On 31 December 2025, the Indonesian tax authority (“DGT”) has issued Regulation of the Director General of Taxes No. PER-26/PJ/2025 on the Procedure for Seizure and Sale of Securities in the Form of Shares Traded in the Capital Market for Tax Collection Purposes (“Regulation 26/2025”). This regulation serves as the implementing regulation of provisions under Article 23 (4) (e) of Minister of Finance Regulation No. 61 of 2023, which allows the State to enforce tax collection through seizure and sale of taxpayers’ assets, including shares traded in capital market. DGT Regulation 26/2025 specifically addresses the enforcement gap that has existed in how tax debts may be collected from assets held in the Indonesian capital market system.
Prior to the enactment of Regulation 26/2025, shares could be seized, but there were no clear, standard procedures applicable towards the tax office, Financial Services Authority (Otoritas Jasa Keuangan or “OJK”), Indonesia Central Securities Depository (Kustodian Sentral Efek Indonesia or “KSEI”), custodian banks, and securities-brokers. The regulation establishes clear procedures for identification, blocking, seizure, and transfer of shares and settlement of tax debts using publicly traded shares.
Mechanism of Enforcement
- Identification and Information Request
Before conducting any coercive action, the DGT may request information from KSEI to identify the taxpayer’s assets. This includes: (i) the taxpayer’s Single Investor Identification (SID), (ii) the securities sub-accounts, (iii) the type, code, and number of shares held, (iv) the securities broker managing the accounts, (v) customer fund accounts, and (vi) the banks administering customer’s fund. Importantly, the scope also covers proceeds from corporate actions such as dividends or rights issues.
- Blocking of Shares and Funds
Once sufficient account information has been obtained and a seizure order exists, the next step is blocking of shares and funds. The DGT may request the blocking of shares in securities sub-accounts through coordination with OJK and KSEI, and the blocking of cash balances in customer fund accounts through custodian banks. Blocking serves as a protective mechanism to prevent any transfer, sale, pledge, or modification of the assets while the enforcement process is ongoing.
To document the implementation of the blocking, KSEI and/or the custodian bank shall draw up official Blocking Minutes and submit such Blocking Minutes to the OJK, the tax authority, and the relevant taxpayer concerned.
- Seizure
If the taxpayer still does not settle the outstanding tax debt, the enforcement escalates into formal seizure (sita) carried out by a tax bailiff (Jurusita Pajak). The bailiff conducts seizure over the blocked shares and/or funds and documents the action in a formal Minutes of Seizure signed by the bailiff, the taxpayer, witnesses, and representatives of KSEI, and the custodian bank. At this stage, the legal character of the asset changes. Although ownership is not yet extinguished, control over the shares is transferred into the custody of the State for enforcement purposes.
- Sale of Shares through the Stock Exchange
If the taxpayer fails to pay its tax debts within 14 (fourteen) days after seizure, the tax authority is authorized to: (i) proceed with selling the shares to repay the tax debts; and/or (ii) transfer-book the balance of assets stored in the taxpayer’s securities sub-account into DGT’s securities sub-account. To implement the sale, a securities broker is instructed to execute the sale through the stock exchange.
The regulation introduces certain safeguards, including that the sale price must be at least equal to the market opening price and that the DGT determines the sale window and quantity. Securities-broker fees, taxes, and administrative costs are deducted from the proceeds. Unlike traditional auctions of physical assets, sale of shares under this regulation occurs directly in the stock exchange, making enforcement faster and aligned with market mechanisms.
- Settlement
Following the sale of shares, the process moves into settlement. The sale proceeds are credited to the DGT’s accounts. Any and all costs incurred in connection with the share sale process, including transfer costs, brokerage fees, taxes, custody, and/or administrative expenses, shall be accounted for and offset against the proceeds of such share sale. If the transfer of shares generates excess value beyond the tax liability and collection costs, the DGT is required to return the surplus funds or remaining shares to the taxpayer.
Implications for Stakeholders
From the perspective of investors, Regulation 26/2025 significantly expands the real enforcement risk for taxpayers holding marketable securities. Capital market portfolios are no longer “safe” from tax enforcement but are now fully operational objects of collection, as the regulation integrates tax enforcement directly into the infrastructure of the capital market. In addition, the regulation also increases transparency between DGT, OJK, KSEI, securities-broker, and custodian bank – allowing them to cooperate in providing data and executing the enforcement. Further, forced sale of shares may occur without considering best timing, potentially during volatile market conditions or when large sales push prices down. From commercial perspective, tax enforcement is no longer merely a legal compliance issue but also a portfolio value risk, as it creates a risk to investment value.
The seizure and sale of shares may affect voting rights composition, ownership structure, financing arrangements, and public disclosure obligations. Changes in significant shareholdings triggered by tax enforcement may also intersect with capital market obligations such as reporting and corporate control.
Conclusion
Regulation 26/2025 marks a significant development in Indonesian tax enforcement by integrating the capital market ecosystem into the collection framework. The tax authority now has a clear operational mechanism to block, seize, and liquidate listed shares to recover unpaid tax debts.
In light of Regulation 26/2025, taxpayers with investments in publicly traded shares should observe its compliance and begin viewing tax risk alongside portfolio risk in order to avoid forced liquidation and business disruption. Early engagement with the tax authority should be considered to prevent escalation from administrative compliance into coercive market liquidation.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
maser@metalaw.id
