Summary Answer:
At the time of audit, the Taxpayer cannot amend the Tax Return as stipulated in Article 8 paragraph (1) of UU KUP, but can disclose the incorrect filling of the Tax Return as stipulated in Article 8 paragraph (4) of UU KUP. At the time of filing the disclosure of untruth, the Taxpayer must pay according to the amount of underpayment in the disclosure tax return plus the interest sanction in Article 8 paragraph (5) and (5a). It should be noted that even though the Taxpayer makes an untruth disclosure, the audit process is still continued. If the audit results in SKPKB, the taxpayer only needs to pay the underpayment amount stated in SKPKB plus interest sanction multiplied by the underpayment amount in SKPKB as stipulated in Article 13 paragraph (1) letter a of UU KUP. For information, the disclosure of untruth does not cause the taxpayer to get additional sanctions at the time of SKPKB issuance.
Complete Discussion:
Thank you Mr Togar for your question. The provision regarding the correction of Tax Return can be referred to Article 8 of Law No. 6 Year 1983 on General Provisions and Tax Procedures until Law No. 6 Year 2023 Stipulating Government Regulation in Lieu of Law No. 2 Year 2022 on Job Creation into Law (‘KUP Law’).
Taxpayers may correct the submitted Tax Return by submitting a written statement as long as the Director General of Taxes has not conducted audit action as stated in Article 8 paragraph (1) of KUP Law which reads as follows:
‘Taxpayers on their own accord may correct the Tax Return that has been submitted by submitting a written statement provided that the Director General of Taxes has not conducted audit actions.’
Article 8 paragraph (1) of UU KUP
The phrase ‘starting to perform audit actions’ referred to in Article 8 paragraph (1) of UU KUP is when the Tax Auditor submits the Tax Return to the Taxpayer, representative, attorney, employee or adult family member of the Taxpayer.
However, pursuant to Article 8 paragraph (4) of UU KUP, instead, the Taxpayer is still given the opportunity to submit the disclosure of the incorrect filling of the Tax Return that has been submitted in accordance with the actual circumstances, even though the audit process continues. The condition applies when the Director General of Taxes has not submitted the Notice of Audit Result (SPHP), although the audit process is ongoing. Thus, what needs to be noted in this case is that even though the Taxpayer discloses the untruth, the audit process is still continued.
The underpaid tax arising from the disclosure of the incorrect filling of the Tax Return shall be paid by the Taxpayer plus the interest sanction for disclosure. The interest rate as an administrative sanction is determined by the Minister of Finance based on the benchmark interest rate plus 10% and divided by 12 applicable on the date of commencement of the sanction calculation.
This provision refers to Article 8 paragraph (5) and (5a) of UU KUP, which reads as follows:
‘The underpaid tax arising as a result of the disclosure of the incorrect filling of the Tax Return as referred to in paragraph (4) must be paid by the Taxpayer before the separate report is submitted along with administrative sanctions in the form of interest at the interest rate per month determined by the Minister of Finance from the underpaid tax, which is calculated from:
- the deadline for submission of Annual Notification Letter ends until the date of payment, for disclosure of untruthful filling of Annual Notification Letter; or
- the due date of payment ends until the date of payment for the disclosure of the incorrect filling of the Periodic Tax Return; or and imposed for a maximum of 24 (twenty-four) months, and part of the month shall be counted in full as 1 (one) month’
– Article 8 paragraph (5a) of UU KUP
‘The interest rate per month determined by the Minister of Finance as referred to in paragraph (5) is calculated based on the benchmark interest rate plus 10% (ten per cent) and divided by 12 (twelve) applicable on the date of commencement of the calculation of sanctions’
For information, the disclosure of untruth does not cause the Taxpayer to receive additional sanction upon the issuance of SKPKB. Therefore, if the disclosure of untruth is deemed necessary, the Taxpayer should do it first in accordance with the applicable regulations.
Furthermore, if the taxpayer receives SKPKB as a result of the audit, the taxpayer only needs to pay the amount of underpayment stated in SKPKB plus interest sanction multiplied by the underpayment amount in SKPKB as stipulated in Article 13 paragraph (1) letter a of KUP Law as follows:
‘The Director General of Taxes may issue an Underpaid Tax Assessment Letter within a period of 5 (five) years after the tax becomes payable or the end of the Tax Period, Part of the Tax Year, or Tax Year after an audit action is carried out in the following cases:
-
- there is tax that is not or underpaid;
- ………………….
The amount of tax deficiency payable in the Surat Ketetapan Pajak Kurang Bayar as referred to in paragraph (1) letter a shall be added with administrative sanction in the form of interest at the rate of interest per month determined by the Minister of Finance calculated from the time the tax becomes payable or the end of the Tax Period, part of the Tax Year, or Tax Year until the issuance of Surat Ketetapan Pajak Kurang Bayar, and shall be imposed for a maximum of 24 (twenty-four) months and part of the month shall be calculated in full 1 (one) month.
Thus, if in the case of an audit has been conducted, the Taxpayer cannot make the correction. Instead, the Taxpayer may disclose the untruth of the Tax Return by paying the amount of underpayment and sanction incurred. In this case, the disclosure of the untruth does not cause the Taxpayer to get additional sanction at the time of SKPKB issuance. If the SKPKB is issued as a result of the audit, the Taxpayer only needs to pay the underpayment amount stated in the SKPKB plus the interest sanction in accordance with the applicable regulations.
