The Indonesian director general of taxes has issued Decree No. KEP-239/PJ/2026 to provide eligible taxpayers with a reduction or waiver of administrative sanctions of up to 100%. The applicable relief depends on the type of sanction and the timing of fulfilment of the requirements. The decree is the implementing regulation of Article 27A of Minister of Finance Regulation No. 118/2024, as amended by Minister of Finance Regulation No. 71/2026.
The relief covers administrative sanctions arising from or relating to:
Late filing of annual income tax returns (corporate and individual) for fiscal years up to 2025 and monthly tax returns up to the September 2026 tax period;
Voluntary amendments to tax returns resulting in tax underpayments;
Late payment or remittance of taxes;
A tax assessment letter (surat ketetapan pajak, or SKP) and a tax collection letter (surat tagihan pajak, or STP); and
An SKP relating to assets that were not or were insufficiently disclosed under the Voluntary Disclosure Programme (Program Pengungkapan Sukarela, or PPS).
Scope and eligibility period
For late filing of tax returns, the relief is only available for returns with an underpayment status. For voluntary amendments, the amended tax returns must also result in an underpayment, with the filing or amendment and tax payment or remittance completed between October 8 2026 and June 30 2027. Similar relief is available for late payment or remittance of taxes due under eligible tax returns within the prescribed periods.
The relief also covers administrative sanctions imposed under an SKP, a land and building tax assessment letter (surat ketetapan pajak pajak bumi dan bangunan), and an STP, whether issued before or during the above period.
For an SKP or STP issued as a result of a tax audit during this period, the underlying tax liability must be settled no later than June 30 2027. For tax assessments or collection letters issued before October 8 2026, the relief may be granted where the underlying tax liability, tax arrears, and/or a portion of the administrative sanctions are paid by June 30 2027, subject to the applicable category and requirements.
The covered sanctions under an SKP and STP also include administrative penalties relating to land and building tax. The relief extends to penalties for tax invoices as stipulated under Article 14, paragraph (4) of the General Tax Provisions and Procedures Law (UU KUP), subject to the requirements in the Appendix to KEP-239/PJ/2026.
For assets that were not or were insufficiently disclosed under the PPS, as stipulated in Minister of Finance Regulation No. 196/2021, the relief applies to administrative sanctions imposed under an SKP resulting from tax audits issued between October 8 2026 and December 31 2027. The underlying tax liability must be settled no later than December 31 2027.
Amount of reduction or waiver of administrative sanctions
The amount of relief depends on the type of administrative sanction, the payment status, and the timing of fulfilment of the tax obligations. For certain categories, the reduction is determined based on when the tax return is filed or amended, or the underlying tax liability is settled. Generally, the earlier the obligations are fulfilled, the greater the reduction available.
Taxpayers in some categories may also benefit from a partial payment mechanism, whereby only a portion of the outstanding administrative sanctions needs to be paid to obtain the reduction. The relief may reach 90% upon payment of 10% of the administrative sanctions, or 75% upon payment of 25% of the administrative sanctions, provided that the category-specific conditions and applicable deadlines under the Appendix to KEP-239/PJ/2026 are satisfied.
Accordingly, the same reduction mechanism does not apply to all types of administrative sanctions. Taxpayers should identify the sanction category and refer to the applicable matrix in the Appendix to KEP-239/PJ/2026 before determining the amount payable.
The Appendix to KEP-239/PJ/2026 sets out the applicable relief based on four business process categories:
Taxpayer compliance monitoring;
Tax audits;
Tax collection; and
Tax database administration.
Application requirements
To obtain the relief, taxpayers must submit an application to the director general of taxes no later than October 1 2028, and comply with the requirements under articles 23 and 24 of Minister of Finance Regulation No. 118/2024, as amended by Minister of Finance Regulation No. 71/2026, as well as the additional requirements stipulated under the Fourth Dictum of KEP-239/PJ/2026.
The requirements include the following:
Fulfilment of payment – the taxpayer must satisfy the applicable payment requirements for the underlying tax liability, tax arrears, and/or a portion of the administrative sanctions, depending on the relevant relief category.
No ongoing legal proceedings – the taxpayer must submit a duly stamped declaration confirming that no lawsuit or other legal remedy has been filed in relation to the relevant tax assessment or collection letter. If a lawsuit or other legal remedy has already been filed, the taxpayer must submit a request for its withdrawal.
Declaration of inadvertence or absence of fault – the taxpayer must submit a duly stamped declaration confirming that the administrative sanctions arose due to inadvertence or circumstances not attributable to the taxpayer’s fault.
Outstanding administrative sanctions – the relief applies only to administrative sanctions that remain unpaid.
For individual taxpayers, the declarations must be signed by the taxpayer; for corporate taxpayers, they must be signed by the taxpayer’s authorised representative.
Under Article 24, an application for the reduction or waiver of administrative sanctions may be submitted twice. A second application must be submitted no later than three months from the date on which the decision letter on the first application is sent, unless the taxpayer can demonstrate that the deadline could not be met due to circumstances beyond its control. The second application must relate to the same SKP or STP for which a decision on the first application has been issued. An application for the reduction of land and building tax administrative penalties may only be submitted once.
Administrative sanctions imposed under an STP relating to objection, appeal, and judicial review proceedings – as referred to in Article 25, paragraph 9; Article 27, paragraph 5d; and Article 27, paragraph 5f of the UU KUP – are excluded from the scope of this relief.
Taxpayers must submit their applications to the Directorate General of Taxes together with the supporting documents and declarations.
If an application does not satisfy the requirements, it may be returned to the taxpayer for completion. Accordingly, taxpayers should ensure that all supporting documents are complete, the calculation of administrative sanctions is accurate, and the payment requirements have been fulfilled before submitting the application.
Practical considerations for taxpayers
KEP-239/PJ/2026 provides a substantial but time-sensitive opportunity to resolve outstanding tax obligations at a lower administrative penalty cost. The principal tax liability remains payable, and the amount of relief depends on the type of penalty, the assessment and objection status, and the timing of the relevant compliance action.
For taxpayers with outstanding assessments, ongoing tax disputes, unpaid administrative penalties, or unfiled returns, the practical benefit of the programme should be assessed against the applicable reduction percentage and any legal consequences of withdrawing an existing objection or other remedy.
In particular, taxpayers seeking the maximum available reduction should distinguish the earlier compliance deadlines from the much later deadline for submitting the administrative penalty relief application.
