Indonesia tax update: depreciating tangible assets and electronic tax disputes
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Local Insights

Indonesia tax update: depreciating tangible assets and electronic tax disputes

Sponsored by

sponsored-firms-gnv.png
video-conference-5167472.jpg

Dwipa Abimanyu Dewantara and Hartiadi Budi Santoso of GNV Consulting review recent Indonesian tax regulation, with new depreciation and amortisation rules for assets and provisions for electronic tax disputes.

Depreciation of tangible assets/amortisation of intangible assets

On July 13 2023, the Minister of Finance (MoF) issued a new regulation, number 72/2023 (PMK-72), regarding the depreciation of tangible assets and/or amortisation of intangible assets. Through this regulation, the MoF has now revoked regulations No. 248/PMK.03/2008, 249/PMK.03/2008, 126/PMK.011/2012, and 96/PMK.03/2009. 

Here are some new salient points taken from PMK-72/2023:

Depreciation of tangible assets

Under the old regulation, permanent buildings should be depreciated over 20 years. However, under PMK 72/2023, the taxpayer now has the option to use the following depreciation methods for permanent buildings which have a useful life exceeding 20 years:

  • 20 years; or

  • In accordance with the actual useful life based on the taxpayer's accounting records, if they are maintained in a compliant manner.

Taxpayers who have already depreciated permanent buildings, which were owned and utilised before the tax year 2022 (according to the 20 years useful life provision), may choose to depreciate based on the actual useful life by submitting a notification to the Directorate General of Taxation no later than April 30 2024.

Amortisation of intangible assets

Like the treatment for depreciation of buildings, for the amortisation of intangible assets with a useful life exceeding 20 years, the taxpayer can choose to use either a straight-line 5% amortisation for 20 years or follow the actual useful life based on the taxpayer’s bookkeeping. This can be done by submitting a notification to the tax authority no later than 30 April 2024.

Electronic administration of tax disputes in the Tax Court

On July 21 2023, the head of the Tax Court issued a new regulation, number PER-1/PP/2023 (PER-1), regarding the electronic administration of tax disputes and hearings in the Tax Court. Through this regulation, the head of the tax court has revoked regulation No. KEP-16/PP/2020.

Some salient points taken from PER-1/2023 are as follows:

Account registration

Taxpayers, tax bearers, or attorneys shall apply to be registered applicants electronically by uploading the following documents:

  • Account registration application letter; and

  • Registration certificate/ tax ID number/ identity card/ family card/ passport and attorney license (for legal representatives).

Registered applicants will be given an account activation link to receive administrative and hearing services electronically from the e-tax court to the electronic domicile address.

Appeals and lawsuits

An appeal or lawsuit can be filed by a registered applicant by uploading an appeal or lawsuit letter in electronic pdf or doc/docx/rtf formats.

A registered applicant who has filed an appeal or lawsuit through the e-tax court will obtain an electronic proof of receipt (BPE). The date stated in the BPE is the date the letter is received at the Tax Court.

Electronic hearings

Appeals and lawsuits which are filed electronically will be heard electronically via video conferencing. However, for appeals or lawsuits that are not filed electronically, the hearings can still be conducted electronically with the consent of the appellant or plaintiff.

In the electronic hearing process, the parties submit electronic documents to the e-tax court in accordance with the period set by the judges. For effective tax dispute examination, the judges may change a hearing from electronic to face-to-face (offline).

Tax Court verdicts

The verdict will be pronounced electronically by the judges. The decision is provided via an electronic copy of the decision with the registrar's electronic signature. The electronic verdict can also be implemented for appeals or lawsuits that are not filed through the e-tax court.

This regulation is effective from July 31 2023.

more across site & bottom lb ros

More from across our site

The ‘big four’ firm has threatened to legally pursue those behind the letter, which has been circulating on social media
The guidelines have been established in the wake of multiple tax scandals and controversies that have rocked the accounting profession
KPMG Netherlands’ former head of assurance also received a permanent bar and $150,000 fine; in other news, asset management firm BlackRock lost a $13.5bn UK tax appeal
The new, fully integrated office will also offer M&A, dispute resolution, IP and corporate tax services
The new guidance concerns a recent 1% excise tax on the repurchases of corporate stock for both US and certain foreign companies
Interpath has hired a managing partner from rival accounting firm BDO to lead the new operation
Survey results of over 28,000 in-house lawyers reveal that American in-house counsel place a higher value on the reputation of external advisers than their peers elsewhere
In an exclusive interview with ITR, Andrew Leigh also endorsed new legislation designed to prevent multinationals using complex corporate structures to reduce taxes
Nick Crama and Parwesh Bissumbhar, senior director and manager respectively at Alvarez & Marsal, outline practical advice for real estate managers to comply with DAC6 regulations
The finalists for the 13th annual awards revealed
Gift this article