Indonesian government has been issuing new regulations to improve tax audit findings by scrutinizing various concrete data for its further analysis. As a continuation of revamping tax audit strategy set forth in the recent MoF Regulation 15/2025 which has been effective as of 14 February 2025, the Director General of Taxes Regulation issued Per-18/PJ/2025 on the Follow-up on Concrete Data (“tax authority Regulation 18/2025”), which serves as the implementing regulation of MoF Regulation 15/2025.
As the MoF Regulation 15/2025 has only merely laid the general framework for what constitutes as “concrete data” – leaving a large room of interpretation for Taxpayers and officials alike during the audit procedure, which at times, may even be detrimental due to its subjectivity, the tax authority provides further clarification by issuing Regulation 18/2025. This offers more elaboration on “concrete data”, which allows for a more objective approach during its examinations. Concrete data encompasses information obtained or owned by the tax authority in the form of: (i) tax invoices that have been approved through the tax authority information system, which has not been or are not reported by the Taxpayer in the Value-Added Tax Periodic Notification Letter (Surat Pemberitahuan Masa Pajak Pertambahan Nilai); (ii) withholding or collection proof of Income Tax that has not been or is not reported by the issuer of said proof within the Periodic Income Tax Notification Letter (Surat Pemberitahuan Masa Pajak Penghasilan); and/or (iii) proof of transactions or tax data that can be used to calculate the Taxpayer’s tax obligations.
While MoF Regulation 15/2025 does not provide further elaboration on what consists as proof of transactions or tax data that can be used to calculate the Taxpayer’s tax obligations, tax authority Regulation 18/2025 elaborates that the following can be classified as proof of transactions or tax data that can be used to calculate the Taxpayer’s tax obligations:
- Excessive tax refund in the Value Added Tax Periodic Notification Letter that is not supported by an overpayment in the previous Value Added Tax Periodic Notification Letter;
- recalculation of input tax as a deduction from output tax by a Taxpayer who is not entitled to use the input tax crediting guidelines for taxable entrepreneurs conducting both taxable and non-taxable delivery;
- Prepaid Value Added Tax that are not paid or is underpaid;
- application of tax incentives that is not in accordance with the regulations;
- Crediting of input tax that is not in accordance with the regulations;
- Income that is not reported or underreported based on withholding tax data held by the tax authority and/or errors related to the use of the net income calculation norms;
- Data and/or information originating from tax assessments and/or decisions in the field of taxation and/or final and binding rulings on disputes concerning the application of tax laws and regulations, which can be directly used to calculate tax obligations that were not reported or is underreported by the taxpayer in their tax return;
- Data and/or information for which:
- a request for clarification has been issued; and
- a minutes of clarification request have been prepared containing the Taxpayers agreement to fulfil their tax obligations and signed by the Taxpayer, the Taxpayer’s representative, or their attorney, but the fulfilment of such tax obligations has not been carried out or has not been completed within the time limit agreed upon by the Taxpayer,
which may be used to calculate the taxation obligation of the Taxpayer.
The tax authority may identify discrepancies over reported and actual taxable events under a more objective evidence-based system. This would encourage Taxpayers to stay in compliance with the prevailing laws and regulation.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
