Indonesia: late periodic Article 21 income tax returns addressed among new measures

On February 27 2026, the Indonesian Directorate General of Taxes (DGT) issued Director General of Taxes Decree No. KEP-37/PJ/2026 concerning Tax Policy for Coretax Implementation regarding the Submission of December 2025 Periodic Article 21 Income Tax Returns.

The highlights of the policy are as follows.

Taxpayers will not be subject to administrative sanctions in the form of late-filing penalties (as stipulated in Article 7, paragraph 1 of the General Tax Procedures Law (Ketentuan Umum Perpajakan, or the KUP Law)) for the late submission of the December 2025 periodic Article 21 income tax return, provided that the return was submitted no later than the end of February 2026.

The regulation also stipulates that a late submission of the December 2025 periodic Article 21 income tax return will not serve as a basis for revoking a taxpayer’s Certain Taxpayer status (as referred to in Article 17C of the KUP Law), nor as grounds for rejecting an application for such status.

This measure aims to provide legal certainty for taxpayers who consistently maintain high compliance standards.

KEP-37/2026 became effective on February 27 2026.

On March 27 2026, the DGT issued Director General of Taxes Decree No. KEP-55/PJ/2026 concerning Tax Policy in Relation to the Implementation of the Coretax Administration System, Particularly Regarding the Submission of the 2025 Annual Individual Income Tax Return.

The policy highlights include the following.

Individual taxpayers are exempt from an administrative sanction in the form of late-filing penalties (as stipulated under Article 7, paragraph 1 and Article 19, paragraph 3 of the KUP Law) for the late submission of the 2025 annual individual income tax return, provided that the return is submitted no later than one month after the statutory filing deadline.

Individual taxpayers are also exempt from an interest penalty for late payment (as stipulated under Article 9, paragraph 2b and Article 19, paragraph 3 of the KUP Law), provided that the tax return is submitted and the outstanding tax is paid no later than one month after the filing deadline.

The DGT will not issue a tax collection letter (STP) in relation to the aforementioned administrative penalties. If an STP has already been issued, the relevant DGT regional office will cancel the sanction automatically (ex officio).

The policy also confirms that the late submission of the 2025 annual individual income tax return will not serve as a basis for revoking a taxpayer’s Certain Taxpayer status, nor as grounds for rejecting an application for such status.

KEP-55/2026 became effective on March 27 2026.

On March 16 2026, the DGT issued Director General of Taxes Regulation No. PER-3/PJ/2026. The regulation aims to provide legal certainty, simplify tax administration, improve taxpayer services, and support the implementation of the Coretax system.

This regulation replaces and revokes certain provisions previously stipulated under Director General of Taxes Regulation No. PER-11/PJ/2025; i.e., Article 2 paragraph 1, letter g; articles 95 to 112; Article 127; and Article 128.

The key regulatory updates include the following.

Taxpayers who are required to submit tax returns in electronic form must do so through the taxpayer portal or other applications integrated with the DGT’s administration system. If a tax return is submitted in paper form, the DGT will not issue a receipt of acceptance, and the tax return will be deemed to have not been filed.

Taxpayers meeting certain criteria may request an extension of up to two months for submitting their annual tax return by submitting an electronic notification through the taxpayer portal before the statutory filing deadline.

The notification must be accompanied by:

• A provisional calculation of income tax payable;

• Provisional financial statements; and

• Proof of settlement of any tax underpayment (if applicable).

If the DGT does not issue a notification regarding the extension within five working days, the extension will be deemed to be approved in accordance with the taxpayer’s application (articles 5 and 6).

This extension mechanism also applies to individual taxpayers (employees) who have not yet received their Article 21 withholding tax slip from their employer. In such cases, taxpayers may request a filing extension by attaching a statement letter from their employer.

The regulation sets out detailed conditions under which a tax return may be declared incomplete or deemed to have not been filed. These conditions include situations where the tax return is not signed, required attachments are incomplete, or the return is submitted after the commencement of a tax audit or after the issuance of a tax assessment.

In addition, an amended tax return reporting a loss or tax overpayment will be deemed not filed if it is submitted less than two years before the expiry of the statute of limitations. In such cases, the DGT will issue a notification and delete the receipt data from its administration system (Article 12, paragraph 5 and Article 18). This provision also applies to specific cases, including married women who are taxed separately under the separation of property regime (MT) and taxpayers using the net income calculation norm whose notifications have not been validated in the system.

Article 22 stipulates that an overpayment amount reported in a tax return will not be treated as a tax overpayment if it:

• Arises from rounding differences in the DGT system;

• Originates from government-borne income tax (PPh DTP); or

• Results from errors in the inclusion of tax credits that have not been validated by the system.

In such cases, taxpayers are not allowed to submit a refund application, and the amount will not be subject to a preliminary refund procedure or a tax audit.

Individual taxpayers whose income does not exceed the non-taxable income threshold (PTKP) – regardless of whether they conduct business activities, perform independent work, or receive income from a single employer – are exempt from the obligation to submit an annual income tax return, as well as the periodic Article 25 income tax return (Article 20).

Extension notifications for the 2025 annual tax return (or part-year 2025 tax period) that have not yet been issued, as well as 2025 individual annual income tax returns received before this regulation came into effect but for which no preliminary refund decision or audit has been initiated, will be processed in accordance with the provisions of this regulation (Article 23).