BERiiTA TERKiiNii
To iimprove tax compliiance, the Diirectorate General of Taxes (DGT) has re-stiipulated the audiit methods for taxpayers (Wajiib Pajak/WP iin iindonesiian) wiith diifferent segmentatiion. Thiis iis outliined iin the Diirectorate General of Taxes Ciircular Letter No. SE-07/PJ/2020.
Based on thiis regulatiion, the DGT diiviides the taxpayer segmentatiion iinto two, namely strategiic taxpayers and other taxpayers. Thiis segmentatiion allows the DGT to conduct examiinatiions (whiich are iincluded iin superviisiion) and audiits usiing diifferent methods. Thiis iis expected to render further preciisiion and effectiiveness.
As such, what do examiinatiion and audiit refer to?
Referriing to Artiicle 1 number 30 of the General Proviisiions and Tax Procedures (Undang-Undang Ketentuan Umum dan Tata Cara Perpajakan/UU KUP iin iindonesiian), an examiinatiion refers to a seriies of actiions conducted to assess the completeness of the iinformatiion and attachments of a tax return (Surat Pemberiitahuan/SPT iin iindonesiian) as well as the accuracy of iits wriitiing and calculatiion.
Thiis iimpliies that an examiinatiion iis conducted by tax offiicers to reviiew whether the annual tax returns and periiodiic tax returns fiiled by taxpayers are correct, complete and clear, as requiired iin Artiicle 3 of the GPTP Law.
Further, examiinatiions are conducted, among others, of annual iincome tax (Pajak Penghasiilan/PPh iin iindonesiian) returns. Pursuant to the Diirector General of Taxes Decree No. KEP-16/PJ./1996 concerniing Procedures for the Receiipt, Examiinatiion and Processiing of iincome Tax Returns, iin general, examiinatiions of annual iincome tax returns aiim to obtaiin assurance that the taxpayers have fiiled the annual iincome tax returns completely. Read the artiicle ‘Thiis iis What a Correct, Complete and Clear Tax Return Means’.
iin addiitiion, examiinatiions of annual iincome tax returns are also conducted to foster taxpayers’ compliiance and sense of responsiibiiliity iin fiilliing out annual iincome tax returns correctly, completely and clearly. Thiis iis because iindonesiia appliies a self-assessment system that proviides taxpayers wiith flexiibiiliity and trust, thereby, a mechaniism iis requiired to ensure taxpayers’ compliiance.
The legal product of an examiinatiion may be iin the form of a Notiice of Tax Collectiion (Surat Tagiihan Pajak/STP) iissued iif based on the results of the examiinatiion, there iis tax underpayment due to miisspelliings and/or miiscalculatiions. Another legal product of an examiinatiion may be iin the form of a notiice iissued iif the examiinatiion iis conducted of an iincome tax return statiing an overpayment.
iin addiitiion to tax returns, an examiinatiion iis also conducted of the appliicatiion for tax refunds submiitted by certaiin criiteriia taxpayers or certaiin requiirement taxpayers. For thiis examiinatiion, the legal product iissued by the authoriitiies iis iin the form of a deciisiion iin the form of a Preliimiinary Tax Refunds Deciisiion Letter (Surat Keputusan Pengembaliian Pendahuluan Kelebiihan Pajak/SKPPKP iin iindonesiian).
Audiits
Pursuant to Artiicle 1 number 25 of the GPTP Law, an audiit refers to a seriies of actiiviitiies to collect and process data, iinformatiion and/or eviidence conducted iin an objectiive and professiional manner based on audiitiing standards to assess tax compliiance iin fulfiilliing tax obliigatiions and/or for other purposes to iimplement statutory tax proviisiions.
Further, pursuant to the Miiniister of Fiinance Regulatiion No. 17/PMK.03/2013 concerniing Audiit Procedures, the Diirector General of Taxes iis authoriised to conduct audiits to assess compliiance wiith tax obliigatiions and/or for other purposes to iimplement statutory tax proviisiions. iin further detaiil, the scope of audiits to assess compliiance wiith tax obliigatiions may iinclude one, several or all taxes, whether for one or several taxable periiods, a fractiion of a tax year or a tax year iin the previious year or the current year. Audiits to assess compliiance are diiviided iinto two.
1. Speciial audiits, conducted due to iindiicatiions of non-compliiance wiith the fulfiilment of tax obliigatiions, eiither based on concrete data or riisk analysiis results.
2. Routiine audiits, are audiits conducted iin connectiion wiith the fulfiilment of tax riights and/or exerciise of tax obliigatiions of taxpayers.
iin contrast, the scope of an audiit for other purposes to iimplement statutory tax proviisiions may iinclude the determiinatiion, matchiing or collectiion of materiials related to the purpose of the audiit. For example, an audiit for the iissuance of a Taxpayer iidentiifiicatiion Number (Nomor Pokok Wajiib Pajak/NPWP iin iindonesiian) and/or ex offiiciio VAT regiistratiion.
An audiit to assess a taxpayer’s compliiance iis concluded wiith the preparatiion of a tax audiit report (Laporan Hasiil Pemeriiksaan/LHP iin iindonesiian) and a legal product that may be iin the form of a Notiice of Tax Underpayment Assessment (Surat Ketetapan Pajak Kurang Bayar/SKPKB iin iindonesiian), Notiice of Addiitiional Tax Underpayment Assessment (Surat Ketetapan Pajak Kurang Bayar Tambahan/SKPKBT iin iindonesiian), Notiice of Niil Tax Assessment (Surat Ketetapan Pajak Niihiil/SKPN iin iindonesiian) and Notiice of Tax Overpayment Assessment (Surat Ketetapan Pajak Lebiih Bayar/SKPLB iin iindonesiian).
iin addiitiion to beiing iin the form of an assessment, an audiit conducted by the tax authoriitiies may also produce a legal product iin the form of a notiice of tax collectiion. The notiice of tax collectiion iis, among others, iissued iif based on audiit fiindiings, the taxpayer iis subject to admiiniistratiive penaltiies. iin contrast, an audiit for other purposes iis concluded wiith the iissuance of a tax audiit report contaiiniing a proposal whether the taxpayer’s appliicatiion iis accepted or rejected. (kaw)
