Indonesia tax update: acceleration of tax refunds for individual taxpayers
Endy Arya Yoga and Arip Prastyo Wibowo of GNV Consulting Services deliver a broad Indonesian tax update, with news on stamp duty procedures and an e-Tax Court.
The Director General of Taxes has issued regulation No. PER-5/PJ/2023 concerning the acceleration of tax refunds. This regulation became effective on May 9 2023.
Qualified individual taxpayers who have submitted annual income tax returns with a maximum overpayment amount of IDR 100,000,000 and are requesting a refund under Article 17B or 17D of the General Tax Provisions Law may be granted a preliminary refund.
If the Director General of Taxes audits a taxpayer who has received a preliminary refund and issues an underpaid tax assessment, the taxpayer will only receive an administrative sanction in the form of interest under Article 13 of the Law on General Provisions and Tax Procedures instead of an increment penalty of 100%.
Procedure for collection of stamp duty in cases of electronic stamp system failures
The Director General of Taxes has issued regulation No. PER-2/PJ/2023 as an amendment of PER-26/PJ/2021, concerning the procedure for collecting stamp duty in cases of electronic stamp system failures.
The following amendments have been made to Article 3, paragraphs (2) and (3) of PER-26/PJ/2021:
Definition of "failure” in electronic systems
The electronic system cannot be accessed and/or respond to the process of affixing electronic stamps either through the portal or the integrated system.
According to a notification from the Money-printing Public Corporation of the Republic of Indonesia (Perum Peruri), the electronic stamp system cannot be accessed, does not respond to the process of affixing electronic stamps, and/or electronic stamps cannot be attached to a certain kind of electronic document; or
The process of integration with the electronic system requires adjustment to be able to affix electronic revenue stamps.
Period of failure
Failure of the electronic stamp system is allowed within a maximum period of one year effective from the time of designation as a stamp duty collector.
Failure of the electronic stamp system is allowed within a maximum period of six months from the time of designation as a stamp duty collector.
Furthermore, the stamp duty collector may extend the period of system integration for a maximum of three months from the six-month deadline mentioned above, by submitting a request to the Director General of Tax before the period ends and stating reasons.
Supreme Court Regulation Number 1 of 2019 was issued as a legal basis for holding hearings electronically. The implementation of electronic hearings at the Tax Court is decided by the Chief Judge of the Tax Court.
On May 11 2023, the Tax Court secretariat held an outreach session regarding the e-Tax Court for the purpose of achieving electronic-based justice. This suggests that the Tax Court will soon conduct hearings entirely online.
The e-Tax Court is an information system used to administer tax disputes electronically through:
A series of tax dispute registration processes (e-registration);
Receipt of appeal letters/lawsuit letters/appeal description letters/response letters/rebuttal letters;
Letters of declaration of revocation of a tax dispute;
Determination of panel/Single Judge;
Submission of notifications/subpoenas; and
Management, submission, and storage of documents.
The benefits of using e-Tax Court are as follows:
The dispute file is recorded in the e-Tax Court system and is accessible to the parties;
It is an integrated system that tracks the process of dispute resolution from the filing of appeals/lawsuits to conclusion;
Cost effectiveness for all parties;
Documents can be submitted and meetings can be held electronically;
Appeals/lawsuits can be filed at any time and from any location; and
Document transfer is quicker.
Taxpayers, the Directorate General of Taxes, the Directorate General of Customs and Excise, and others can use the e-Tax Court.
The following features are included in the e-Tax Court:
e-Registration: the process of registering parties online;
e-Filing: online filing of an appeal/lawsuit;
e-Litigation: supports online trials (schedule, trial notification, and others);
e-Decision: decisions are delivered online; and
Dashboard: displays real-time disagreement information to the parties.
More information on the implementation of the e-Tax Court will be revealed in the near future.