Regarding taxation, taxpayers sometimes feel dissatisfied with the decision letter regarding their objection, so in accordance with Law Number 7 of 2021 on Harmonization of Tax Regulations, article 27 paragraph 1, taxpayers can submit an appeal to the Tax Court regarding the decision letter. The submission of an appeal against the objection decision letter is in accordance with article 25 paragraph 10 where the administrative fines of 30% is not imposed the submission of objections,
What is the procedure for submitting an appeal?
Based on article 27, appeals must be submitted in Indonesian writing with clear reasons no later than 3 months after the objection decision letter is received and accompanied by a copy of the objection decision letter. If the taxpayer files an appeal, the Director General of Taxes (DGT) shall provide a written statement which forms the basis of the objection decision letter issued by the DGT no later than 1 month after the written request is received by the DGT. In accordance with paragraph 5a, taxpayers must pay the unpaid tax amount at the time of filing the objection, and it is deferred for up to one month from the date of issuance of the appeal decision. This amount is not included as a tax debt until the appeal decision is issued.
Administrative Sanctions in Appeal Submissions.
In submitting an appeal, there are administrative sanctions that must be fulfilled by taxpayers if the appeal is rejected or partially granted. The sanction is 60% of the tax amount based on the appeal decision minus the tax payment that has been paid before filing the objection in accordance with Article 27 paragraph 5d. Therefore no sanctioned must be paid if the taxpayer has paid all taxes owed in the tax assessment letter, the following is an example of a sanction calculation: the taxpayer receives a tax assessment letter for an underpayment of 100 million, then the taxpayer paid 100 million before filing an objection, so the sanction calculation is 60% x (100 million – 100 million) = 0. If the taxpayer or DGT files for a review, the tax court’s decision will not be suspended or terminated.
By Olina Rizki Arizal – Partner
TBrights is a tax consultant in Indonesia that currently serves as an Integrated Business Service in Indonesia, providing comprehensive taxation and business services.
Reference:
- The Law Number 7 of 2021 on Harmonization of Tax Regulations
