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Indonesian tax office prioritises monitoring ‘concrete data’ that expires soon

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Benjamin Simatupang and Julius Wahyu Daryono of GNV Consulting summarise recent legislative developments in Indonesia regarding the analysis of concrete data, customs re-examination, and the procedures for issuing tax assessment and tax collection notices.

The Indonesian tax office (ITO) has issued Circular No. SE-9/PJ/2023 regarding the Resolution of Follow-up on Concrete Data. The circular became effective on August 4 2023.

Concrete data includes tax invoices, withholding tax or income tax collection evidence, and transaction records. Concrete data that considered results in the underpayment or non-payment of taxes will be followed up with further examination of the concrete data. For this purpose, a prioritisation list has been prepared by the ITO.

In general, in the event that the result of the examination indicates non-compliance by the taxpayer, for concrete data that will expire after 90 days, the ITO will issue a letter of request for explanation of the data and/or information (a Surat Permintaan Penjelasan atas Data dan/atau Keterangan, or SP2DK).

For concrete data that will expire in 90 days or less, the ITO will issue a tax audit instruction letter.

The government regulates customs re-examination

The Ministry of Finance (MoF) has issued a new regulation, No. 78/2023 (MoF-78/2023), regarding re-examination in the customs field. The regulation will come into effect on October 20 2023.

MoF-78/2023 sets forth more detailed provisions concerning the scope and procedures for re-examination in the customs field, as previously stipulated in Law No. 17 of 2006.

While Law No. 17 of 2006 only regulated that re-examination can be carried out on import notifications that affect the import duty rates of imported goods, MoF-78/2023 extends its coverage to import and/or export notifications that result in changes to import and/or export duties.

The scope of MoF-78/2023 stipulates that re-examination shall be conducted on import and export customs declarations that have reached more than 30 days since the registration date:

  • Imports – re-examination is conducted on import customs declarations on the rate and/or customs value. Re-examination is conducted within two years from the date of import customs declaration registration.

  • Exports – re-examination of export customs declarations is conducted on export duty rates, export prices, types of export goods, and/or quantities of export goods. Re-examination is conducted within two years from the date of export customs declaration registration.

The goods owner or importer is obligated to provide a written explanation and samples of the goods in response to a request for data and/or documents issued by the Directorate General of Customs and Excise (DGCE) no later than seven days from the date of the request for data and/or documents. The submission of written data can be done directly, through courier services, electronic media, or a computerised service system.

Failure to provide the required written explanation will be considered as not submitting any data. As a result, the DGCE will issue an SP 1 (a first warning letter), then, if necessary, an SP 2 (a second warning letter), and ultimately block customs access.

Procedures for issuing tax assessment notices and tax collection notices

On August 22 2023, the MoF issued a new regulation, No. 80/2023 (MoF-80/2023) regarding the procedures for issuing tax assessment notices (SKP) and tax collection notices (STP). MoF-80/2023 came into force on the date of its promulgation, August 24 2023.

The enactment of MoF-80/2023 revokes previous regulations; i.e., MoF-145/2012, which regulates the procedures for issuing SKP and STP; and MoF-255/2014, certain articles in MoF-256/2014, and MoF-78/2016, which regulate SKP and STP for land and building tax.

The most salient points taken from MoF-80/2023 are as follows:

  • MoF-80/2023 consolidates the provisions for the issuance of SKP and STP, as well as STP for land and building tax, which were previously governed by separate regulations.

  • From the time of promulgation of this regulation, the delivery of SKP and STP to taxpayers can be done electronically upon availability of the system.

  • Through this regulation, the government can issue SKP for:

    • Underpayment in stamp duty collection;

    • Carbon tax collectors that have failed to collect and/or remit carbon taxes properly; and

    • Taxpayers engaged in activities that generate carbon emissions that have not paid or underpaid carbon taxes.

  • For taxpayers that have obtained approval to use US dollars, SKP and STP (with an exception for an administrative penalty) are issued using US dollars.

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