Given that taxation is the primary source of revenue for the Indonesian government, the administration has been actively implementing measures to enhance legal certainty in taxation. One such initiative is the issuance of Minister of Finance Regulation No. 17 of 2025 (“PMK 17/2025”). This regulation was promulgated to ensure legal certainty and safeguard the interests of taxpayers while safeguarding the state’s revenue interests. Effective from February 25, 2025, PMK 17/2025 supersedes PMK No. 55/PMK.03/2016, which previously governed the procedures for terminating tax crime investigations and Article 108 of Minister of Finance No. 18/PMK.03/2021.
PMK 17/2025 provides comprehensive guidelines for the investigation of tax crimes, ensuring legal protection for taxpayers while upholding the state’s right to collect tax revenue. This publication will elucidate several key regulations under PMK 17/2025.
1. Scope of Tax Crime Investigation
Tax crime investigations can only be conducted by Civil Servant Investigators assigned to the Directorate General of Taxation based on an Investigation Order issued under an Incident Report. The Incident Report may originate from:
- Preliminary Evidence Examination;
- Directly Discovered Criminal Acts;
- Investigation Development.
The scope of investigation includes summons, examination, arrest, detention, search, asset blocking and/or seizure, handling of electronic data, prevention, suspect determination, case file preparation, transfer of case files, transfer of responsibility over suspects and evidence, and termination of investigation.
2. Investigators’ Authority in Tax Crimes
Tax crime investigators are granted several key powers, including:
- Summons and Examination
Investigators can summon witnesses, experts, or suspects for questioning. If a suspect fails to appear without a valid reason, a second summons may be issued, potentially with police assistance to ensure the suspect’s presence.
- Arrest and Detention
Arrests can only be made if a suspect is likely to flee, destroy evidence, or repeat the offense. Detention requires approval from the police and is only applicable for tax crimes carrying a minimum penalty of five years.
- Search and Seizure
Investigators have the authority to conduct searches on residences, individuals, or objects related to tax crimes. A search warrant and approval from the local District Court Chief Judge are required unless in urgent situations. Investigators may also seize assets or evidence with a court-approved seizure warrant.
- Asset Blocking and Travel Restrictions
To secure evidence or guarantee state revenue recovery, investigators can freeze bank accounts, land, vehicles, or other assets in collaboration with relevant institutions such as the National Land Agency and banks. Additionally, investigators can request the Minister of Finance to impose a travel ban on suspects, valid for up to six months and extendable once.
3. Termination of Investigation for State Revenue Interests
The regulation also allows for the termination of investigations if the suspect or taxpayer fully settles state losses and administrative fines. This termination is initiated by a request from the Minister of Finance to the Attorney General.
The primary requirement for termination is the full payment of state losses and administrative sanctions, as outlined below:
- A fine equal to the state loss for violations under Article 38 of the General Tax Provisions and Procedures Law (“Law 28/2007”);
- A fine three times the state loss for violations under Article 39 of Law 28/2007;
- A fine four times the unpaid tax amount for violations under Article 39A of Law 28/2007.
If payment is made before the case is brought to court, the Minister of Finance may request investigation termination. However, if the case has entered the prosecution stage, the final decision rests with the Attorney General’s Office and the court.
4. Cross-Border Tax Crime Investigations
For tax crimes involving international transactions or assets stored overseas, investigations can be conducted through Mutual Legal Assistance in Criminal Matters with other countries. This cooperation includes summoning witnesses, seizing overseas assets, and, when applicable, extraditing offenders under international law.
5. Delivery of Documents
Inline with the regulations concerning coretax, the delivery of (a) requests and documents by the taxpayers/suspect, and (b) issuance or delivery of the decision and documents from the Directorate General of Taxation, will be conducted in accordance with the coretax regulations.
5. Transitional Provisions
PMK 17/2025 regulates that the settlement payments for investigations termination request which has been submitted but awaiting response must be responded within one month after the effective date of this PMK.
Conclusion
PMK 17/2025 enhances the previous regulations concerning tax crime investigations. As the regulation aims to strike a balance between legal certainty for taxpayers and the government’s commitment to enforcing tax laws and improving compliance, it also incorporates numerous modifications to ensure alignment with other recently implemented regulations, including the revisions pertaining to the coretax system.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
