The Supreme Court has issued Regulation of the Supreme Court of the Republic of Indonesia Number 3 of 2025 concerning Guidelines for Handling Criminal Cases in the Field of Taxation (“SC Regulation No. 3/2025”), considering that there are no provisions regarding the procedures for handling criminal cases in the field of taxation, resulting in differences in interpretation and application of the handling of criminal cases in the field of taxation in court. This regulation does not change the existing regulations regarding the handling of criminal cases in the field of taxation, but rather serves as an implementing regulation or guideline for judges, in order to increase the effectiveness, synergy, and optimization of the recovery of losses in state revenue.
Payment and settlement of tax related obligations
Previously, it has been regulated under Article 2 Minister of Finance Regulation No. 17 of 2025 concerning Investigation of Criminal Acts in the Field of Taxation (“MOF No. 17/2025”) promulgated on 25 February 2025 regulates that for the benefit of state revenue, tax crime investigations may be terminated if certain conditions are met. Under Article 44B Law No. 6 of 1983 on General Provisions and Tax Procedures as amended from time to time (“KUP Law”), a tax crime investigation maybe terminated by way of payment of:
- losses to state revenues as referred to Article 38 plus an administrative penalty in the form of a fine of 1 (one) time the losses to state revenues;
- losses to state revenues as referred to Article 39 plus an administrative penalty in the form of a fine of 3 (three) times the losses to state revenues;
- the amount of taxes in the tax invoice, withholding receipt and/or tax payment slip as referred to in Article 39A plus an administrative penalty in the form of a fine of 4 (four) times the amount of taxes in the tax invoice, withholding receipt and/or tax payment slip.
(hereinafter referred to as “Payment”). Additionally, article 2 Prosecutor’s Regulation No. 5 of 2024 on Procedures for Terminating Investigations into Criminal Acts in the Excise Sector for the Interest of State Revenue allows termination of investigation after the taxpayer pays an administrative fine of 4 times the excise value.
Article 13 SC Regulation No. 3/2025 emphasizes such rights. Payment may be conducted during:
- the investigation;
- after the case is transferred to court, prior to the indictment; and
- after the indictment, prior to the verdict.
Payment during the investigation – Article 13(2) of SC Regulation No. 3/2025 provides that any Payment made during the investigation process must be carried out in accordance with the applicable tax regulations.
Pursuant to Article 22 of MOF Regulation No. 17/2025, the investigation of a taxpayer may be terminated through Payment, provided that responsibility for the case and the evidence have not yet been transferred to the public prosecutor. After the Payment is made, together with a request for termination that, inter alia, contains an admission of guilt, the Directorate General of Taxes (DGT) will examine the request and submit a written recommendation to the Minister. The Minister will then forward a request for termination of the investigation to the Attorney General. The Attorney General must issue a decision on the request within a maximum of six months from the date of the request letter. Upon approval, the Minister will issue a notification letter, and the investigation against the taxpayer will be terminated.
Payment after the case is transferred to court, prior the indictment – Article 13(2) of SC Regulation No. 3/2025 provides that any Payment made after a case has been transferred to the court, but prior to the filing of the indictment, must be carried out in accordance with the applicable tax regulations.
As stipulated in the amended Article 44B of the KUP Law under Law No. 7 of 2021 on the Harmonization of Tax Regulations, promulgated on 29 October 2021, once a criminal tax case has been transferred to the court, the Taxpayer may still conduct Payment. However, such Payment can no longer result in the termination of the investigation and may only be taken into consideration for prosecution without the imposition of imprisonment.
Payment after the indictment, prior to the verdict – Article 14 of SC Regulation No. 3/2025 governs Payments made at this stage of the proceedings. In its decision, the judge will declare the Taxpayer guilty, with the following consequences:
- Individuals: found guilty without a sentence of imprisonment, but still subject to a fine calculated based on the principal amount and the administrative sanctions already paid.
- Corporations: found guilty and subject to a fine calculated based on the principal amount and the administrative sanctions already paid.
In addition, Article 16 of SC Regulation No. 3/2025 provides that such Payment serves as a consideration for the judge in determining the length of imprisonment and the amount of the fine.
Taxpayer’s Failure to Appear at Trial
Following the amendment of the KUP Law under Law No. 7 of 2021 on the Harmonization of Tax Regulations, which came into effect on 29 October 2021, Article 44D of the KUP Law provides that a case may be examined and decided by the court even in the absence of the Taxpayer, where the Taxpayer has been duly summoned but fails to appear without a valid reason. Once the Taxpayer presents at the hearing before the verdict is made, the Taxpayer must be examined, and all testimonies of witnesses and letters which are read out in the previous trial shall be considered said in the trial.
Article 19 of SC Regulation No. 3/2025 further reinforces this approach and sets out the procedural mechanism for situations in which the Taxpayer is absent. If the Taxpayer does not attend the hearing, the judge shall not permit the presence of legal counsel or other parties to appear on the Taxpayer’s behalf. Hence, any decision made in the Taxpayer’s absence must be notified to the Taxpayer or their family at their address and/or announced by the public prosecutor through the court’s notice board or website, as well as at relevant local government offices.
Seizure / Forfeiteure of Assets
Articles 10–12 of SC Regulation No. 3/2025 govern the freezing and seizure / forfeiture of assets in the context of evidentiary purposes and the recovery of losses to state revenue.
Pursuant to Article 10 SC Regulation No. 3/2025, investigators may freeze assets by submitting a request to the institution or party responsible for the administration of such assets, for the purposes of proving a criminal offense and/or recovering losses to state revenue.
The regulation distinguishes between two types of seizure:
- Seizure of books, records, and other documents, as well as other evidence suspected to be related to tax crime
This type of seizure is conducted for evidentiary purposes. Under Article 11 SC Regulation No. 3/2025, such seizure may be carried out with the approval of the head of the relevant district court. The request for approval must be accompanied by an incident report, an investigation warrant, a notification of the commencement of the investigation, and a progress report of investigation. It does not require a suspect to be determined beforehand.
In urgent circumstances where immediate action is required and prior approval cannot be obtained, investigators may seize only movable property without prior court approval, provided that the seizure is promptly reported to the head of the relevant district court for approval. In such cases, the report is not required to include an investigation progress report, but must be accompanied by a seizure order, a seizure report, and a receipt for the seized evidence.
- Seizure of movable and/or immovable property belonging to the suspect
This category includes, but is not limited to, bank accounts, receivables, securities, and other assets of the suspect. Under Article 12 SC Regulation No. 3/2025, such seizure is carried out for the purpose of recovering losses to state revenue and may only be undertaken after a suspect has been determined. The seizure must be conducted with the approval of the head of the competent district court. The request for approval must be accompanied by an incident report, an investigation warrant, a notification of the commencement of the investigation, a seizure order, a seizure report, and a receipt for the seized evidence.
In urgent circumstances where immediate action is required and prior approval cannot be obtained, investigators may seize only movable property without prior court approval, provided that the seizure is promptly reported to the head of the relevant district court for approval.
Conclusion
This Regulation shall enter into force on December 23, 2025 thus will not be applicable to any cases which have examined in the court. This Regulation serves to clarify procedural legal provisions, among other things: (a) provisions governing the handling of cases where Payments are made following an investigation, (b) proceedings in cases where the Taxpayer/taxpayer fail to appear at trial, and (c) seizure or forfeiteure of assets.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
