The Ministry of Finance of Republic of Indonesia has taken a significant step in reforming tax supervision by elevating the regulation of the Letter Requesting Explanation of Data and/or Information (Surat Permintaan Penjelasan atas Data dan/atau Keterangan or “SP2DK”) from an internal regulation to a formal Ministerial Regulation. This policy shift was formalized through Minister of Finance Regulation No. 111 of 2025 on Taxpayer Compliance Supervision (“Regulation 111/2025”), replacing the previous framework under Director General of Taxes Circular Letter No. SE-05/PJ/2022 on Taxpayer Compliance Supervision.
By upgrading the legal basis of SP2DK to the level of a Ministerial Regulation, the Government has shifted its normative status. Circular Letters (Surat Edaran or SE) are internal policy guidelines of the institution and do not constitute formal legislation within Indonesia’s hierarchy of laws and regulations. As a result, their application may vary across regions and tax offices, potentially creating inconsistent treatment among taxpayers. Regulation 111/2025 addresses this issue by placing SP2DK within a formal regulatory framework that applies uniformly across all DGT units.
One of the core objectives of Regulation 111/2025 is to ensure legal certainty—both for tax officials implementing supervision and for taxpayers responding to SP2DK requests. Regulation 111/2025 emphasizes the function of SP2DK as instrument to request explanations concerning data and/or information in the context of compliance monitoring. Thus, a regulation at the ministerial level provides clearer authority, clearer procedural standards, and stronger accountability compared to internal administrative guidance.
Scope and Authority
Regulation 111/2025 provides that tax supervision is conducted by authorized tax officials based on the results of data and information analysis available within the DGT’s system. Under Regulation 111/2025, tax supervision is structured into three distinct categories, namely: (i) supervision over registered taxpayers, focusing on the consistency between reported tax positions and available data; (ii) supervision over unregistered taxpayers, particularly where economic activities indicate the existence of tax obligations that have not yet been formalized – this means that the DGT may issue SP2DK to any person based on information available in the system; (iii) territorial or regional supervision, which targets economic activities within a specific jurisdiction to identify taxpayers and assess overall compliance.
In carrying out these forms of supervision, Regulation 111/2025 grants the DGT a comprehensive set of powers. These include the authority to request explanations concerning taxpayer data and information, engage in discussions with taxpayers, and formally summon taxpayers to attend meetings either in person or through electronic platforms. The DGT may also conduct site visits, issue compliance reminders and formal warnings, and collect economic data relevant to the supervision of its territorial jurisdiction.
The regulation also authorizes the DGT to request transfer pricing documentation relating to the application of the arm’s length principle in transactions influenced by special relationships. This provision reflects increased scrutiny over related-party transactions and aligns domestic supervisory practices with international tax standard.
In addition, the DGT may issue formal correspondence in the context of supervision and carry out other supervisory actions as permitted under prevailing tax laws and regulations.
Supporting Activities in Tax Supervision
Regulation 111/2025 further recognizes that effective supervision may require supporting activities beyond direct engagement with taxpayers. These supporting measures include proposing tax valuations for fiscal purposes, conducting internal discussions within the DGT involving units deemed relevant—where necessary, together with the taxpayer—and requesting data or information from third parties. The regulation also allows tax officials to perform other supervisory activities in accordance with their official assignments, provided such actions remain within the scope of applicable tax regulations.
Implication for Taxpayers
For taxpayers, the formalization of SP2DK regulation carries both challenges and protections. On one hand, SP2DK is now firmly established as a legally grounded supervisory mechanism, meaning taxpayers should expect more consistent and structured requests for clarification. On the other hand, the clearer legal framework also strengthens taxpayers’ position in understanding their procedural rights, obligations, and the limits of tax authority actions.
First, taxpayers are required to respond to requests for explanation concerning data and/or information, as well as any formal tax compliance reminders issued by the DGT, within the prescribed timeframe. Second, taxpayers are obliged to attend meetings or clarification sessions when summoned by the DGT. These meetings may be conducted either in person at the tax office or through electronic or virtual means. Third, taxpayers are required to grant access for on-site visits conducted by the DGT as part of the supervision process.
Regulation 111/2025 also regulates the rights of taxpayers and the procedures for responding to supervisory actions. Under the regulation, taxpayers are entitled to provide responses to SP2DK and compliance reminders issued by the DGT through a structured mechanism, namely: (i) fulfilling their tax obligations; and/or (ii) providing explanations regarding their tax obligations, supported by relevant documentation or evidence. Consequently, receipt of an SP2DK or a compliance reminder by a taxpayer does not automatically require immediate payment. Taxpayers who have fulfilled their obligations or possess legitimate clarifications may submit written explanations and supporting documents to substantiate their position. This provision emphasizes procedural fairness and ensures that taxpayers have an opportunity to clarify matters before any enforcement action is initiated.
Furthermore, Regulation 111/2025 provides taxpayers with the right to request an extension of the response period. The regulation stipulates that the standard response period is 14 (fourteen) calendar days from the date of issuance or delivery of the SP2DK (as applicable). However, taxpayers may submit a written request for an extension to the tax office that issued the SP2DK, which may be granted for a maximum period of 7 (seven) calendar days. The extension request must be received by the relevant tax office before the original response period expires.
Author’s Remarks
Regulation 111/2025 reshapes the interaction between the tax authority and taxpayers by formalizing the examination process within a clear procedural and legal framework. Taxpayers have clear rights to respond, explain their position, and ask for extension, so the supervision process is fair and predictable. At the same time, the tax authority’s powers are clearly set out, ensuring supervision is carried out in a consistent manner across all tax offices. As a result, both parties are expected to operate under transparent, predictable, and legally grounded standards in the tax supervision process.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
maser@metalaw.id
