Tax Inspection and Tax Audit丨Indonesia Tax Guide 2025 (38)
Indonesia
Tax Audit
Tax audit
2025-03-07 09:15:13
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This issue's introduction
Tax inspection and tax audit
Tax Administration Agency
Tax inspection and tax audit
The tax authorities must make a decision on tax refund applications within 12 months, so tax audits generally begin within a few weeks to months after the taxpayer successfully submits a tax refund application.
Corporate income tax refund applications generally trigger a comprehensive tax audit covering all tax types.
Tax refund applications for other tax types generally only trigger a tax audit for that tax type.
The tax authorities may also expand the scope of tax audits to other taxes.
Factors that trigger tax audits include:
(1) Tax refund application;
(2) Overtax declaration (not necessarily including tax refund application);
(3) Annual income tax declaration is in a loss state;
(4) Taxpayers change their accounting year, accounting method or revalue fixed assets;
(5) After risk analysis, they choose not to submit the tax return within the prescribed time or submit the tax return after the deadline specified in the warning letter;
(6) Tax returns do not meet the (undisclosed) requirements of the tax authorities for audit. The tax bureau may conduct special audits for specific purposes with different time and procedures from general audits.
The taxpayer under audit is required to provide the documents and information required for the tax audit within one month.
Taxpayers with related-party transactions may be required to provide transfer pricing documents. If the taxpayer fails to provide the documents and information required for the tax audit within one month, the tax bureau will calculate the corporate tax payable by assessing the profit. Documents and information not provided on time will not be used in subsequent tax assessment reconsideration.
At the end of the tax audit, the auditor will issue a written audit result notice containing the tax adjustment results.
If the taxpayer has any objection to the tax audit results, he/she must respond to the notice in writing within 7-10 working days before attending the audit closing meeting (final decision). At the audit closing meeting, the taxpayer can reiterate his/her objection to the tax audit tax adjustment and submit relevant supporting documents.
If the two parties still have a dispute over the tax audit results, the taxpayer can request to discuss with the Quality Assurance Team (hereinafter referred to as "QAT") of the tax bureau. The QAT will record the discussion.
The tax auditor may change some of the proposed tax adjustments based on the taxpayer's response to the tax audit results and the discussion in the audit closing meeting.
The final discussion results will be summarized in the audit closing meeting document. The taxpayer needs to clearly express his or her position of approval or opposition to each tax adjustment proposal in the document. At the same time, the summary document should clearly state which of the taxpayer's complaints were accepted by the tax auditor, and accordingly cancel certain tax adjustments or reduce the amount of tax adjustments. After the audit closing meeting, the tax auditor and the taxpayer need to sign the audit closing meeting summary document.
The audit closing meeting should be completed within three weeks from the date when the taxpayer was first invited to participate. The tax adjustments agreed upon by both parties in the tax audit closing meeting summary document will constitute the minimum tax basis for the taxpayer's tax assessment.
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