as expenditure on production, distribution, marketing and
management, while the other had no direct link to the business activities. The
whole tax invoices are credited as input tax by the buying taxable entrepreneur.
If at the time of previous assessment, the taxable entrepreneur did not properly
disclose details of the use of goods thus the fiscal officer did not correct the
crediting of the input tax because the amount of value added tax due could not be
calculated properly. If later data or information on mistakes in the crediting of
input taxes having no direct link to the said business activities are known, the
data or information constitute data not yet disclosed previously.
Paragraph (2)
If new data, including data not yet disclosed, which have not been counted as the basis of
stipulation are found after tax assessment is issued, the underpaid tax is collected by
additional underpaid tax assessment plus administrative sanction in the form of a 100% (a
hundred percent) increase from the underpaid tax.
Paragraph (3)
Sufficiently clear
Paragraph (4)
If a taxpayer is sentenced for committing a criminal offence potential to inflict loss on
the state income, in the form of tax based on a legally fixed court verdict,
the
additional underpaid tax assessment still can be issued, supplemented by administrative
sanction in the form of interest as much as 48% (forty-eight
percent) of the amount
of tax, which is not paid or is underpaid, even though the
period of 10 (ten) years
as referred to in paragraph (1) elapsed.
Paragraph (5)
Sufficiently clear
Point 17
Article 16
Paragraph (1)
Pursuant to this paragraph, rectification is executed in the framework of executing
good governance so that human error or mistakes need to be rectified accordingly.
The errors or mistakes must not involve a dispute between tax officers and
taxpayers.
If mistakes or errors are found either by tax officers or based on the application from
the taxpayer, the mistakes or errors must be rectified. Those, which can be rectified
because of mistakes or errors are:
a)
Tax assessment, covering underpaid tax assessment form, additional underpaid
tax assessment, overpaid tax assessment and nil tax assessment;
b)
Tax collection form;
c)
Decision on preliminary restitution of overpaid tax;
d)
Decision on the granting of interest compensation;
e)
f)
g)
h)
i)
j)
Decision on rectification;
Decision on objection;
Decision reduction of administrative sanction;
Decision abolition of administrative sanction;
Decision decision on reduction of tax assessment;
Decision on nullification of tax assessment.
The scope of rectification provided for in this paragraph is limited to mistakes or

errors as a result of:
a)
Miswriting, namely mistakes in writing name, address. Taxpayer code number,
tax assessment number, type of tax, tax period or year, and maturity date;
b)
Miscalculation, namely mistakes in adding and/or reducing and/or multiplying
and/or dividing a number;
c)
Mistakes in applying provisions in taxation legislation, namely mistakes in
applying tariffs, mistakes in applying percentage in the net income calculation
norms, mistakes in applying administrative sanction mistakes in untaxed income,
mistakes in the calculation of income tax in the current year, and mistakes in
crediting taxes.
The definition of rectification referred to herein can mean adding or reducing or writing
off, depending on the nature of mistakes and errors.
If miswriting, miscalculation and/or mistakes in the application of provision in taxation
legislation in the decision on correction are still found, the taxpayer can file
another
application for rectification to the Director General of Taxation, or the Director General
of Taxation can ex officio make such rectification.
Paragraph (2)
In order to give legal certainty, any application filed by a taxpayer for rectification
must be decided in a period of 6 (six) month after the application has been
received.
Paragraph (3)
If after the period of 6 (six) month elapsed but the Director General of Taxation issues a
decision on rectification in accordance with the application filed by the taxpayer.
Paragraph (4)
Sufficiently clear
Point 18
Article 17
Paragraph (1)
Pursuant to this paragraph, overpaid tax assessment is issued to:
a)
income tax if the amount of tax credit is bigger than the amount of tax due;
b)
value added tax if the amount of tax credit is bigger than the amount of tax due.
If tax is collected by collector of value added tax, the amount of tax due is
counted by totaling the output tax, subtracted by tax collected by the collector of
value added tax; or
c)
sales tax on luxury goods if the amount of tax due.
The overpaid tax assessment is issued after tax return conveyed by taxpayer that certifies
underpaid, nil or overpaid, which is not accompanied by application as referred to in article 11
paragraphs (2).
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Point 19
Article 17A
Paragraph (1)
Pursuant to this paragraph, nil tax assessment is issued to:
a)
income tax if the amount of tax credit is the same as the amount of tax due or
there is no tax due or tax credit;
b)
value added tax if the amount of tax credit is the same as than the amount of tax
due or there is no tax due or tax credit. If tax is collected by collector of value
added tax, the amount of tax due is counted by totaling the output tax, subtracted
by tax collected by the collector of value added tax; or
c)
Sales tax on luxury goods if the amount of the paid tax is the same as the amount
of tax due or there is no tax due or tax payment.
Paragraph (2)
Sufficiently clear
Point 20
Article 17B
Paragraph (1)
Referred to as application has been received completely is a the return already filled
completely as referred to in Article 3
Tax assessment issued on the basis of result of audit of application for restitution of
overpaid tax can be in the form of underpaid tax assessment or nil tax
assessment or
overpaid tax assessment
Paragraph (1a)
Referred to as audit of initial evidence is underway us starting from the date of
conveyance of notification about audit of initial evidence to taxpayer,
representative,
proxy, employee or mature family member of the taxpayer.
Paragraph (2)
The deadline as referred to in paragraph (1) is designed to give legal certainty to
application of taxpayer or taxable entrepreneur so that in the case of the deadline already
elapsing and the Director General of Taxation not making any decision, the application
is considered approved. In addition, the deadline is also meant to ensure orderly tax
administration.
Paragraph (3)
If the Director General of Taxation is late in issuing an overpaid tax assessment, the
taxpayer will deserve interest as much as 2% (two percent) per month, calculated as from
the end of the period of time as referred to in paragraph (2) to the issuance date of the
overpaid tax assessment and part of month is rounded up to one month.
Point 21
Article 17C
Paragraph (1)
Application for restitution of the access of tax payment from taxpayers under
certain
criteria, after an audit has been conducted, a decision on preliminary
restitution of overpaid
tax must be issued no later than:
a)
3 (three) month for income tax;
b)
1 (one) month for value added tax;
As from the date of receipt of complete application, in the sense that the tax return has
been filled completely as referred to in Article 3 paragraph (1), paragraph (1a), and
paragraph (6). The application can be filed by filling columns in the tax return or through
a separate latter. Preliminary restitution of overpaid tax can be given after the Director
General of Taxation confirms the truth of tax credit.
Paragraph (2)
Referred to as compliance of the submission of tax return is:
a)
On time in conveying annual income tax return in the last 3 (three) years;
b)
In the last tax year, duration of lateness in conveying periodical tax return for tax
period of January up to November is no more than 3 (three) tax periods for every
type of tax and is not consecutive; and
c)
The periodical tax return, which is late in conveyance as referred to in letter b,

has been conveyed in not later than the deadline of submission of periodical tax
return of the next tax period.
Paragraph (3)
Sufficiently clear
Paragraph (4)
The Director of Taxation can issue tax assessment in a period of 5 (five) years after
auditing the taxpayer already receiving the preliminary restitution of overpaid tax as
referred to in paragraph (1). The tax assessment may be in the form of underpaid tax
assessment or nil tax assessment or overpaid tax assessment.
Paragraph (5)
In order to encourage taxpayers to report the amount of tax due in accordance with the
taxation legislation in force, based on the results of the audit as referred to in paragraph
(4), an underpaid tax assessment form is issued by imposing sanction in the form of a
100% (a hundred percent increase) from the amount of underpaid tax.
The following example illustrates calculation of overpaid tax and the imposition of
administrative sanction in the form of increase.
1)
Income tax
The taxpayer has received preliminary restitution of overpaid tax amounting to
Rp80.000.000,00
The result of audit shows:
Income tax due amounting to
Rp100.000.000
Tax credit, namely:
Income tax Article 22
Rp 20.000.000
Rp 40.000.000
Rp 90.000.000
Based on the audit result, underpaid tax assessment is issued with the following
calculation:
Income tax due amount to
Rp100.000.000
Tax credit:
Rp 20.000.000
Rp 40.000.000
Rp 90.000.000 (+)
The amount of preliminary restitution of overpaid tax
a.
b.
2)
a.
b.
Rp150.000.000
Rp 80.000.000 (-)
The amount of tax that can be credited

Rp 70.000.000 (-)
Unpaid/underpaid tax
Rp30.000.000
Administrative sanction in the form of a 100%
Increase
Rp 30.000.000 (+)
The amount yet to be paid
Rp 60.000.000
Value added tax
A taxation entrepreneur has received preliminary restitution of overpaid tax
amounting to Rp60.000.000.
The result of audit shows :
Output tax Rp100.000.000
Tax credit, namely :
Input tax Rp150.000.000
Based on the audit result, underpaid tax assessment is issued with the following
calculation :
Output tax
Rp100.000.000
Tax credit :
The amount of preliminary restitution of overpaid tax
Rp 60.000.000 (-)
The amount of tax, which can be credited
Rp 90.000.000 (-)
The amount of tax, which is not paid/is underpaid
Rp 10.000.000
Administrative sanction in the form of a 100% increase Rp 10.000.000 (+)
The amount yet to be paid
Rp 20.000.000
Paragraph (6) and (7)

Sufficiently clear
Point 22
Article 17D
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
In a bid to reduce the misuse of the granting of facility to expedite the restitution of
overpaid tax, the director General of Taxation can audit after giving the preliminary
restitution of overpaid tax as referred to in paragraph (1).
Paragraph (5)
In order to motivate taxpayers to report the amount of tax due in accordance with the
provisions of taxation legislation, in the case of underpaid tax assessment being issued
on the basis of result of the audit as referred to paragraph (4), the amount of the
underpaid tax is supplemented by administrative sanction in the form of a 100% (one
hundred percent ) increase of the amount of the underpaid tax.
Article 17E
Sufficiently clear
Point 23
Article 18
Paragraph (1)
Sufficiently clear
Paragraph (2)
Abolished
Point 24
Article 19
Paragraph (1)
This paragraph deals with the imposition of administrative sanction in the form of
interest on the basis of the amount of tax yet to be paid, which is not paid or
underpaid upon the maturity of payment or late in the payment:
Example:
a.
The amount of tax yet to be paid on the basis of underpaid tax assessment issued
on October 7,2008 is Rp 10,000,000 with the deadline of settlement on
November 6,2008. The amount of payment up to November 6, 2008 is Rp
6,000,000.00 On December 1, 2008, tax collection form is issued with the
calculation as follows:
Tax yet to be paid
Paid up to the maturity of settlement
Rp 10,000,000
= Rp 6,000,000 (-)
b.
Underpaid
= Rp 4,000,000
Interest for one month ( 1 x 2% x Rp 4,000,000 ) = Rp
80,000
In the case of in connection with the underpaid tax assessment as referred to in
letter a, the taxpayer pays Rp 10,000,000 on December 5, 2008 and tax
connection form is issued on December 5, 2008, the administrative sanction in
the form of interest is calculated as follows:
Tax yet to be paid
= Rp 10,000,000
Paid after the maturity of settlement
= Rp 10,000,000
Underpaid
= Rp
0
Interest for one month ( 1 x 2% x Rp 10,000,000 )
= Rp
200,000
Paragraph (2)
This paragraph regulates the imposition of administrative sanction in the form of interest
if taxpayer is permitted to say taxes by installments or postpone the
payment of taxes.
Example:
a.
A taxpayer receives an underpaid tax assessment amounting to Rp 1,120,000.00,
which is issued on January 2, 2009. The taxpayer is permitted to pay the tax due
by installments for 5 (five) months with the fixed amount Rp 224,000.00. The
administrative sanction in the form of interest is counted as follows:
First installment
:
2 x Rp 1,120,000.00
= Rp
22,400.00
Second installment
:
2 x Rp 896,000.00
= Rp
17,920.00
Third installment
:
2 x Rp 672,000.00
= Rp
13,440.00
Fourth installment
:
2 x Rp 448,000.00
= Rp
8,960.00
Fifth installment
:
2 x Rp 224,000.00
= Rp
4,480.00
b.
The taxpayer as referred to in letter a is permitted to postpone the payment
of the tax up to June 2000
The administrative sanction in the form of interest on the postponement of
the payment of the underpaid tax assessment is amounting to 5 x 2% x Rp
1,120,000.00 = Rp 112,000.00
Paragraph (3)
Sufficiently clear
Point 25
Article 20
Paragraph (1)
If the amount of tax due is not paid or is underpaid up to the maturity date of
payment or the tax payer does meet installments on the tax payment, the tax will be
collected by a warrant. The collection of tax by warrant is applied to the tax guarantor.
Paragraph (2)
Referred to as instantaneous and lump sum collection is the collection of tax
by tax bailiff to the tax guarantor without having to wait for the maturity date
of
covering all tax due from all types of taxes, tax periods and tax years.
applied
payment,
Paragraph (3)
Sufficiently clear
Point 26
Article 21
Paragraph (1)
This paragraph stipulates the position of the state as a preference creditor, which has
the preemptive right to the tax guarantor goods to be put to a public action.
Payments to other creditors will be made after the tax due has been settled.
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Paragraph (5)
Sufficiently clear
Point 27
Article 22
Paragraph (1)
Moment when tax collection expires needs to be determined to give legal
certainty about when the tax due can no longer be collected.
The tax collection expires in 5 (five) years, counted as from the date of issuance of tax
collection form and tax assessment.
In the case of taxpayer submitting application for rectification, objection, appeal or
review, the expiration of tax collection for 5 ( five) years is counted as from the date
of issuance of decision on rectification, decision on objection, decision on
appeal
or decision on judicial review.
Paragraph (2)
The expiration period of tax collection can exceed 10 (ten) years if:
a.
The Director General of taxation issues and notifies a warrant to the tax
guarantor failing to pay tax due up to the maturity date of payment. In this case,
the expiration period of tax collection is calculated as from the issuance date
notification of warrant.
b.
The tax payers acknowledge tax due by submitting application due before the
maturity date of payment. In this case, the expiration period of tax collection is
calculated as from the date when the Director General of Taxation receives the
application for installments on and deferred payment for the tax debt.
c.
Underpaid tax assessment or additional underpaid tax assessment is issued to
taxpayer because the taxpayer committed criminal offence in the taxation field or
other criminal offences potential to inflict loss on the state income on the basis of
legally fixed court verdict. In this case, the expiration period of tax collection is
counted as from the date of issuance of the tax assessment.
d.
In the case of taxpayer being in the course of investigation into criminal offence
in the taxation field, the expiration period of tax collection is counted as from the
date of issuance of letter of investigation into criminal offence in the taxation

field.
Point 28
Article 23
Paragraph (1)
Abolished
Paragraph (2)
Sufficiently clear
Paragraph (3)
Abolished
Point 29
Article 24
The minister of finance rules procedures for writing off and determining the
amount
of tax claims, which cannot be collected anymore because the taxpayer has
passed
away
and does not have inherited wealth or wealth, the corporate
taxpayer has
already
completed a bankruptcy process, the taxpayer no longer meets qualifications
as a tax subject
and the right to collect the tax claims has
already expired. As such, the balance of tax
claims that can be collected or disbursed can be predicted effectively.
Point 30
Article 25
Paragraph (1)
If the taxpayer views that the amount of losses, the amount of taxes withheld or
collected are not as they are, the taxpayer can file an objection only to the
Direction General of Taxation.
The submitted objection covers an objection to the substance or content of the tax
assessment, namely the amount of losses based of the tax assessment, namely the
amount of losses based on taxation legislation, the amount of taxes withheld or
collected.
The word an referred to herein means that an objection must be filed to a type of
tax and/or a tax year.
Example:
For income tax of tax year 2008 and 2009, the objection must respectively be
submitted in a separate letter of objection. For the two tax years the objection
must
be submitted in two letters of objection.
Paragraph (2)
reasons becoming the basis for calculation mean reasons, which are clear and
accompanied by copies of tax assessment, collection form or withholding form.
Paragraph (3)
The deadline for the filing of an objection is 3 ( three) month as from the sending
date of the tax assessment or tax withholding or collection form as referred to in
paragraph (1) with a view of giving sufficient time to the taxpayer to prepare a letter
of objection and its reasons.
If the taxpayer fails to meet the 3 ( three ) month deadline because of force
majeure, the Director General of Taxation still can consider extending it.
Paragraph (3a)
The provision rules that taxpayer submitting objection is required to settle first taxation
liabilities already approved by the taxpayer upon the closing conference of
audit result. The
settlement must be done before the taxpayer submits objection.
Paragraph (4)
Any application for objection, which fails to meet any of the requirements as
referred
to in this article is not a letter of objection so that it cannot be considered and
decision
on
objection is not issued.
Paragraph (5)
The received of letter already given by the official of the Directorate General of
Taxation or the post office functions as a receipt of the letter of objection if the letter
meets requirements as a letter of objection starts from the receipt date of the said letter.
If the taxpayers letter does not meet requirements as a letter of objection and the
taxpayer improves it in the deadline for submission of objection, the settlement of
the objection starts from the receipt date of the next letter fulfilling the requirements as
a letter of objection.
Paragraph (6)
To enable the taxpayer to prepare an objection with strong reasons, the taxpayer is
given the right to ask for the basis for the imposition, withholding or collection of
taxes already stipulated. In relation thereto, the Director General of Taxation is obliged
to fulfill the request.
Paragraph (7)
This paragraph rules that the maturity of payment mentioned in tax assessment is
deferred up to one month as from the date of issuance of decision on objection. The
postponement of settlement period of taxes causes that the administrative sanction in
the form of interest as much as 2% (two percent) per month as referred to article 19 is
no applied to the amount of taxes not yet paid upon the submission of objection.
Paragraph (8)
Sufficiently ready
Paragraph (9)
In the case of objection of taxpayer being rejected or approve partly and the
taxpayer not submitting application for appeal, the amount of taxes based on the
decision on the objection, subtracted by the amount of taxes already paid before
submitting the objection must be settled in not later that one month as from the date
of issuance of the decision on objection and the collection by warrant will be
implemented unless the taxpayer settles the tax due. In addition, the taxpayer is subject
to administrative sanction in the form of a fine as 50% (fifty percent). The
administrative sanction in the form of a fine as much as 50% (fifty percent) is

imposed if the taxpayer submits application for appeal.
not
Example:
For Tax Year 2008, underpaid tax assessment (SKPKB) with the amount of taxes
yet to be paid Rp 1,000,000,000.00 is issued to PT A. In the closing conference of
audit result, the taxpayer only approves the amount of taxes yet to be paid as much as
Rp 200,000,000.00. The taxpayer settled part of SKPKP, amounting to Rp
200,000,000.00 and later submits objection to other corrections. The Director
General
of Taxation approves part of objection of the taxpayer with the amount of
taxes yet to be
paid as much as Rp 750,000,000.00. In this case, the taxpayer is not
subject
to
the
administrative sanction as regulated in article 19 but is subject to
sanction in accordance
with this paragraph, namely 50% x ( Rp 750,000,000 Rp
200,000,000
)
=
Rp
275,000,000.
Paragraph (10)
Sufficiently clear
Point 31
Article 26
Paragraph (1)
The authority to settle objection submitted by tax paper in the first level is entrusted to
the Director General of Taxation with the provision that the deadline for settlement of
decision on the objection is not later than 12 (twelve) month as from the date of receipt
of the objection.
The stipulation of the deadline for the settlement of objection will not only give legal
certainty to taxpayer but also implement taxation administration.
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
This paragraph requires taxpayer to prove the untruth of tax assessment in the
case
the taxpayer submitting objection to taxes stipulated ex-officio. The ex- officio
tax
assessment is issued because the taxpayer does not convey annual tax
return though
the relevant has been reminded, does not fulfill the obligation to perform bookkeeping
or refuses to provide opportunity for tax auditor to enter certain
places
deemed
necessary in the framework of audit to stipulate the amount
of tax due. Unless the
taxpayer is able to prove the untruth of ex-officio tax
assessment,
the
submitted
objection is denied.
Paragraph (5)
Sufficiently clear
Point 32
Article 26A
Paragraph (1)
Sufficiently clear
Paragraph (2)
In order to provide broader opportunity for taxpayer to obtain justice in the
settlement of his/her objection, the procedures as referred to in this paragraph
rules,
among others, that the taxpayer can be present to testify or obtain
explanation
about his/her objection.
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Point 33
Article (27)
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Paragraph (4a)
Sufficiently clear
Paragraph (5)
Abolished
Paragraph (5a)
This paragraph rules that in the case of taxpayer submitting appeal, the period of
settlement of taxes to which the appeal is submitted, is deferred up to one month as
from the date of issuance of decision on appeal. The postponement of the
settlement period of taxes causes that the administrative sanction in the form of interest
as high as 5% (five percent) per month as regulated in article 19 is not applied to the amount of
taxes not yet paid upon submitting the objection.
Paragraph (5b)
Sufficiently clear
Paragraph (5c)
Sufficiently clear
Paragraph (5d)
In the case of application for appeal from taxpayer being rejected or appeal from
taxpayer being rejected or approved partly, the amount of taxes based on the
decision on appeal, subtracted by the amount of taxes already paid before
submitting the objection must be settled in not later than one month as from the
collection by warrant will be implemented unless the taxpayer settles the tax due.
In addition, the taxpayer is subject to administrative sanction in the form of a fine
as much as 100% (one hundred percent) as referred to in this paragraph.
Example:
For tax year 2008, underpaid tax assessment (SKPKB) with the amount of taxes yet to
be paid Rp 1,000,000,000.00 is issued to PT A. In the closing conference of
audit
result, the taxpayer only approves the amount of taxes yet to be paid as much as Rp
200,000,000.00. The taxpayer settled part of SKPKB amounting to Rp 200,000,000.00
and later submits objection to other corrections. The Director
General of Taxation approves
part of the objection of the taxpayer with the
amount of taxes yet to be paid as much as Rp
750,000,000.00.
Subsequently, the taxpayer submits application tax court decides that the amount
of taxes yet to be paid is Rp 450,000,000.00. In this case, both administrative
sanction in the form of interest as high as 2 % (two percent) per month as
regulated in Article 19 and administrative sanction in the form of a fne as
regulated in Article 25 paragraph (9) are not imposed. But, the taxpayer is subject
to the administrative sanction as regulated in this paragraph, namely 100% x (
450,000,000 Rp 200,000,000 ) = Rp 250,000,000.
Paragraph (6)
Sufficiently clear
Point 34
Article 27A
Paragraph (1)
Interest compensation is given in connection with the decision on objection,
decision on appeal or decision on judicial review in the underpaid tax assessment,
additional underpaid tax assessment, nil tax assessment or overpaid assessment or
supplement to underpaid tax assessment form already paid, which causes overpaid
tax.
Paragraph (1a)
In the case of taxpayer submitting application for rectification, reduction or
nullification of tax assessment or tax collection form whose decision approves partly or
wholly, as long as long as the amount of taxes yet to be paid as meant in tax assessment
or tax collection form already paid, causes overpaid tax, the excess of the
payment is returned plus interest compensation as much as 2% (two percent) per month
for a period of 24 (twenty hour) month at the maximum.
Paragraph (2)
Interest compensation is also given to overpayments in the tax collection form issued
pursuant to article 14 paragraph (4) and Article 19 paragraph (1) in
connection with the
issuance of underpaid tax assessment, granted the reduction
or
abolition
of
administrative sanction in the form of fine or interest.
The said reduction or abolition is a result of the decision on objection or decision on
appeal or decision on judicial review against the underpaid tax assessment or
additional underpaid tax assessment approving the application of taxpayer partly or
wholly.
Paragraph (3
Sufficiently clear
Point 35
Article 28
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Paragraph (5)
The principle consistency is that the principle used in the bookkeeping method is
the same as the previous years, to avoid a shift in profit or losses.
The principle of consistency in the bookkeeping method is for instance in the
application of:
a.
Income accrual system;
b.
Book year;
c.
Inventory method;
d.
Depreciation and amortization method
Accrual system is a method of calculating income and expense in the sense that income
is accrued at the time of being earned and expense is accrued at the time of
becoming due.
So it does not depend on when the income will be received and when the expense will be paid
by cash.
Cash system covers the accrual of income based on the percentage of the job
completed, notably in the construction sector and other method used in certain
business fields such as build, operate and transfer (BOT) and real estate.
Cash system is a method of calculating income and expense based on the income
received and expense paid by cash.
According to this system, income will only be regarded as income if it has been already
received in cash within a certain period of the, and expense will only be regarded as expense if it
has been paid in cash within a certain period of time.
The system is usually used by small enterprises owned by individuals or service

providers, such as transportation companies, amusement centers, and restaurant, in
which the interval between the provision of services and the receipt of payments
is
not to long.
In the pure cash system, income earned from the delivery of goods or the
provision of services is set at the time of receiving from customers, and expenses are
set at the time of paying for goods, services and other operating expenses.
This way, the use of cast system may lead to an obscure calculation of income in that
the amount of income from year to year can be adjusted by controlling cash
inflows
and cash outflows. Hence, the calculation of income tax using a cash
system
must
pay
attention to the following matters:
1)
The calculation of sales within a period of time must cover all sales, either by
cash or not by cash. In calculating cost of goods sold all purchases and stocks
must be included.
2)
In acquiring depreciable assets and amortizable rights, expenses can be deducted
from income only by means of depreciation and amortization.
3)
The use of cash system must be done consistently.
As such, the use of cash system for taxation purposes can also be called a mixed system.
Paragraph (6)
Basically, the adopted bookkeeping method must be used consistently in that they
must be the same as the previous years, for instance, when it comes to the use of the
method of accruing income and expenses (cash or accrual methods), the method
of
fixed asset depreciation, the method of evaluating stocks. After all a change in the
bookkeeping method remains possible, provided that it is approved by the
Director General of Taxation. Any application for a change in the bookkeeping method
must be filed to the Director General of Taxation before the
commencement
of
the
accounting year by providing logical and acceptable
reasons and possible consequences of
the change.
Time change in bookkeeping method will lead to change in the principles of
consistency that may cover a change in method from cash to accrual system or the
other way around or a change in the method of accruing income or expenses
related
to the depreciation of fixed assets using a certain depreciation method.
Example:
In 2008 the taxpayer used a straight line method. If the taxpayer intends to change
the asset depreciation method using a declining balance method in 2009, the tax payer
must secure prior approval from the Director General of Taxation, which is
submitted before the 2009 accounting year by mentioning the reasons for a
change
in the depreciation method and possible consequences of the change.
In addition, a change in the period of the accounting year can also lead to a
change
in the amount of income earned or losses suffered by the taxpayer and therefore, the change
must also secure approval from the Director of Taxation
If the taxpayer uses accounting year, expect if the taxpayer uses an accounting year
which is different from calendar year.
If the taxpayer uses accounting year which is not the same as calendar year, the relevant
tax year must make mention year when, including which includes the
first 6 (six) month or
more.
Example:
a.
Accounting from July 1, 2002 to June 30, 2003, the tax year is 2002.
b.
Accounting from 1 October 1, 2002 to September 30 2003, the tax year is 2003
Paragraph (7)
The definition of bookkeeping has already been ruled in article 1 point 26.
Regulation in this paragraph aims at enabling the counting of the amount of tax due
from the bookkeeping.
Besides income tax, the other taxes also must be countable from the bookkeeping.
To ensure that value added tax and sales tax on luxury goods can be calculated
properly, the bookkeeping must also record acquisition price or import value,
selling
price or export value, selling price of goods subject to sales tax on luxury
goods,
payments for the use of intangible taxable goods from outside the customs
area in the
customs area and /or the use taxable services from outside the customs area in the customs
area, and the amount of creditable and uncreditable input
taxes.
As such, the bookkeeping must be done according to the method and/or system
prevailing in Indonesia, for instance, the financial accounting standard, unless
otherwise stipulated by taxation legislation.
Paragraph (9)
The recording by individual taxpayers engaged in business activity or doing free job
covers gross turnover or revenue and other income revenues, while the recording by
those earning income from outside business activity and free job only cover
gross income,
reduction, and net income, which constitutes an income tax object.
In addition, the recording also covers income that does not constitute a tax object and/or
is not subject to final tax.
Paragraph (10)
Abolished
Paragraph (11)
Books, notes, and documents, including those organized under on-line application
program and the results of electronic data processing serving as the basis for bookkeeping
or recording must be kept fro 10 (ten) years in Indonesia, so that if the Director General
of Taxation is to issue tax assessment, the materials of bookkeeping or recording remain
existent and can immediately be made available. The period of ten (10) years for keeping
books, notes and documents serving as the basis for accounting or recording is in
accordance with the provision ruling the expiration of investigation into criminal offences
in the taxation field. Books, notes and document serving the basis for bookkeeping or
recording and other documents, including those organized under on-line application
program must be kept by observing factors of security, feasibility and reasons ability of
storage.
Paragraph (12)
Sufficiently Clear
Point 36
Article 29
Paragraph (1)
The Director General of Taxation in the framework of supervising compliance to
fulfillment of taxation obligations is authorized to conduct audit to:
a.
assess obedience to fulfill taxation obligation;
b.
achieve other goals in the framework of implementing provisions of taxation
legislation
The audit can be conducted in office (office audit) or in the place of taxpayer
(field audit) whose scope of audit can cover previous years and current year.
The audit map apply to taxpayers, including state agencies and other bodies as tax
withholders or collectors
The audit in the framework of assessing obedience to fulfill taxation obligations is
conducted by tracing the truth of tax return, bookkeeping or recording, and
fulfillment of other taxation obligations in comparison with the actual situation or
business activity of the taxpayer.
In addition, the audit also can be conducted for other purposes, among others:
a.
the granting of taxpayer code number ex-officio;
b.
the granting of taxpayer code number;
c.
the validation or revocation of validation of taxable entrepreneur;
d.
the tax payer raises objection
e.
the collection of substances to formulate Net Income Calculation Form;
f.
the conformance of data and/or information tools;
g.
the stipulation of taxpayers located in remote areas;
h.
the stipulation of any of the places when value added tax becomes due;
i.
the audit in the framework of collecting taxes;
j.
the stipulation of the commencement of production in connection with taxation
facilities; and/or
the fulfillment of request for information from countries being partners of double
taxation avoidance agreement.
Paragraph (2)
The audit is conducted by auditors having clear identity and therefore, the
auditors
must hold auditors identity and have an audit order and show it to the audited taxpayer. The
auditors must explain the purpose of audit to the taxpayer.
The auditors must have attained adequate technical education and have skill as tax
auditors. In performing their duties, the auditors must work honestly, responsibly,
in a full sense of understanding, politely and objectively as well as must refrain
themselves from committing misdeeds.
The opinion and conclusion of auditors must be based on strong and relevant
evidence as well as on the provisions of taxation legislation.
Auditors must foster taxpayers in fulfilling their taxation obligations pursuant to the
provisions of taxation obligation legislation.
Paragraph (3)
The obligations, which must be fulfilled by the audited taxpayers as referred to in
this paragraph are adjusted to the purpose of audit in the framework of either
assessing the obedience to fulfill taxation obligations or other purposes of taxation

legislation.
If a taxpayer performs recording or bookkeeping by using electronic data processing
(EDP), which is organized directly or by other party, the taxpayer must open access to
auditors to access and/or download data from notes, documents and other documents
related to the earned income, business activity, independent job of the taxpayer or object
subject to tax.
Based on this paragraph, the audited taxpayer also has an obligation to provide
opportunity for auditors to enter places or rooms which constitute storage places of
documents, money and/or goods that can give directives regarding the business condition
of the taxpayer and lend and/or audit in the places.
In the case of auditors needing other information other than books, record and other
documents, the taxpayer must provide the other information, which can be in the form of
written and/or verbal information.
The written information is, among others:
a.
Statement that the taxpayer is not audited by public accountant office;
b.
Statement that copy of the lent document is in accordance whit the original one;
c.
Statement regarding the ownership of assets; or
d.
Statement regarding the estimate of living cost
The verbal information is, among others:
a.
Interview regarding the bookkeeping process of the taxpayer;
b.
Interview regarding the production process of the taxpayer;
c.
Interview with management regarding special transaction.
Paragraph (3a)
Sufficiently clear
Paragraph (3b)
Sufficiently clear
Paragraph (4)
To prevent the audited taxpayer from refusing to give up the required bookkeeping,
records, documents as well as other information on the pretext that the taxpayer is bound
to an obligation to keep them secrecy, this paragraph affirms that the obligation is
abolished.
Point 37
Article 29A
The provision aims at providing facilities for taxpayers listing their shares at stock
exchange, namely in the case of the taxpayers being audited, the audit can be realized
through office audit. Under the office audit, the audit will be simpler and faster in the
completion so that the taxpayers are faster to obtain legal certainty, compared to field
audit.
Given that audit can be executed through office audit and the audit period is relatively
brief, the Director General of Taxation through the taxpayer can ask work paper of audit,
which is prepared by public accountant.
Point 38
Article 30
Paragraph (1)
In audit, taxpayers may be found failing to abide by the provision regulated in article 29
paragraph (3) letter b, namely not opening opportunity for auditor to enter places or
rooms deemed necessary and not providing assistance to ensure the smooth
implementation of audit. The condition can be attributable to causes, e.g. the taxpayers
are not in the location or intentionally do not open opportunity for auditors to enter places
or rooms deemed necessary and do not provide assistance for ensuring the smooth
implementation of audit.
Taxpayers not opening opportunity for auditors to enter places, rooms, movable and/or
immovable goods as well as to access electronically managed data or not providing
assistance for ensuring the smooth execution of audit when the audit is underway are
deemed preventing the implementation of audit.
In the case, in a bid to obtain the books, notes and documents which can provide
directives regarding business activities or independent job of the audited taxpayers, it is
deemed necessary to give the authority to the Director General of Taxation, which is
implemented by auditors, to seal the places, rooms and movable/immovable goods.
The sealing is the last resort of auditors to obtain or secure books, notes, documents,
including the electronically managed data and other materials, which can provide
directive regarding business activities or independent job of the audited taxpayers in a bid
to prevent the taxpayers from removing, disappearing, destroying, changing, damaging,
replacing or falsifying them.
The sealing of electronic data is done as long as the action does not discontinue the
smooth operational activity of companies, especially for activities related to public
interest.
Paragraph (2)
Sufficiently clear
Point 39
Article 31
Paragraph (1)
Sufficiently clear
Paragraph (2)
In a bid to provide a better balancing right for taxpayer in responding to findings
resulting from audit, the audit procedures rule, among others, an obligation to convey
notification about audit results to the taxpayers and grant a right to the taxpayer to appear
in closing conference of audit results in the stipulated deadline. In the case of the
taxpayer failing to appear in the stipulated deadline, the audit results are processed in
accordance with the provisions of taxation legislation.
Paragraph (3)
Sufficiently clear
Point 40
Article 32
Paragraph (1)
The law stipulates who becomes representative to exercise the taxation rights and
obligation of taxpayers to a body, body declared bankrupt, body in the process of
dissolution, undivided heritage, immature children or persons under guardianship. It is
necessary to decide who becomes a representative or proxy for the taxpayers on the
grounds that they cannot or are unlikely to take legal action themselves.
Paragraph (2)
This paragraph affirms that the representatives of taxpayers provided for in this law are
responsible for paying for tax due, either individually or collectively.
Exception from this paragraph can be considered by the Director General of Taxation, if
the proxies of taxpayers are able to prove or convince that in their position, on a fit and
proper basis they are unlikely to be held responsible.
Paragraph (3)
This paragraph gives a chance to taxpayers to ask for assistance from other parties who
have a better knowledge of taxation matters as their proxies, for and on behalf of the
taxpayers, to help exercise their taxation rights and obligations.
The assistance covers the execution of formal and material obligation and the fulfillment
of taxpayers rights provided for in the taxation legislation.
The proxy means one receiving special authority from taxpayers to exercise certain
taxation rights and obligation of taxpayers in accordance whit the provisions of taxation
legislation.
Paragraph (3a)
Sufficiently clear
Paragraph (4)
The person who really has the authority in determining policies and/or making decisions
in the framework of running corporate activities, for instance, the authority to sign a
contract with a third party, sign cheques, and the like, although the name of the person is
not included in the executive board contained in the deed of establishment or deed of
amendments or deed of amendments, is categorized executive. The provision in this
paragraph also applies to the board of commissioners and majority or controlling
shareholders.
Point 41
Article 33
Abolished
Point 42
Article 34
Paragraph (1)
Any official, either tax officer or officer performing duties in the taxation field, is banned
from revealing the taxpayers secret pertaining to tax matters, among others
a.
Tax return, financial statement, and other matters reported by the taxpayer;
b.
Data obtained while conducting an audit;
c.
Secret documents and/or data obtained from a third part;
d.
The taxpayers documents and/or secret pursuant to the relevant legislation.
Paragraph (2)
Experts, such as linguist, accountant, lawyer appointed by the Director General of
Taxation to help implement the taxation law are the same as the tax officers also banned
from revealing the taxpayers secret as referred to in paragraph (1).
Paragraph (2a)
Information, which can be notified is identities of taxpayers and general information
about taxation.
Identities of taxpayers cover:
Names of taxpayers;
Taxpayer code numbers;
Addresses of business activities;
Business brand; and/or
Business activities or taxpayers
General information about taxation covers:
.
tax revenue nationwide;
.
tax revenue per Regional Office of the Directorate General of Taxation an/or per
Tax Service Office;
.
tax revenue per type of tax;
.
tax revenue per business field classification;
.
the number of registered taxpayers and/or taxable entrepreneurs;
.
registry of the taxpayer applications;
.
tax arrears nationwide; and/or
.
tax arrears per Regional Office of the Directorate General of Taxation and/or per
Tax Service Office.
Paragraph (3)
In the interest of the state, for instance, in the framework of investigation or indictment,
or cooperation with other government agency, information or written evidence from or
about the taxpayer can be given or shown to a certain party appointed by the Minister of
Finance. The permit issued by the Minister of Finance must mention the name of
taxpayer, the name of the appointed party and the name of official or expert of specialist
permitted to give information or show written evidence from about the taxpayer. The
issuance of such a permit is limited to matters deemed necessary by the Minister of
Finance.
Paragraph (4)
In order to undertake examination in a court session trying a criminal or civil case related
to taxation, for the sake of justice the Minister of Finance must exempt the tax official
and experts as referred to in paragraph (1) and paragraph (2), from the obligation to keep
books, records or documents in secrecy on the basis of a written request from the judge
presiding over the court session.
Paragraph (5)
This paragraph constitutes restriction and affirmation that the requested taxation
information only concerns a criminal or civil case on the act event related to the taxation
sector and is only limited to the relevant suspect.
Point 43
Article 35
Paragraph (1)
In order to implement the provisions of taxation legislation, based on a written request
from the Director General of Taxation, the third party, namely bank, public accountant,
notary, tax consultant, administrative office and other third party having relations to
business activities of taxpayers in the course of tax audit or tax collection or investigation
into criminal offence in the taxation sector must give up the requested information or
evidences.
Paragraph (2)
In the taxation interests, leader of Bank Indonesia on the basis of request from the
Minister of finance is authorized to issue a written order so that bank gives up or shows
written evidences as well as documents related to financial condition of certain depositing
customer to tax official.
Paragraph (3)
Sufficiently clear
Point 44
Article 35A
Paragraph (1)
In the framework of supervising compliance to the fulfillment of taxation obligations as a
consequence of the application of self-assessment system, taxation related data and
information coming from government institutions, institutions, associations and other
parties are badly needed by the Directorate General of Taxation. The data and
information are data and information about individuals or bodies, which can describe
activities or businesses, business turnover, income and/or assets of the individuals or
bodies, including information about costumers of debtors, data about financial
transactions and foreign exchange flow, credit card as well as financial statement and/or
reports on business activities conveyed to other institutions outside the Directorate
General of Taxation.
In the framework of implementing this provision, sources, kinds and procedures for
conveying the data and information to the Directorate General of Taxation are regulated
by a government regulation.
Paragraph (2)
In the case of the taxation-related data and information provided by government agencies,
institutions, associations and other parties being not sufficient yet, in the interest of the
state revenue, the Director General of Taxation can gather taxation-related data and
information in connection with an event, which is predicted to have correlation with the
fulfillment of taxation obligations of taxpayers by paying attention to the provision on
secret of the data and information.
Point 45
Article 36
Paragraph (1)
In the practices, the administrative sanction imposed on taxpayers may be inappropriate
because of in accuracy of tax officer potential to burden innocent taxpayers or not
understanding taxation legislation. In this case, the administrative sanction in the form
of interest, fine and increase already stipulated can be abolished or subtracted by the
Director General of Taxation.
In addition, the Director General ex-officio or on the basis of application from a taxpayer
or underlying the substance of justice, can subtract or nullify untrue tax assessment, for
instance, a taxpayer whose objection is denied because the relevant fails to meet the
formal requirement (submitting letter of objection not on time), although material
requirement is fulfilled.
The Director General of Taxation also can subtract or nullify untrue tax collection form
ex officio or on the basis of an application from taxpayer.
In the framework of providing justice and protecting rights of taxpayers, the Director
General of Taxation based on his/her authority or application from taxpayers can nullify
results of tax audit, which is implemented without conveying letter of notification about
audit results or without closing conference of audit results with the taxpayers.
Nonetheless, in the case of taxpayers being not present in the closing conference of audit
results in accordance with the stipulated deadline, application of the taxpayer cannot be
considered.
Paragraph (1a)
Sufficiently clear
Paragraph (1b)
Sufficiently clear
Paragraph (1c)
Sufficiently clear
Paragraph (1d)
Sufficiently clear
Paragraph (1e)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Point 46
Article 36A
Paragraph (1)
In the framework of securing the state revenue and enhancing professionalism of tax
officer in implementing the provisions of taxation legislation, tax officers intentionally
counting or stipulating tax by ways contravening the law thus inflicting loss on the state
income are subject to sanctions in accordance with the provisions of legislation.
Paragraph (2)
This paragraph rules violation committed by tax officer, for instance, if a tax officer
committed violation in the personnel affairs, the tax officer can be reported because the
relevant has committed violation in the personnel affairs. If a tax officer is deemed
committing crime, the tax officer can be reported because the relevant has committed
crime. In the case of a tax officer committing corruption crime, the relevant also can be
reported for committing corruption crime.
In this context, taxpayers can report the violation committed by the tax officer to internal
unit of the Ministry of Finance.
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Paragraph (5)
Tax officers are deemed executing their tasks on the basis of goodwill unless the tax
officers implement the task to favor themselves, their families, groups and/or other
actions having indication of corruption, collusion and/or nepotism.
Point 47
Article 36B
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Article 36C
Sufficiently clear
Article 36D
Paragraph (1)
Sufficiently clear
Paragraph (2)
The amount of the granted incentive is stipulated through deliberation between the
government with organ of the House of Representatives in charge of financial affairs.
Paragraph (3)
Sufficiently clear
Point 48
Article 37A
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Point 49
Article 38
Any violation of taxation obligations by taxpayers is subject to administrative sanction by
issuing tax assessment or tax collection form as long as the violation is related to tax
administration, and any violation of taxation obligation related to criminal offence in the
taxation field is subject to penalty. The act or action referred to in this article is not
violation of tax administration but a criminal offence in the taxation field.
The penalty is expected to generate consciousness of taxpayers to abide by taxation
obligations provided for in taxation legislation.
The negligence referred to in this article means unintentional, absent-minded, careless, or
ignoring obligations thus the act is potential to inflicts losses on the state income.
Point 50
Article 39
Paragraph (1)
The act or action as referred to in this paragraph, which is committed intentionally is
subject to heavy sanction, given the important role of tax revenue in the state revenue.
Everybody intentionally not registering his / herself, abusing or using unrightfully
taxpayer code number or abusing or using unrightfully validation of taxable entrepreneur
also comes into the act or action.
Paragraph (2)
To prevent criminal offences an the taxation field from re-occuring, anybody committing
another criminal offence in the taxation field in no less than 1 (one) year after serving
part or whole of jail term mated out to him/her, is subject to severer criminal sanction,
namely twice as severe as the penalty provided for in paragraph (1).
Paragraph (3)
The abuse or unrightfully use of taxpayer code number or validation of taxable
entrepreneur or the submission of incorrect or incomplete tax return in the framework of
applying for restitution of tax and/or compensation for tax or untrue tax crediting is very
harmful to the state. Therefore, any attempt to commit the criminal offence is a special
offence.
Point 51
Article 39A
Tax invoice as a proof of tax collection constitutes a very important administrative

instrument in the implementation of provisions on value adder tax. The tax withholding
and collection from also constitutes an instrument to credit or subtract tax due so that
misuse of tax invoice, tax collection form, tax withholding form and/or tax payment form
can bring about negative impact to the success of collection of value added tax and
income tax. In relation there to, the misuse in the form of the issuance and/or use of tax
invoice, tax withholding form, tax collection form and/or tax payment form not based the
actual transaction is subject to penalty.
Point 52
Article 41
Paragraph (1)
To ensure that the secret of taxation will not be made known to other party and prevent
the taxpayer from providing data and information undoubtedly in the framework of
implementing the taxation law, it is necessary to impose penalty on the relevant official
causing the disclosure of the secret.
The disclosure of secret referred to in this paragraph is the result of negligence,
carelessness, or absent-mindedness so that the obligation to keep the secret of
information or evidence owned by the taxpayer protected by the taxation law is violated.
Due to the negligence, the relevant official deserves compatible punishment.
Paragraph (2)
The act or action as referred to in this paragraph, which is committed intentionally, is
subject to severer sanction than sanction against the act or action attributable to
negligence so that the official is more careful to prevent him/herself from disclosing the
secret of taxpayers.
Point 53
Article 41A
To ensure that the third party fulfills the request by the Director General of Taxation as
referred to in Article 35, it is necessary to impose sanction on the third party committing
the act or action as referred to in this article.
Point 54
Article 41B
Anybody committing action to prevent or discourage investigation into criminal offence
in the taxation field, such as preventing investigator to ransack and/or obscuring the
proofs as referred to in this article is liable to penalty.
Point 55
Article 41C
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Point 56
Article 43
Paragraph (1)
Sentenced for committing crime in the taxation field is not limited to taxpayer,
representative of taxpayer, proxy of taxpayer, employee of taxpayer, public account, tax
consultant or other parties but also those ordering to commit the crime, talking part in
committing the crime, advising or helping commit crime in the taxation field.
Paragraph (2)
Sufficiently clear
Point 57
Article 43A
Paragraph (1)
Information, data, report, and complaints received by the Directorate General of
Taxation will be developed and analyzed through intelligence activities or observation
whose results can be processed by audit, audit of initial evidence or is not processed.
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Point 58
Article 44
Paragraph (1)
Certain civil servants within the Directorate General of Taxation, who are appointed as
investigators of criminal offences in the taxation field by the authorized official are
investigators of criminal offences in the taxation field. The investigation into criminal
offences in the taxation field is implemented in accordance with the provisions ruled in
the Criminal Code in force.
Paragraph (2)
In this paragraph, the authority of certain civil servants within the Directorate General of
Taxation, as investigators of criminal offences in the taxation field, including the
authority to confiscate is regulated. The confiscation can be applied to both movable and
immovable goods, including bank account, receivables, and securities belonging the
taxpayers, tax guarantors and/or other parties stipulated as suspects.
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Point 59
Article 44B
Paragraph (1)
In the interests of the state revenue, based on request from the Minister of Finance, the
Attorney General can discontinue investigation into criminal offences in the taxation field
as long the criminal case has not been brought into justice.
Paragraph (2)
Sufficiently clear
Article II
Sufficiently clear
SUPPLEMENT TO THE STATUTE BOOK OF THE REPUBLIC OF INDONESIA NO. 3984

General Provision 2007 Tax Law

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General Provision 2007 Tax Law

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THE THIRD AMENDMENT TO LAW NUMBER 6 YEAR 1983 REGARDING

TAXATION GENERAL PROVISIONS AND PROCEDURES

39. Decision on Granting of Interest Compensation shall be a decision determining the

a. Application for abolition of taxpayer code number is submitted by taxpayer and/or

4. The provision of Article 3 shall be amended so as to read as follows:

whose technical procedures are regulated by or on the basis of a regulation of the

assessment as referred to in Article 17 paragraph (1), or as from the date of issuance of

e. Taxpayer is provided ex-officio with taxpayer code number and/or validated as

18. The provision of Article 17 shall be amended so as to read as follows:

regulation of the Minister of Finance

a. in the case of underpaid tax assessment and additional underpaid tax

c. provide other necessary information.

If in disclosing bookkeeping, record or documents and information request, the

41. The provision of Article 22 shall be abolished.

Anybody who pursuant to Article 35 of this law is required to provide information or

Payment or settlement of tax made by the taxable entrepreneurs themselves

A taxable entrepreneur buys a number of goods from other taxable entrepreneur

The scope of rectification provided for in this paragraph is limited to mistakes or

The periodical tax return, which is late in conveyance as referred to in letter b,

The amount of preliminary restitution of overpaid tax

The amount of tax that can be credited

Paragraph (6) and (7)

date of issuance of letter of investigation into criminal offence in the taxation

administrative sanction in the form of a fine as much as 50% (fifty percent) is

The system is usually used by small enterprises owned by individuals or service

assessing the obedience to fulfill taxation obligations or other purposes of taxation

Tax invoice as a proof of tax collection constitutes a very important administrative

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