UU 16 2000 English

LAW NO 16 TGL 02/08/2000
INDONESIA - GENERAL
LAW
NUMBER 16 YEAR 2000 DATE 02 AUGUST 2000
SUBJECT
THE SECOND AMENDMENT TO LAW NUMBER 6 YEAR 1983 CONCERNING GENERAL
PROVISIONS AND TAXATION PROCEDURES
WITH THE BLESSING OF ALMIGHTY GOD

PRESIDENT OF THE REPUBLIC OF INDONESIA,
Considering:
that in a bid to better provide justice and enhance service for taxpayers as well as to better assure legal
certainty, it is necessary to amend Law Number 6 Year 1983 on taxation general provisions and
procedures as already amended by Law Number 9 Year 1994;
In view of:
1. Article 5 paragraph (1), Article 20 paragraph (2) and Article 23 paragraph (2) of the Constitution of
the Republic of Indonesia as already amended by the First Amendment of 1999;
2. Law Number. 6 Year 1983 on taxation general provisions and procedures (Statute Book Year
1983 Number 49, Supplement to Statute Book Number 3262) as already amended by Law
Number 9 Year 1994 (Supplement to Statute Book Year 1994 Number 59, Supplement to Statute
Book Number 3566);
With the Approval of:

THE HOUSE OF REPRESENTATIVES OF THE REPUBLIC OF INDONESIA
DECIDES:
To stipulate:
THE SECOND AMENDMENT TO THE LAW NUMBER 6 YEAR 1983 CONCERNING GENERAL
PROVISIONS AND TAXATION PROCEDURES.
Article I
Several provisions in Law Number 6 Year 1983 on General Provisions and Taxation Procedures (Statute
Book Year 1983 Number 49, Supplement to Statute Book Number 3262) as already amended by Law
Number 9 Year 1994 (Statute Book Year 1994 Number 59, Supplement to Statute Book Number 3566)
shall be amended as follows:
1. Provision Article 1 amended, so Article 1 entirely read as follows:
"Article 1
Referred to in this law as:
1. Taxpayers shall be individuals or statutory bodies which according to provisions of
taxation laws, are stipulated to perform taxation obligations, including certain tax
collectors or withholders.
2. Statutory bodies shall groups of persons, and/or capital which constitutes an unit,
undertaking or not undertaking businesses, covering limited liability companies, limited
partnership companies, other companies, state # or regional administration-owned
Taxes 2.0 Licensed To PT THE PRACTICE - PT THE PRACTICE Hal 1 dari 48

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companies in whatever names and forms, firms, joint companies, cooperatives, pension
funds, partnerships, groups, foundations, mass organisations, social and political
organisations or organisations of the same type, institutions, permanent establishments
and other forms of statutory bodies.
3 Companies/entrepreneurs shall be individuals or statutory bodies in whatever forms which
in their business activities or works/jobs produce goods, import goods, export goods,
undertake trading businesses, utilize untangle goods from regions outside the customs
area, provide services or utilize services from regions outside the customs area.
4. Taxable companies shall be the companies as meant in point 3 which deliver taxable
goods or services subjected to the collection of tax on the basis of the Value-Added Tax
Law of 1984 and its amendments, excluding small-scale businesses whose criteria are
stipulated by the Minister of Finance, except small-scale businesses deciding to be
validated as taxable companies.
5. Taxpayer Code Numbers shall be numbers given to taxpayers as means in the taxation
administration which are used as personal identities or identities of taxpayers in
exercising and fulfilling taxation rights and obligations.
6. Tax Period shall be a period whose duration is equal to one calendar month or other
periods stipulated by a decision of the Minister of Finance at the maximum of 3 (three)
calendar months.
7. Tax Year shall be the period of 1 (one) calendar year unless taxpayers use accounting
years different from the calendar year.
8. Part of Tax Year shall be part of the period of one tax year.
9. Tax Due shall be amounts of tax which must be paid at a certain time, tax period, tax year
or part of tax year according to provisions of taxation laws.
10. Tax Return is the form used by a Taxpayer to report the calculation and payment of tax
due according to the provisions of tax law.
11. Periodical Tax Returns shall be tax returns for one tax period.
12. Annual Tax Returns shall be tax returns for one tax year or part of tax year.
13. Tax Payments shall be letters used by taxpayers to pay or remit tax due to the state cash
through Post Offices and/or state- or regional administration-owned banks or other
payment point appointed by the Minister of Finance.
14. Tax Assessments shall be letters of stipulation of tax covering. Underpaid-Tax
Assessments or Additional Underpaid-Tax Assessments or Overpaid-Tax Assessments
or Nil-Tax Assessments.
15. Underpaid-Tax Assessments shall be letters of stipulation of tax determining amounts of
principal tax, tax credits, shortages of payment of principal tax, administrative sanctions
and the remainder which must be paid.
16. Additional Underpaid-Tax Assessments shall be letters of stipulation of tax determining
amounts in excess of tax payment because amounts of tax credits exceed tax due, or tax
which should not be owned.
17. Overpaid-Tax Assessment shall be letters of stipulation of tax determining amounts in
excess of tax payment because amounts of tax credits exceed tax due, or tax which
should not be owned.
18. Nil-Tax Assessments shall be letters of stipulation of tax determining that principal
amounts of tax are equal to amounts of tax credits or tax is not owed and tax credits are
nil.
19. Tax Collection Letters shall be letters to collect tax and/or administrative sanctions in the
forms of interest and/or fines.
20. Distress Warrants shall be letters of order to pay tax due and costs of collection of tax.
21. Tax Credits for Value Added Tax shall be input tax creditable after being reduced by the

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amounts of preliminary restitution of overpaid tax or after being reduced by amounts of

tax already compensated for, which are deductible from tax due.
22. Tax Credits for Income Tax shall be tax paid by taxpayers themselves plus principal tax
due in Tax Collection Letters because Income Tax for the currents year is not paid or
underpaid, added by tax on income paid or owed abroad, minus amounts of preliminary
restitution to overpaid tax which are deductible from tax due.
23. Independent works/jobs shall be jobs executed by individuals having special expertise in a
bid to earn income not bound by certain working relations.
24. Audits shall be series of activities to seek, collect, process data and other kinds of
information for testing the compliance with taxation obligations and for other purposes in
the framework of the implementation of provisions of taxation laws.
25. Tax Guarantors shall be individuals or statutory bodies responsible for the payment of tax,
including proxies exercising rights and fulfilling obligations of taxpayers according to
provisions of taxation laws.
26. Book keeping/accounting shall be a recording process executed in an orderly manner to
collect financial data and information covering property, liabilities, capital, income and
costs as well as prices of acquisition and delivery of goods and services which are closed
by compiling financial statements in the form of profit/loss balances and statements at the
end of tax years.
27. Examination shall be a series of activities executed to evaluate the completion of Tax
Returns and attachments including the truth of the writing and calculation.
28. Investigation into Taxation Crimes shall be a series of actions executed by investigators to
seek and collect pieces of evidence for clarifying the taxation crimes as well as to find
suspects.
29. Decisions on Rectification shall be decision correcting misprints, miscalculations and/or
misapplication of certain provisions of taxation or Abolition of Administrative Sanctions,
Decisions of Reduction or Revocation of Incorrect Tax Assessments or Decisions on
Preliminary Restitution of Overpaid Tax.
30. Decisions on Objections shall be decisions on objections raised by taxpayers to tax
assessments or tax withholding or collection by the third parties.
31. Decisions on Appeals shall decisions of tax arbitration courts on appeals against
decisions on objections submitted by taxpayers.
32. Decisions on Preliminary Restitution of Overpaid Tax shall be decisions determining
amounts of preliminary restitution of overpaid tax for certain taxpayers."
2. The title of CHAPTER II is amended so as to read as follows:
CHAPTER II
TAXPAYER IDENTIFICATION NUMBER,
VALIDATION OF TAXABLE COMPANIES.
NOTIFICATIONS AND PROCEDURES FOR PAYMENT OF TAX."
3. The provisions in Article 2 paragraphs (2), (3), (4) and (5) are amended so as to entirely read as
follows:
"Article 2
(1) Taxpayers shall register themselves at offices of the Directorate General of Taxation
overseeing their working areas, covering addresses and domiciles of Taxpayer Code
Numbers shall be granted to them.
(2) Taxpayers being taxable companies according the Value Added Tax Law of 1984 and
amendments shall report their businesses to offices of the Directorate General of
Taxation overseeing their working areas, covering addresses and domiciles of the
companies and places of business activities for validating as taxable companies.

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(3) The Director General of Taxation can stipulate:

a. registration and/or reporting places of businesses other than those stipulated in
paragraphs (1) and (2);
b. registration places at offices of the Directorate General of Taxation whose
working areas cover places where businesses are executed, other than the
registration places as meant in paragraph (1), by certain individual taxpayers of
certain companies.
(4) The Director General of Taxation shall issue Taxpayer Code Numbers and/or validate
taxable companies functionally, in the case of taxpayers or taxable companies failing to
fulfill the obligations as meant in paragraphs (1) and (2).
(5) The period of registration and reporting as well as procedures for registration and
validation as meant in paragraphs (1), (2), (3) and (4) including the abolition of Taxpayer
Code Numbers and/or revocation of validation as taxable companies shall be regulated by
a decision of the Director of Taxation.
4. The provision in Article 3 is amended and new provisions are slipped between paragraph (1) and
(2) and between paragraph (5) and (6) to become paragraph (a) and (5a) respectively, so that
Article 3 entirely reads as follows:
"Article 3
(1) Taxpayers shall complete tax returns in the Indonesian language by using Latin letters,
Arabic numbers, the rupiah denomination, as well as signing and conveying the tax
returns to offices of the Directorate General of Taxation where the relevant taxpayers are
registered or validated.
(1a) Taxpayers already securing licenses from the Minister of Finance to adopt book
keeping by using foreign languages and currencies other than the Rupiah, shall
convey tax returns in the Indonesian language and currencies other than Rupiah
which are permitted, whose implementation is regulated by a decree of the
Minister of Finance.
(2) The taxpayers as meant in paragraphs (1) and (1a) shall take themselves the notifications
in places stipulated by the Director General of Taxation.
(3) The deadline of conveyance of tax returns shall be:
a. not later 20 (twenty) working days after the date of expiration of tax period, in the
case of periodical tax returns;
b. not later than 3 (three) months after the date of expiration of tax period, in the
case of annual tax returns.
(4) Based on the applications from taxpayers, the Director General of Taxation can extend
the deadline of conveyance of annual tax returns as meant in paragraph (3) letter b to 6
(six) months at the maximum.
(5) The applications as meant in paragraph (4) shall be conveyed in writing, along with
statements on provisional calculation of tax due in one tax year and evidence of
settlement of underpaid tax due.
(5a) In the case of tax return being not conveyed in accordance with the deadline as
meant in paragraph (3) or the extended deadline of conveyance of tax returns as
meant in paragraph (4), warnings shall be issued.
(6) Models and contents of tax returns as well as information and/or documents which must
be accompanied shall be stipulated by a Decree of the Minister of Finance.
(7) Tax returns shall be considered not be conveyed in the case of the returns being not
signed in accordance with the provision in paragraph (1) or being not completely
accompanied by information and/or documents as meant in paragraph (6).
(8) Certain taxpayers of income tax stipulated by a Decree of the Minister of Finance shall be
exempted from the obligation as meant in paragraph (1)."

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5. The provision in Article 4 paragraph (4) is amended and a paragraph is supplemented to become
paragraph (5) so that Article 4 entirely reads as follows:
"Article 4
(1) Taxpayers shall complete and convey tax returns correctly, completely, clearly and sign
the returns.
(2) In the case of taxpayers being statutory bodies, the tax returns shall be signed by
executives or executive directors.
(3) In the case of the tax returns being completed and signed by parties which are not
taxpayers, they shall be accompanied by letters of special authorization.
(4) Annual Income Tax Returns completed by taxpayers obliged to adopt book keeping shall
be accompanied by financial statements in the form of profit/loss balances or reports as
well as other kinds of information required for calculating amounts of taxable income.
(5) Procedures for the receipt and processing of tax returns shall be regulated by a decree of
the Minister of Finance."
6. The provisions in Article 6 paragraphs (2) and (3) are amended so that Article 6 entirely reads as
follows:
"Article 6
(1) Officials appointed shall put the date of receipt on tax returns directly conveyed by
taxpayers to offices of the Directorate General of Taxation, while evidence of receipt shall
also be given to annual tax returns.
(2) Tax returns can be dispatched through post offices in registered letters or other means
stipulated by a decision of the Director General of Taxation.
(3) Evidence of receipt and date of dispatch of tax returns as meant in paragraph (2) shall be
considered evidence and date of receipt as long as the returns have already been
complete."
7. The provision in Article 7 is amended and made to become paragraph (1), and a new provision is
supplemented to become paragraph (2), so that Article 7 entirely reads as follows:
"Article 7
(1) In the case of tax returns failing to be conveyed in the deadline as meant in Article 3
paragraph (3) of the extended deadline of conveyance of tax returns as meant in Article
paragraph (4), an administrative sanction in the form of a fine shall be imposed as much
as Rp. 50.000 (fifty thousand rupiahs) for annual tax returns and Rp. 100.000 (one
hundred rupiahs) for annual tax returns.
(2) The administrative sanction in the form of a fine as meant in paragraph (1) shall not be
imposed on certain taxpayers stipulated by a decree of the Minister of Finance.
8. The provisions in Article 8 paragraphs (1), (3), (4) and (5) are amended and a new provision is
supplemented to become paragraph (6), so that Article 8 entirely reads as follows:
"Article 8
(1) Taxpayers on the basis of their own intention can rectify tax returns already conveyed by
putting forward written statements in the period of 2 (two) years after the expiration of tax
period, part of tax year or tax year with the provision that the Director General of Taxation
has not yet examined.
(2) In the case of taxpayers rectifying tax returns on the basis of their own intention which
cause tax due to be higher, the relevant taxpayers shall be subjected to fine of 2% (two
percent) of the amounts of underpaid tax per month, calculated from the moment of
expiration of conveyance of tax returns to the date of payment because of rectification of
the tax returns.
(3) In the case of examination being already executed, but as long as investigation into the
untruth made by taxpayers as meant in Article 38 has not yet been executed, the untruth
made by the relevant taxpayers shall not be investigated if the taxpayers on the basis of

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their own intention reveal the untruth accompanied by the settlement of shortages of
payment for amounts of tax which should be owed, along with a fine as high as twice of
amounts of underpaid tax.
(4) Even though the deadline of rectification of the tax returns as meant in paragraph (1) has
already ended, as long as the Director General of Taxation has not yet issued tax
assessments, taxpayers on the basis of their own awareness can reveal the untrue
completion of tax returns already conveyed in separate reports, which cause:
a. amounts of tax not yet paid to be bigger; or
b. losses on the basis of taxation provisions to become smaller; or
c. amounts of assets to become bigger; or
d. amounts of capital to become bigger.
(5) Underpaid tax resulting from the revelation of the untrue completion of tax returns as
meant in paragraph (4) along with an administrative sanction in the form of the increase
as high as 50% (fifty percent) of amounts of underpaid tax, shall be settled by taxpayers
before the conveyance of the separate reports.
(6) Even though the deadline of rectification of tax returns as meant in paragraph (1) has
already expired, as long as the Director General of Taxation has not yet examined,
taxpayers can rectify annual income tax returns, if the relevant taxpayers receive on
objections or appeal for tax assessments for the previous tax year, certifying different
fiscal losses from tax assessments for which objections are raised or decisions on
objections for which appeal is filed, in 3 (three) months after the date of receipt of the
decisions on objections or appeal."
9. The provision in Article 9 is amended and a new provision is slipped between paragraphs (2) and
(3) to become paragraph (2a), so that Article 9 entirely reads as follows:
"Article 9
(1) The Minister of Finance shall determine the date of expiration of payment and remittance
of tax for one tax moment or period for the respective kinds of tax, not later than 15
(fifteen) days after the effective moment of tax due or expiration of tax period.
(2) Underpaid tax owed on the basis of annual tax returns shall be fully settled not later than
25Tahun of the third month after the expiration of tax year or part of tax year, before the
tax returns are conveyed.
(2a) In the case of the tax as meant in paragraph (1) or paragraph (2) being paid or
remitted after the date of expiration of payment or remittance of tax, the taxpayers
shall be subjected to interest of 2% (two percent) per month, calculating from the
date of expiration of payment up to the date of payment, and part of month is fully
rounded up to one month.
(3) Tax collection letters, underpaid-tax assessments, additional underpaid-tax assessments
and decisions on objections, appeals which result in an increase in amounts of tax
liabilities shall be settled in the period of one month as from the date of issuance.
(4) Based on applications from taxpayers, the Director General of Taxation can approve to
pay in installment or postpone the payment of tax including the shortages of payment as
meant in paragraph (2) not later than 12 (twelve) months, whose implementation is
stipulated by a decision of the Director General of Taxation.#
10. The provision in Article 10 is amended so as to entirely read as follows:
"Article 10
(1) Taxpayers shall pay and remit tax due to the state cash through post offices and/or state
or regional administration-owned banks or other payment point stipulated by the Minister
of Finance.
(2) Procedures for payment, remittance and reporting as well as installment and
postponement of payment of tax shall be stipulated by a Decree of Minister of Finance."

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"Article 11
(1) Based on applications from taxpayers, the overpaid tax as meant in Article 17, Article 17B
or Article 17C shall be restituted, but in the case of taxpayers turning out to have tax due,
it is directly calculated to settle the tax due at first.
(2) The restitution of overpaid tax as meant in paragraph (1) shall be done not later than one
month after the date of receipt of applications for the restitution of overpaid tax as meant
in Article 17 or as from the date of issue of overpaid tax assessments as meant in Article
17B or as from the date of issue of decisions on preliminary restitution of overpaid tax as
meant in Article 17C.
(3) In the case of the restitution of overpaid tax being executed after one month, the
government shall pay interest of 2% (two percent) per month for lateness in payment of
overpaid tax, calculated from the deadline as meant in paragraph (2) up to the moment of
payment of the overpaid tax.
(4) Procedures for calculation and restitution of overpaid tax shall be stipulated by a decree
of the Minister of Finance.#
12. The provision in Article 12 is amended and made to become paragraph (1) and two new
provisions are supplemented to become paragraphs (2) and (3), so that Article 12 entirely reads
as follows:
"Article 12
(1) Every taxpayer shall pay tax owed on the basis of provisions of taxation laws, without
depending on the presence of tax assessments.
(2) Amounts of tax due according to tax returns conveyed by taxpayers shall be amounts of
tax due according to provisions of taxation laws.
(3) In the case of the Director General of Taxation finding out that amounts of tax due
according to tax returns as meant in paragraph (2) are not true, the Director General of
Taxation shall stipulate amounts of tax which should be owed.#
"Article 14
(1) The Director General of Taxation can issue tax collection letters in the case of:
a. income tax in the current year being not paid or underpaid;
b. examination of tax returns finding out underpaid tax as a result of misprints or
miscalculations;
c. taxpayers being subjected to an administrative sanction in the form of fine or
interest;
d. companies being subjected to collection of tax on the basis of the Value Added
Tax Law of 1984 and amendments, but they are not reporting their business
activities to be validated as taxable companies;
e. Entrepreneur being not confirmed as Taxable entrepreneur but they make out
Tax Invoices;
f. Entrepreneur which have already been confirmed as Taxable entrepreneur, not
making out or making out tax invoices but they are not completing tax invoices
punctually and completely.
(2) The tax collection letters as meant in paragraph (1) shall have the same legal power as
tax assessments.
(3) Amounts of underpaid tax in the tax claims as meant in paragraph (1) letters a and b shall
be added by an administrative sanction in the form of interest of 2% (two percent) per
month for 24 (twenty four) months at the maximum, calculated as from the effective
moment of tax due or part of tax year and tax year up to the issue of tax collection letters.

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(4) The companies or taxable companies as meant in paragraph (1) letters d, e and f shall be
respectively subjected to administrative sanctions in the form of fine as high as 2% (two
percent) of the basis for imposition of tax.#
14. The provisions in Article 15 paragraphs (1), (3) and (4) are amended so that Article 15 entirely
reads as follows:
"Article 15
(1) The Director General of Taxation can issue underpaid-tax assessments in the period of
10 (ten) years after the effective moment of tax due, expiration of tax period, part of tax
year or tax year, in the case of new data or data previously not yet revealed which cause
the addition to amounts of tax due being found out.
(2) Amounts of underpaid tax in additional underpaid-tax assessments shall be added by an
administrative sanction in the form of the increase as high as 100% (one hundred
percent) of the amount of shortages of payment of the tax.
(3) The increase as meant in paragraph (2) shall not be imposed in the case of additional
underpaid-tax assessments being issued on the basis of written information from
taxpayers on their own intention as long as the Director General of Taxation has not yet
examined.
(4) In the case of the period of 10 (ten) years as meant in paragraph (1) already elapsing,
additional underpaid-tax assessment still can be issued but being added by an
administrative sanction in the form of interest as high as 48% (forty eight percent) of the
amounts of tax which are not paid or underpaid, if the relevant taxpayers after the ten
year period are sentenced for committing taxation crimes on the basis of court decisions
having permanent legal power.#
15. The provision in Article 16 is amended and made to become paragraph (1) and two provisions are
supplemented to become paragraphs (2) and (3), so that the article 16 entirely reads as follows:
"Article 16
(1) The Director General of Taxation in his functional capacity or on the basis of applications
from taxpayers can rectify tax assessments, tax collections letters, decisions on
objections, decision on reduction or abolition of administrative sanctions, decision on
reduction or revocation of incorrect tax assessment, or decisions on preliminary restitution
of overpaid tax, which contain misprints, miscalculations and/or misapplication of certain
provisions of taxation laws in their issuance.
(2) The Director General of Taxation shall make decisions on applications for rectification
submitted in 12 (twelve) months as from the date of receipts of application.
(3) In the case of the period as meant in paragraph (2) elapsing, but the Director General of
Taxation makes no decisions, the applications for rectification submitted shall be
considered acceptable."
16. The provision in Article 17B is amended so as to Article 17B entirely read as follows:
"Article 17B
(1) The Director General of Taxation after examining applications for restitution of overpaid
tax, other than applications for restitution of overpaid tax from taxpayers with certain
criteria as meant in Article 17C, shall issue tax assessments not later than 12 (twelve)
months as from the date of receipt of the applications, unless for certain activities
otherwise stipulated by a decision of the Director General of Taxation.
(2) In the case of the period as meant in paragraph (1) elapsing, but the Director General of
Taxation makes no decisions, applications for restitution of overpaid tax shall be
considered acceptable and overpaid tax assessment shall be issued not later than one
month after the period ends.
(3) In the case of overpaid tax assessment being late to be issued in the period as meant in
paragraph (2), taxpayers shall be given an interest compensation of 2% (two percent) per
month, calculated from the expiration of the period as meant in paragraph (2) up to the

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date of issuance of overpaid tax assessments."

17. A new Article is inserted between Articles 17B and 18 to become Article 17C which reads as
follows:
"Article 17C
(1) The Director General of Taxation after auditing applications for restitution of overpaid tax
from taxpayers with certain criteria, shall issue decisions on preliminary restitution of
overpaid tax not later than 3 (three months as from the date of receipt of applications for
overpaid income tax and one months as from the date of receipt of applications for
overpaid Value Added Tax.
(2) Certain criteria as meant in paragraph (1) shall be stipulated by a Decree of the Minister
Finance.
(3) Taxpayers with certain criteria as meant in paragraph (2) shall be stipulated by a decision
of the Director General of Taxation.
(4) The Director General of Taxation can examine the taxpayers as meant in paragraph (1)
and issue tax assessments, after executing preliminary restitution of overpaid tax.
(5) In the case of on the basis of result of the examination as meant in paragraph (4), he
Director General of Taxation issuing underpaid tax assessments, the negative differences
of tax shall be added by an administrative sanction in the form of the increase as high as
100% (one hundred percent) of the total amounts of shortages of tax payment."
18. Paragraph (2) of Article 18 is abolished so that Article 18 entirely reads as follows:
"Article 18
(1) Tax collection letters, underpaid-tax assessments, additional underpaid-tax assessment
and decisions on rectification, decision on objections and decisions on appeals resulting
an increase in the amounts of tax which must be paid, shall be the basis for collection of
tax.
(2) abolished."
19. The provision in Article 19 is amended so as to Article 19 entirely read as follows:
"Article 19
(1) If tax due according to underpaid-tax assessments for additional underpaid-tax
assessment and addition to amounts of tax which must be paid on the basis of decisions
on rectification, decisions on objections or decisions on appeals are not paid or underpaid
upon the maturity of tax payment, the amounts of tax which is not paid or underpaid shall
be subjected to an administrative sanction in the form of interest as high as 2 (two
percent) per month for the whole period, calculated from the date of maturity up to the
date of payment or the date of issuance of tax collection letters and part of a month is
rounded up to one month.
(2) In the case of taxpayers being allowed to pay in installments or postpone the payment of
tax, the taxpayers shall also be subjected to an administrative sanction in the form of
interest as high as 2% (two percent) per month, and part of a month is rounded up to one
month.
(3) In the case of taxpayers being allowed to postpone the conveyance of tax returns and
amounts of tax due which is provisionally calculated as meant in Article 3 paragraph (5)
turning out to less than the amounts of tax actually due, the shortages of payment shall be
subjected to an administrative sanction in the form of interest as high as 2% (two percent)
per month, calculated from the date of expiration of obligation to convey tax returns as
meant in Article 3 paragraph (3) letter b up to date of payment of the shortages, and part
of a month is rounded up to month.
20. The provision in Article 10 is amended and made to become paragraph (2) and added 2 (two)
paragraphs to become paragraphs (1) and (3), so that the Article 20 reads as follows:
"Article 20

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(1) Amounts of tax due according to tax collection letters, underpaid-tax assessment,
additional underpaid-tax assessment, decision on rectification, decision on objections,
decisions on appeals resulting an increase to the amounts of tax, which is not paid by tax
guarantors in accordance with the period as meant in Article 9 paragraph (3) shall be
collected by Distress Warrants.
(2) In the case of the exemption from the provision as meant in paragraph (1), immediate and
total collection shall be executed if:
a. Tax Guarantors plan to leave Indonesia forever or intend to do that;
b. Tax Guarantors hand over goods owned or controlled in the framework of
termination or downsizing of corporate activities or jobs executed in Indonesia;
c. there are indications that tax guarantors will dissolve their business entities or
merge or expand businesses or hand over companies owned or controlled, or
execute other kinds of changes;
d. business entities will be dissolved by the state; or
e. third parties confiscate goods belonging to tax guarantors there are indications of
bankruptcy.
(3) The collection of tax by distress warrants shall be executed in accordance with the
provisions of laws in force."
21. The provision in Article 21 paragraphs (2), (3), (4) and (5) are amended, so that the Article 21
entirely reads as follows:
"Article 21
(1) The state shall have preemptive rights to collect tax on goods belonging to tax guarantors.
(2) The provision on the preemptive rights as meant in paragraph (1) shall cover principal tax,
administrative sanctions in the form of interest, fines, increase and costs of tax collection.
(3) The prior rights to collect tax shall be above all other kinds of such rights, expect for:
a. legal proceeding costs decidedly caused by a kind of punishment to auction
movable/immovable goods;
b. costs spent to rescue the said goods;
c. legal proceeding costs decidedly caused by auctions and settlement of
inheritance.
(4) The preemptive rights shall be lost after 2 (two) years have elapsed as from the date
issuance of tax collection letters, underpaid-tax assessment, additional underpaid-tax
assessment, decision on rectification, decision on objection, decision on appeals resulting
in an amounts of tax which must paid, unless in the two year period, distress warrants for
the payment are notified formally or postponement of payment is granted."
(5) In case of Distress Warrant for payment is notified formally, in 2 (two) years as meant in
paragraph (4), calculated from date of the Distress Warrant notification, or granted
postponement of payment in 2 (two) years, added by the postponement of payment
period."
22. The provision in Article 22 is amended so that the Article 22 entirely reads as follows:
"Article 22
(1) Rights to collect tax, including interest, fine, increase and cost of tax collection shall expire
after 10 (ten) years have elapsed as from the effective moment of tax due or expiration of
the tax period, part of the tax year or the relevant tax year.
(2) The expiration of tax collection as meant in paragraph (1) shall be cancelled in the case
of:
a. the issuance of warning letters and distress warrants;
b. the presence of acknowledgement of tax due from taxpayers directly and

LAW NO 16 TGL 02/08/2000
indirectly;
c. the issuance of underpaid-tax assessment as meat in Article 13 paragraph (5) or
additional underpaid tax assessment as meant in Article 15 paragraph (4)."
23. The provision in Article 23 paragraph (2) is amended and paragraphs (1) and (3) are abolished,
so that the Article 23 entirely read as follows:
"Article 23
(1) abolished
(2) Lawsuits of taxpayers or tax guarantors against:
a. the execution of distress warrants, instructions to execute confiscation, or
announcement of auctions;
b. decisions connected with the execution of taxation decisions, other than those
stipulated in Article 25 paragraph (1) and Article 26;
c. decisions on rectification as meant in Article 16 connected with tax collection
letters;
d. decisions as meant in Article 36 connected with tax collection letters;can only be
filed to the tax court."
(3) abolished"
24. The provision in Article 24 is amended, so that the Article 24 entirely reads as follows:
"Article 24
Procedures for the writing-off of tax claims and stipulation of the amounts written off shall be
regulated by a decree of the Minister of Finance."
25. The provision in Article 25 paragraphs (3), (4) and (5) are amended so as to entirely read as
follows:
"Article 25
(1) Taxpayers can only raise objections for the following matters to the Director General of
Taxation:
a. underpaid-tax assessments;
b. additional underpaid-tax assessments;
c. overpaid-tax assessments;
d. nil-tax assessments;
e. withholding or collection by the third parties on the basis of provisions of taxation
laws.
(2) The objections shall be raised in writing in the Indonesian language by mentioning
amounts of tax due or amounts of tax withheld or collected or amounts of losses to
calculation of taxpayers along with clear reasons.
(3) The objections shall be submitted in the period of 3 (three) months as from the date of
letters, date of withholding or collection as meant paragraph (1), unless if taxpayers can
show that the period can not be fulfilled because of conditions beyond their control.
(4) Objections failing to meet the requirements are meant in paragraph (1), (2) and (3) shall
not be considered letters of objections, thus being not taken into account.
(5) Evidence of receipt of letters of objections given by officials of the Directorate General of
Taxation appointed or evidence of dispatch of letters of objections through registered
letter shall become evidence of receipt of letters of objections.
(6) In the case of requests from taxpayers for purpose of submission of objections, the
Director General of Taxation shall give writing information on matters becoming the basis
for imposition of tax, calculation of losses, withholding or collection of tax.
(7) The submission of objections shall not postpone obligations to pay tax and collect tax."

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26. The provisions in Article 27 paragraph (2), (3) and (6) are amended, and paragraph (4) abolished
as to entirely Article 27 read as follows:
"Article 27
(1) Taxpayers can only raise applications for appeals to the tax arbitration agency against
decisions on objections stipulated by the Director General of Taxation.
(2) Decisions of the tax arbitration court shall not constitute decisions on public
administration.
(3) The applications as meant in paragraph (1) shall be submitted in writing in the Indonesian
language along with clear reasons in the period of 3 (three) months as from the date of
receipt of decisions, accompanied by copies of the decisions.
(4) Abolished.
(5) The submission of applications for appeals shall not postpone obligations to pay and
collect tax.
(6) The tax arbitration agency as meant Article 23 paragraphs (1) and (2) shall be regulated
by a law."
27. The provision in Article 27A is amended and made to become paragraph (1) and two new
provisions are supplemented to become paragraphs (2) and (3), so that the Article 27A entirely
reads as follows:
"Article 27A
(1) In the case of the submitted objections or applications for being acceptable partly of
wholly, as long as the tax due as meant in underpaid-tax assessments and/or additional
underpaid-tax assessments has already been paid which results in overpaid tax, the
excesses of payment shall be restituted plus an interest compensation of 2% (two
percent) per month for 24 (twelve four) months at the maximum, calculated from the date
of the payment resulting in overpaid tax up to the date of issuance of decisions on
objections or appeals.
(2) The interest compensation as meant in paragraph (1) shall also be granted to
overpayment of administrative sanctions in the form of a fine as meant in Article 14
paragraph (4) and/or interest as meant in Article 19 paragraph (1) on the basis of
decisions on reduction or abolition of administrative sanctions, as a result of the issuance
of decisions on objections or appeals partly or wholly accepting applications from
taxpayers.
(3) Procedure for calculation of amounts of restitution of overpaid tax and/or the granting of
the interest compensation shall be regulated by a decree of the Minister of Finance."
28. The provision in Article 28 is amended, so that the Article 28 entirely reads as follows:
"Article 28
(1) Individual taxpayers undertaking business activities or independent jobs and taxable
companies in Indonesia shall perform book keeping/accounting.
(2) Taxpayers exempted from performing the book keeping as meant in paragraph (1) but
they are obliged to record shall be individual taxpayers undertaking business activities or
independent work/jobs who according to provisions of taxation laws are permitted to
calculated net income by using norms of calculation of net income and individual
taxpayers who undertaken no business activities or independent work/jobs.
(3) The book keeping or recording shall be managed by observing good intention and
reflecting the real conditions or business activities.
(4) The book keeping or recording shall be managed in Indonesia by using Latin letters,
Arabic letters, rupiah denomination and compiled in the Indonesian language or other
foreign languages permitted by the Minister of Finance.
(5) The book keeping shall be managed by the principle of consistency and the accrual or

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cash system.
(6) Any change in models of book keeping and/or accounting year shall secure approval from
the Director General of Taxation.
(7) The book keeping shall at least consist of records of assets, liabilities, capital, income and
costs, as well as sales and purchase, so that amounts of tax due can be calculated.
(8) The book keeping in foreign languages and currencies other than the Rupiah can be
managed by taxpayers after securing licenses from the Minister of Finance.
(9) The recording as meant in paragraph (2) shall consist of data collected regularly on goods
turnover or revenue and/or gross income as the basis for calculation of amounts of tax
due, including income which is not a tax object and/or not subjected to final tax.
(10) Individual taxpayers not obliged to convey annual income tax return shall be exempted
from the obligation to perform bookkeeping and recording.
(11) Books, records, documents which become the basis for book keeping or recording and
other documents shall be maintained for 10 (ten) years in Indonesia, namely in business
places or domiciles by individual taxpayers or domiciles by taxable companies.
(12) Models of and procedures for the recording as meant in paragraph (2) shall be regulated
by a decision of the Director General of Taxation."
29. The provision in Article 29 paragraphs (2) and (4) are amended, so that the Article 29 entirely
reads as follows:
"Article 29
(1) The Director General of Taxation shall be authorized to examine for testing the
compliance with taxation obligations and for other purpose in the framework of the
implementations of taxation laws.
(2) For the purpose of examination, examining officers shall have identities of examiners and
be accompanied by letters of instructions to examine as well as showing them to
taxpayers being examined.
(3) Taxpayers subjected to examination shall be obliged:
a. to show and/or lend books or records, documents which become the basis for
them and other documents connected with income earned, business activities,
independent work of taxpayers or taxable objects.
b. to give opportunity to enter places or rooms deemed necessary and provide
assistance to facilities the examination.
c. to give information needed.
(4) In the case of in the disclosure of book keeping, recording or documents as well as
information asked, taxpayers being committed to certain obligations to keep them in
secrecy, the obligation to keep them in secrecy shall be ignored by requests for the
purpose of the examination as meant in paragraph (1)."
"Article 31
Procedures for examination shall be regulated by a decree of the Minister of Finance."
31. The provision in Article 32 paragraph (2) and (4) are amended and among paragraph (3) and (4)
are inserted 1 (one) paragraph that is paragraph (3a), so that the Article 32 entirely reads as
follows:
"Article 32
(1) In exercising rights and fulfilling obligations according to provision of taxation laws,
taxpayers shall be represented by:
a. executives in the case of companies;
b. persons or bodies in charge of settlement, in the case of companies in dissolution

LAW NO 16 TGL 02/08/2000
or bankrupt condition;
c. one of the heirs, executors of testaments to those managing estate in the case of
individual estate;
d. custodians or guardians in the case of children underage or persons in custody.
(2) The proxies as meant in paragraph 91) shall be responsible jointly and/or severally for
the payment of tax due, unless they can prove or convince of the Director General of
Taxation that they in their capacity are impossible to bear responsibility for the said tax
due.
(3) Individuals or companies can appoint proxies by letters of special authorization to
exercise rights and fulfill obligations according the provisions of taxation laws.
(3a) The executives as meant in paragraph (3) shall meet the requirements stipulated by a
decree of the Minister of Finance.
(4) The executives as meant in paragraph (1) letter a shall include persons decidedly having
authority to determine policies and/or make decisions in operation of companies."
32. The provision in Article 33 is amended, so that Article 33 entirely read as follows:
Article 33
The buyers of taxable goods or recipients of taxable services as meant in the Value Added Tax
Law of 1984 and amendments shall be responsible in share for the payment of tax as long as they
can show evidence that tax has already been paid."
33. The provision in Article 34 is amended and a new provision is inserted between paragraphs (2)
and (3) to become paragraph (2a), so that the Article 34 entirely reads as follows:
"Article 34
(1) Every official shall be prohibited from notifying other people of all matters are known or
informed to them by taxpayers in the framework of their positions or jobs to execute the
provisions of taxation laws.
(2) The prohibition as meant in paragraph (1) shall also be effective for experts appointed by
the Director General of Taxation to assist in the execution of provisions of taxation laws.
(2a) The provision as meant in paragraphs (1) and (2) shall be excepted in the case
of:
a. officials and experts acting as witnesses or expert witnesses in legal
proceedings
b. officials and experts giving information to other parties stipulated by the
Minister of Finance
(3) In the interest of the state, the Minister of Finance shall be authorized to grant written
licenses to the officials as meant in paragraph (1) and the experts as meant in paragraph
(2) for providing information, showing written evidence from and/or about taxpayers to
parties appointed.
(4) For the purpose of examination in criminal or civil cases in the court upon requests of
judges according Criminal and Civil Codes, the Minister of Finance can grant written
licenses to ask for written evidence and information on taxpayers which are owned by
them from the officials as meant in paragraph (1) and the experts as meant in paragraph
(2), written evidence and written information he has concerning the Taxpayer.
(5) The requests of judges as meat in paragraph (4) shall mention names of suspects or
defendants, information asked as well as connection between the said criminal or civil
cases and the information asked."
34. The provision in Article 36 paragraph (2) is amended so as to entirely read follows:
"Article 36

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(1) The Director General of Taxation can take the following measures:
a. to reduce or abolish administrative sanctions in the form of interest, fine and
increase which are owed according to the provisions of taxation laws in the case
of the sanctions being imposed due to mistakes of taxpayers or not due to
wrongdoings.
b. to reduce or cancel incorrect tax assessment.
(2) Procedures for reduction, abolition or annulment of tax due as meant in paragraph (1)
shall be regulated by a decree of the Minister of Finance."
35. A new provision is supplemented between Article 36 and 37 become Article 36A which reads as
follows:
"Article 36A
In the case of officers in the calculations and stipulation of tax according of taxation laws in force
thus inflicting losses on the state, the relevant tax officers shall be subjected to sanctions in
accordance with the provisions of laws in force."
36. The provision in Article 37 is amended so to Article 37 entirely read as follows:
"Article 37
Any change in amounts of interets compensation and administrative sanctions in the form of
interest, fines and increase, shall be regulated by a government regulation."
37. The provision in Article 38 is amended, so that Article 38 entirely read as follows:
"Article 38
Everybody because of negligence:
a. failing to convey tax returns; or
b. conveying tax returns, but the contents are not correct or complete, or accompanying
information whose contents are incorrect,thus being able to inflict losses on the state
revenue, shall be subjected to imprisonment of one year and/or a fine as high as twice the
amount of tax due which is not paid or underpaid, at the maximum."
"Article 39
(1) Everybody intentionally
a. not registering or abusing or using taxpayer code number without rights or
validation of taxable companies as meant in Article 2;or
b. not conveying tax returns; or
c. conveying tax returns and/or information whose contents are not correct or
complete; or
d. refusing the examination as meant in Article 29; or
e. showing books, records and other documents which are false or falsified so as to
seem true; or
f. not managing the book keeping or recording, not showing or not lending books,
records or other document; or
g. not remitting tax already withheld or collected,thus being able to inflict losses on
the state revenue, shall be subjected to imprisonment of 6 (six) years and a fine
of 4 (four) times the amount of tax due which nor paid or underpaid, at the
maximum.
(2) The sentence as meant paragraph (1) shall be doubled in the case of anybody again
committing taxation crime before one year elapses, starting from the date of serving the
imprisonment imposed.
(3) Everybody trying to commit crimes by abusing or using taxpayer code numbers without

LAW NO 16 TGL 02/08/2000
rights or validation of taxable companies as meant in paragraph (1) letter a or failing to

convey tax returns and/or conveying tax returns whose contents are not correct or not
complete as meant in paragraph (1) letter c in the framework of submitting applications
for restitution or making tax compensation shall be sentenced by a maximum
imprisonment period of 2 (two) years and a fine of four times the amounts of restitution
applied for and/or compensation made by Taxpayers.
"Article 41
(1) Officials because of their negligence failing to meet the obligation to keep in secrecy the
matters as meant in Article 34 shall be sentenced by a maximum imprisonment period of
one year and maximum fine of Rp 4,000,000.00 (four million rupiah).
(2) Officials intentionally not fulfilling their obligations or anybody causing officials fail to meet
the obligation as meant in Article 34 shall be sentenced by a maximum imprisonment
period 2 (two) years and a maximum fine of Rp 10,000,000.00 (ten million rupiah).
(3) Indictments against the crimes as meant in paragraph (1) and (2) shall only be done basis
of complaints from people whose secrecy are violated."
40. The provisions in Article 41A is amended so as to Article 41A entirely read as follows:
"Article 41A
Everybody who according to Article 35 of this law is obliged to give information or evidence asked,
but the relevant person intentionally provides no information or evidence, or provide untrue
information or evidence shall be sentenced to a maximum imprisonment period of one year and a
maximum fine of Rp 10,000,000.00 (ten million rupiahs)."
41. The provision in Article 41B is amended so as to Article entirely read as follows:
"Article 41B
Everybody intentionally or causing difficulty to investigations into taxation crimes shall be
sentenced to a maximum imprisonment period of 3 (three) years and a maximum fine of Rp
10,000,000.00 (ten million rupiahs)."
"Article 44
1) Certain Civil Servants within the Directorate General of Taxation shall be granted special
authority as investigators to probe taxation crimes, as meant in the Criminal Code in
force.
2) The Authority of the Investigators as meant in paragraph (1) shall be as follows:
a. to receive, seek, collect and examine information or reports with taxation crimes
so that the information or reports become more complete and clearer;
b. to examine, seek and collect information on individuals or companies with regard
to the truth of actions committed in taxation crimes;
c. to ask information and material of evidence from individuals or companies
connected with taxation crimes;
d. to examine books, records and other documents connected with taxation crimes;
e. to conduct a search for obtaining evidence from individuals or companies
connected with taxation crimes;
f. to ask help from experts in the framework of the execution of investigation into
taxation crimes;
g. to stop and/or prevent anybody from leaving rooms or upon the execution of
investigation and to examine identities of persons and/or documents carried out
meant in letter e;
h. to take pictures of anybody connected with taxation crimes;

LAW NO 16 TGL 02/08/2000
i. to summon people for testimony and examination as suspects or witnesses;

j. to stop investigation.
k. to take other necessary actions to ensure the smooth investigations into taxation
crimes according to applicable laws.
(3) The investigators as meant in paragraph (2) shall notify the commencement of
investigation and convey results of the investigation to public prosecutors through
investigating officials of the Indonesian Police Force, according to provisions stipulated in
the Criminal Code in force.#
43. A new provision is supplemented between Article 47 and CHAPTER XI to become Article 47A
which read as follows:
"Article 47A
The provisions in Law Number 6 Year 1983 on Taxation General Provisions and Procedures as
already amended by Law Number 9 Year 1994 shall be effective for all taxation rights and
obligations not yet settled."
Article II
This law shall be referred to as "Law on the Second Amendment to Law concerning Taxation General
Provisions and Procedures."
Article III
This law shall come into force as from January 1, 2001.
For public cognizance, this law shall be promulgated by placing it in Statute Book of the Republic of
Indonesia.
Ratified in : Jakarta
On : August 2, 2000
THE PRESIDENT OF THE REPUBLIC OF INDONESIA

sgd
ABDURRAHMAN WAHID
Promulgated in Jakarta
On August 2, 2000
THE STATE SECRETARY

sgd
DJOHAN EFFENDI
STATUTE BOOK OF THE REPUBLIC OF INDONESIA YEAR 2000 NUMBER126

LAW NO 16 TGL 02/08/2000
ELUCIDATION
ON
LAW NUMBER 16 YEAR 2000
CONCERNING
THE SECOND AMENDMENT TO LAW NUMBER 6 YEAR 1983 ON TAXATION GENERAL
PROVISIONS AND PROCEDURES
I. GENERAL
1. The taxation regulation stipulating taxation general provisions and procedures which
comes into force as from January 1984 is Law Number 6 Year 1983 on general provisions
and taxation procedures. The law is based on the state philosophy Pancasila and the
Constitution of 1945 which highly uphold rights of citizens and place taxation obligations
as a state obligations and a means of participation of the public in financing the state and
national development.
The law contains taxation general provisions procedures which are principally effective for
material tax laws, other wise the relevant tax laws have already regulated them selves
taxation general provisions general provisions and procedures.
2. In the implementation of Law Number 6 Year 1983 on General Provisions and Taxation
Procedures as already amended by Law Number 9 Year 1994, realized that there are
matters not yet accommodated, it is necessary to make improvement according to social
and economic developments as well as Government Policies. Besides, public
expectations to create a more capable and clean taxation apparatus are still taken into
account by various provisions of a supervisory nature in this law.
3. The philosophy and foundation which become the background of and the basis for this
law area reflected in provisions stipulating systems and mechanisms become special
characteristics and features in the Indonesian taxation system because the law will
function as #general provisions# for other taxation laws.
The special characteristics and features of the tax collection system are as follows:
a. tax collection is manifestation of direct and collective dedication and participation
of tax payers in fulfilling taxation obligations needed for financing the state and
national development;
b. responsibility for the obligation to collect tax as reflection of obligations in the
taxation sector lies with members of taxpayer society themselves. The
government, in this case the taxation apparatus, is functionally obliged to foster,
serve and supervise the fulfillment of taxation obligations on the basis of
provisions stipulated in taxation laws.
c. members of taxpayers society are entrusted to exercise community mutual
assistance through a self-assessment method of calculation, payment and
reporting, so that through the system, administration of taxation can be executed
in orderly, controllable and simple manners and easy to understand by members
of Taxpayer society.
The tax collection system means that the stipulation of amounts of tax due is entrusted to
taxpayers themselves and they are obliged to report the amounts of tax due already paid
regularly in accordance with provisions of taxation laws. Under the system, the
administration is expected not to heavily burden taxpayers and bureaucratic red tape will
be avoidable. In line with expectations in efforts to enhance the public service, the
technical administrative authority of the Director General of Taxation can be delegated to
the subordinate apparatus.
This law outlines that administration of taxation has an active in the execution of takes of
fostering, service, supervision and imposition of sanction according to taxation laws. The

LAW NO 16 TGL 02/08/2000
fostering of taxpayers can be executed by various efforts, like the provision of counseling
of taxation knowledge through mass media and direct illumination to the public
4. With the principles of legal certainty, justice and simplicity being held firmly, the direction
and objectives of improvement of this taxation law refer to the following principal policies:
a. to realize independence in the state and national development financing whose
main source comes from tax revenue;
b. to support development efforts equitably, to boost investments equitably
throughout the territory of the Republic of Indonesia, especially to boost the
development of remote areas which have so far been considered backward and
late in their progress, in the framework of both equal distribution of development
and enhancement of efficiency in the use of natural resources as well as the
increase in tax revenue over a long term.
c. to support efforts aimed at driving up exports, particularly exports of non-oil/gas
commodities, manufactures and services in the framework of the increase in
foreign exchange earnings.
d. to support efforts aimed at boosting the development of small-scale businesses
to increase their potential optimally, and in the framework of alleviation of part of
society from poverty;
e. to support efforts for the development of human resources, science and
technology;
f. to support efforts to preserve ecosystems, natural resources and the
environment;
g. to support efforts for ensuring better justice and participation of society in the
financing of development according to their capacity; and
h. to support efforts aimed at creating a more capable and clean taxation apparatus,
enhancing service for taxpayers, including simplified and facilitated procedures in
the fulfillment of taxation obligations, intensified supervision over the fulfillment of
the taxation obligations as well as better enforcement of the existing provisions of
laws.
II. ARTICLE BY ARTICLE
Article I
Letter 1
Article 1
Sufficiently clear
Letter 2
Sufficiently clear
Letter 3
Article 2
Paragraph (1)
Based on the self-assessment system, all taxpayers are obliged to
register themselves at office of the Directorate General of Taxation for
registrations as taxpayers and at the same time obtaining taxpayer code
numbers.
The obligation is also effective for married women subjected to tax
collection individually because they live separately on the basis of
decisions of judges or this is intended in writing on the basis of
agreements on separation of income and property.
Since taxpayers code numbers are a means in taxation administration
used as personal identities or identities of taxpayers, every taxpayer is

LAW NO 16 TGL 02/08/2000
only given one taxpayer code number. Apart from that, taxpayer code
numbers are also used for ensuring the orderly tax payment and
supervision over taxation administration. In the case of taxation
documents, taxpayer code numbers are subjected to sanction in
accordance with laws in force.
Paragraph (2)
Taxpayers being companies/entrepreneurs/employers subjected to
collection of value added tax on the basis of the Value Added Tax Law of
1984 and amendments, must report their businesses to be validated as
taxable entrepreneurs.
Individual entrepreneurs are obliged to report their businesses to offices
of the Directorate General of Taxation whose working areas comprising
domiciles of entrepreneurs and places where the businesses are
executed. Corporate employers must report their businesses to offices of
the Directorate General of Taxation whose working areas oversee
domicile of employers or places where the businesses are executed.
Therefore, Taxable Entrepreneur or entity who have place of working
business in several offices of the Directorate General of Taxation shall
their businesses to offices of the Directorate General of Taxation whose
working areas oversee domicile of employers or places where the
businesses are executed.
Validation of taxable companies/employers functions to not only as
certain the real identities of taxable companies, but also exercise rights
and obligations in the field of Value Tax and Sales Tax on Luxury Goods
as well as to supervise taxation administration.
Taxpayers already fulfilling the requirement for taxable companies,
employers but they do not report their businesses to be validated as
taxable companies, employers are subjected to sanctions to taxation
laws.
Paragraph (3)
In addition to the places as meant in the offices (1) and (2), the Director
General of Taxation can determine other offices of the Directorate
General of Taxation as registration places for certain taxpayers and
taxable companies/employers for obtaining taxpayer code numbers
and/or validation of taxable companies/employers.
Apart from that, individual taxpayers being certain entrepreneurs, namely
individual taxpayers having business place in several places, like
electronic goods traders having shops in shopping centers, are also
obliged to register at offices of the Directorate General of Taxation whose
working areas cover business places of the taxpayers are conducted.
Paragraph (4)
Taxpayer code numbers and/or functional validation of taxable
companies/entrepreneurs/employers can be issued to taxpayers or
taxable companies/entrepreneurs/employers failing to meet the obligation
to register themselves and/or report their businesses. The Issuance can
be done if based on date obtained or owned by the Directorate General
of Taxation, the individual entrepreneurs or companies/employers have
already fulfilled the requirements for obtaining taxpayer code numbers
and/or validating as taxable companies.
Paragraph (5)
The obligation to register themselves for obtaining taxpayer code
numbers and the obligation to report businesses for securing validation of
taxable employers have the period limited, because it connects with the

LAW NO 16 TGL 02/08/2000
moment of tax due and obligation bearing tax due. Applications for
abolition of taxpayer code numbers and/or revocation of validation of
taxable employers must be settled in 12 (twelve) months as from the date
of receipt of complete documents.Provisions on the period of registration
and reporting, procedure for granting and revocation of taxpayer code
numbers as well as validation and revocation of validation of taxable
employers are stipulated by a decision of the Director General of
Taxation.
Letter 4
Article 3
Paragraph (1)
For taxpayers, tax returns function as a means of reporting and
accounting for the calculation of the real amounts of tax due for taxpayers
and reporting the following matters:
- payment or settlement of tax already executed themselves
and/or through withholding or collection by other parties for one
tax year or part of the tax year;
- income which constitutes tax objects or non-tax objects;
- assets and liabilities;
- payment of amounts withheld or collected with regard to the
withholding or collection of tax on other individuals or statutory
bodies for one tax period, stipulated by taxation laws in force.
For Taxable entrepreneurs, tax returns function as a means of reporting
and accounting for the calculation of the real amounts of Value Added
Tax and Sales Tax on Luxury Goods and reporting of the following
matters:
- crediting of input tax to output tax;
- payment or settlement of tax already executed themselves by
taxable employers and/or through other parties in one tax period,
stipulated by taxation laws in force;
- for tax withholders or collectors, tax returns function as a means
of reporting or accounting for amounts of tax withheld or
collected and remitted.
Completing tax return means the completion of forms of tax returns
correctly, clearly and completely according to directives provided on the
basis of taxation laws in force.
The incorrect completion of tax return resulting in underpaid tax, is
subjected to fanctions according taxation laws.
Paragraph (1a)
Sufficiently clear
Paragraph (2)
In the framework of providing service and facilities for taxpayers, forms of
tax returns are made available in offices within the Directorate
General of Taxation and other places stipulated by the Director General
of Taxation which are easily accessible by Taxpayers.
Paragraph (3)
This paragraph stipulates the deadline of conveyance of tax returns
considered quite adequate for taxpayers to prepare all matters connected
with the payment of tax and settlement of book keeping.

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Certain taxpayers stipulated by a decree of the Minister of Finance are

allowed to report several tax periods in on tax return.
Paragraph (4)
If individual taxpayers or taxable companies fail to convey or prepare
annual financial statements or corporate balances along with profit/loss
statements in the period already stipulated in paragraph (3) letter b,
because of the wide range of business activities and technical problems
in compilation of financial statements, difficulties to meet the deadline of
completion and the need for relaxation of the period already stipulated,
the taxpayers or taxable companies can submit applications for the
extension of period of conveyance of annual income-tax return. The
period of conveyance of annual income-tax returns is extended for 6 (six)
months at the maximum.
Paragraph (5)
In order to prevent anybody from evading and/or extending the period of
payment of tax due in one tax year which must be paid before the period
of dispatch of annual tax returns, it is necessary to stipulated
requirements resulting in the imposition of sanctions in the form of fines
on taxpayers intended to extend the periods of conveyance of annual
income-tax returns.
The requirements are obligations to give up written statements on
amounts of tax which must be paid on the basis of provisional calculation
in one tax year, as the attachment to applications for postponement of
obligations to convey Annual Income Tax Returns.
Paragraph (5a)
In the framework of fostering of taxpayers failing to convey tax returns up
to the period already stipulated warning letters are given the relevant
taxpayers.
Paragraph (6)
Since tax returns function as a means of taxpayers to report and account
for the calculation of amounts of tax and payment, in the framework of
ensuring uniformity and facilitating the completion and administration,
models and contest of tax returns are stipulated by a decree of the
Annual income-tax returns at least contain amounts of turnover, income,
taxable income, underpaid or overpaid tax, as well as assets and
obligations outside business activities or independent jobs by individual
Taxpayers.
Taxpayers obliged to undertake book keeping must also accompany
financial statements in the form of balances and profit/loss statements as
well as other kinds of information needed for calculating amounts of
Taxable Income.
Value Added Tax Returns at least contain amounts of bases for the
imposition of tax, output tax, and creditable input tax and underpaid or
overpaid tax.
The tax returns must be accompanied by information and documents
which can be in the form of letters of authorization, certificates of
marriage with assets and income separated, documents connected with
import and export as well as tax payments.
Paragraph (7)
Tax returns signed along with attachments are a unit which constitutes
the element of validity of tax returns. Therefore, in the case of tax returns

LAW NO 16 TGL 02/08/2000
being conveyed but they are not or not fully meet the required provisions,
the tax returns are considered not to be conveyed.
Paragraph (8)
Every taxpayer is principally obliged to convey tax returns. By taking into
efficiency and other considerations, the Minister of Finance can stipulate
income taxpayers exempted from the obligation to convey tax returns,
like individual taxpayers receiving or earning income lower than taxable
income but they are obliged to have Taxpayer Code Number because of
certain interests.
Letter 5
Article 4
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Paragraph (5)
Procedures for the receipt and processing of tax returns contain matters
connected with examination of completeness, granting of receipts,
classification of overpaid, underpaid and nil-tax returns, procedures for
recording and follow up to management, which are stipulated by a decree
of the Minister of Finance.
Letter 6
Article 6
Paragraph (1)
Sufficiently clear
Paragraph (2)
In the framework of enhancing service for taxpayers and in line with
developments of information technology, taxpayers need other methods
to meet the obligation to convey tax returns other than through post
offices by registered mail. In relation thereto, the methods need to be
stipulated by a decision of the Director General of Taxation.
Paragraph (3)
Evidence of receipt and date of dispatch of tax returns conveyed through
post offices are evidence of receipt as long as the tax returns are
complete, fulfilling the requirements as meant in Article 3 paragraphs (1),
(1a) and (6).
Letter 7
Article 7
Paragraph (1)
In the interest of orderly taxation administration and in order to maintain
discipline of taxpayers, the taxpayers failing to convey tax returns in the
period stipulated are subjected to an administrative sanction in the form
of a fine of Rp 50,000.00 (fifty thousand rupiahs) in the case of periodical

LAW NO 16 TGL 02/08/2000
tax returns and Rp 100,000.00 (one hundred thousand rupiahs) in the

case of annual tax returns.
Paragraph (2)
The Minister of Finance is authorized to exempt certain taxpayers from
the administrative sanction in the form of the fine as meant in paragraph
(1), like non-effective taxpayers and individual taxpayers whose net
income is lower than untaxable income.
Letter 8
Article 8
Paragraph (1)
Taxpayers making mistakes in the completion of the returns still have
rights to rectify on the basis of self intention for 2 (two) years after the
expiration of the tax period, part of the tax year or tax year with the
condition that the Director General of Taxation has not yet started to
examine. Starting to examine means the moment of conveyance of
notifications on tax examination to taxpayers or representatives or
proxies or employees or upon the receipt by family members of taxpayers
already grown up.
The stipulation of the period of rectification is deemed sufficient in terms
of time for taxpayers to examine and rectify tax returns on the one side
the time remains sufficient to the Director General of Taxation to provide
service and supervise the rectification made by taxpayers before the
deadline of expiration elapses.
Paragraph (2)
The rectification of tax returns on the basis of their own intention results
in consequences to the calculation of amounts of tax due and the
amounts of calculation of tax payment change from the previous
amounts.
In the case of the rectification resulting in shortages of tax payment,
taxpayers are subjected to an administrative sanction in the form of a fine
of 2% (two percent) per month.
The interest owed to underpaid tax is calculated as from the date of
expiration of period of conveyance of tax returns up to the date of
payment because of rectification/correction of Tax Returns.
Paragraph (3)
In the case of taxpayers violating the provision as meant in Article 38, as
long as investigation has not yet been executed eventhough examination
has already been carried out and taxpayers have already disclosed their
mistakes and at the same time settled the actual tax due along with a
sanction in the form of a fine of 2% (two percent) of the amount of
underpaid tax, investigation will not be conducted on the relevant
taxpayers.
However, in the case of investigation being already executed and the
commencement of the investigation being notified to public prosecutors,
the opportunity to rectify on the basis of their own intention is closed to
the relevant taxpayers.
Paragraph (4)
Eventhough the two year period as meant in paragraph (1) has already
ended and the Director General of Taxation has not yet issued tax
assessments, the opportunity is still given to taxpayers and not yet
rectifying tax returns to disclosed the untrue completion of tax returns
already conveyed, which can be in the form of annual tax returns or

LAW NO 16 TGL 02/08/2000
periodical tax returns for the previous years or periods. The disclosure of
the untrue completion of the tax returns is limited to the following matters:
a. amounts of tax not yet paid to be bigger; or
b. losses on the basis of taxation provisions to become smaller; or
c. amounts of assets to become bigger; or
d. amounts of capital to become bigger.
Paragraph (5)
Sufficiently clear
Paragraph (6)
If taxpayers receive decisions on objections or appeal resulting in
different fiscal losses from tax assessments for which objection are
raised or decisions on objections for which appeal is filed, the relevant
taxpayers still have opportunity to rectify annual income tax returns in the
following year, eventhough the year period after the tax year or part of the
year elapse with the provision that the Director General of Taxation has
not yet examined taxpayers in connection with the said tax returns.
The following examples are provided for clarification:
a. PT A conveys an annual income tax return of 2002 on March 31,
2003, certifying a fiscal loss Rp 100,000,000.00 but the tax is not
overpaid.
The tax is later examined and a tax assessment is issued on
January 16, 2006, certifying that the fiscal loss is Rp
50,000,000.00.
The taxpayers raise an objection for the tax assessment on
March 16, 2006. A decision on objection stating that the fiscal
loss of PT A in 2002 increases to Rp 110,000,000.00 is issued
on November 10, 2006.
PT A conveys an annual income tax return for 2003 on March 26,
2004, certifying that:
Net income Rp 200,000,000.00
----------------------
Compensation for the loss on the basis
of annual income tax return of 2002 Rp 100,000,000.00
----------------------
Taxable income Rp 100,000,000.00
============
The annual income tax return of 2003 is rectified in accordance
with the provision in Article 8 paragraph (6) on November 21,
2006 so as to become as follows:
Net income Rp 200,000,000.00
Loss according to a decision on
objection Rp 110,000,000.00
------------------------
============
b. PT B convey an annual income tax return of 2002 on March 31,
2003, certifying a fiscal loss of Rp 15,000,000.00 but the tax is

LAW NO 16 TGL 02/08/2000
not overpaid
That tax is later examined and a tax assessment is issued on
January 16, 2006, certifying that the fiscal loss is Rp
100,000,000.00 A decision on objection rejection the objection
raised by the taxpayers is issued on November 10, 2006.
The taxpayers file an appeal for the decision on objection on
December 22, 2006.
A decision on appeal stipulating that the loss of the taxpayer
increases to Rp 160,000,000.00 is issued on May 18, 2007.
PT B convey an annual income tax return for 2003 on March 26,
2004, certifying that:
Net income Rp 250,000,000.00
Compensation for the loss on the basis
of annual income tax return of 2002 Rp 150,000,000.00
---------------------(-)
============
The annual income tax return of 2003 is rectified in accordance
with the provision in Article 8 paragraph (6) on July 21, 2007 so
as to become as follows:
Net income Rp 250,000,000.00
Loss according to a decision in
objection Rp 160,000,000.00
-------------------- (-)
============
Letter 9
Article 9
Paragraph (1)
The period payment and remittance of tax due for one tax moment or
period is stipulated by the Minister of Finance with the period not
exceeding 15 (fifteen) days after the effective moment of tax due or
expiration of tax period. The lateness in payment and remittance is
subjected to administration sanction according to the provision in force.
Paragraph (2)
In the case of upon the completion of annual income tax returns,
underpaid tax turning out to remain existent, the shortages of tax
payment must be settled not later than 25th of the third month after the
expiration of the tax year or part of the tax year before the conveyance of
the said annual income tax returns.
For example, an annual income tax returns is conveyed on March 31, the
shortages of payment of tax due and final remittance might have been
settled not later than March 25, before the annual income tax return is
conveyed.
Paragraph (2a)
This paragraph regulates the imposition as a result of the lateness in the
payment or remittance of tax. For a clear method of calculation of

LAW NO 16 TGL 02/08/2000
interest, the following example is provided:

- Periodical installment of income tax-article 25 in 2002 is Rp
10,000,000.00 per month
- Periodical installment of tax for May 2002 as paid on June 28,
2002 and reported on June 19, 2002
- A tax collection letter is issued on July 15, 2002
- Interest in the tax collection letter is rounded up to one month= 1
x 2% x Rp 10,000,000.00 = Rp 200,000.00
Paragraph (3)
Sufficiently clear
Paragraph (4)
Based on applications from taxpayers, the Director General of a Taxation
can approve the said taxpayers to pay in installments or postpone the
payment of tax due, including shortages of payment of income tax,
eventhough the date of maturity of payment has already been stipulated.
The relaxation is provided carefully for 12 (twelve) months at the
maximum and limited to taxpayers really facing difficulties in liquidity.
Letter 10
Article 10
Paragraph (1)
The Directorate General of Taxation is prohibited from receiving tax
remittance from taxpayers. All kinds of state tax remittance must be
transferred to the state cash through payment points stipulated by the
Minister of Finance, like post offices and/or state or regional
administration-owned banks or other payment points stipulated by the
Efforts to expand payment points of tax easily accessible by taxpayers
are intended to facilitate taxpayers to fulfill their liabilities and at same
time to avoid the feel of reluctance in paying tax.
Paragraph (2)
Procedures for payment, remittance and reporting of tax stipulated by a
decree of the Minister of Finance as well as procedures for installment
and postponement of payment of tax are expected of tax expected to
facilities the payment of tax and the administration.
Letter 11
Article 11
Paragraph (1)
In the case of the amount of actual tax due already being calculated with
amounts of tax credits, but the result shows a positive difference (the
amount of tax credits being higher than the amount of tax due) or tax
which should not be paid already being paid, taxpayers are entitled to ask
for restitution of the overpaid tax with the provision that the relevant
taxpayers have no tax due.
In the case of taxpayers still having tax due which cover all kinds of tax in
the office and branches, the overpaid tax is calculated first with the tax
due and the overpaid tax can only be restituted to taxpayers if there is a
positive difference.
Paragraph (2)
In order to provide legal certainly for taxpayers and to ensure orderly

LAW NO 16 TGL 02/08/2000
administration, the Director General of Taxation stipulates that the

restitution must be done not later than one month:
a. from the date of receipt of written applications for the restitution
of overpaid tax, in the case of the overpaid-tax assessments as
meant in Article 17;
b. from the date of issuance, in the case of the overpaid-tax
assessment as meant in Article 17B;
c. from the date of issuance, in the case of the decisions on
preliminary restitution of overpaid tax as meant in Article 17;
up to the moment of issuance of instructions to pay overpaid tax.
Paragraph (3)
In order to ensure the balance of rights and obligations of taxpayers with
quick service by the Directorate General of Taxation, this paragraph
stipulates that the government gives interest as high as 2% (two percent)
per month to the relevant taxpayers as an incentive to the lateness in the
restitution of overpaid tax from the period as meant in paragraph (2),
starting from the date of expiration of the one-month period to the
moment of payment, upon the issuance of instruction to pay overpaid tax.
Paragraph (4)
Sufficiently clear
Letter 12
Article 12
Paragraph (1)
Tax is principally owed upon the arising of taxable objects, but for interest
of taxation administration the effective moment of tax due is:
a. upon certain moment, in the case of income tax which is withheld
by third parties;
b. at the end of period, in the case of income tax on employees
which is withheld by employers, or on business activities by other
parties, or on value added tax and sales tax on luxury goods by
taxable entrepreneurs/companies.
c. at the end of tax year, in the case of income tax.
Taxpayers must remit amounts of tax due which has already been
withheld, collated or which must pay themselves by taxpayers upon
moment of period of settlement of payment of payment as meant is
Article 19 paragraph (2) to the state cash through post offices and/or
state-or regional administration-owned banks or other payment points
stipulated by the Minister of Finance.
Pursuant to this law, the Directorate General of Taxation is not obliged to
issued tax assessment of the whole tax returns already conveyed by
taxpayers. Tax assessment is only issued to certain taxpayers due the
untrue completion of tax returns or because fiscal data not reported by
taxpayers are found out.
Paragraph (2)
This provision stipulated that tax assessment and taxation administration
are not necessary to give to taxpayers already calculating and paying tax
due correctly on the basis of provisions of taxation laws in force as well
as reporting it in tax returns.
Paragraph (3)
In the case of on the basis of results of examination or other kinds of

LAW NO 16 TGL 02/08/2000
information, amounts of tax calculated or reported in the relevant tax

returns being found out to be untrue later, e.g. the charging of costs turns
out to exceed the actual amounts, the Director General of Taxation
stipulates amounts of actual tax due according to provisions of taxation
laws.
Letter 13
Article 14
Paragraph (1)
Sufficiently clear
Paragraph (2)
According to this paragraph, legal power of tax collection letters is treated
such as tax assessment so that the collection can also be done by
distress warrants.
Paragraph (3)
This paragraph stipulated the imposition of administrative sanction in the
form of interest on tax collection letters issued because of:
- audits of tax returns resulting in underpaid tax, as a result of
misprints and miscalculations.
- unpaid or underpaid Income Tax in the current year.
The clear method of calculation is provided in the following examples:
1. Result of audits of tax returns
After being audited, an annual income tax returns for 2002
conveyed on March 31, 2003 turns out to contain a
miscalculation resulting in underpaid tax of Rp 1,000,000.00.
Based on the underpaid income-tax, a tax collection letter is
issued on June 13, 2003 with the calculation as follows:
- Underpaid income-tax = Rp 1,000,000.00
- Interest = 3x2%xRp 1,000,000.00 = Rp 60.000.00
--------------------- (+)
- Amount which must be paid = Rp 1,060,000.00
=============
2. Unpaid or underpaid income-tax in the current year For example,
monthly income tax-article 25 in 2002 totaling Rp 100,000,000.00
matures in every 15th. The tax is paid on time as much as Rp
40,000,000.00 in June, 2002.
Based on the underpaid income tax-article 25, a tax collection
letter is issued on September 18, 2002 with the calculation as
follows:
- Underpaid income tax-article 25
in June 2002 = Rp 60,000,000.00
- Interest = 3x2%xRp 60,000,000.00
= Rp 3, 600,000.00
-------------------(+)
- Amount which must be paid = Rp 63,000,000.00
===========
Paragraph (4)

LAW NO 16 TGL 02/08/2000
In the case of taxable entrepreneurs/companies failing to report their

business activities for validation as taxable entrepreneurs/companies,
they have already violated their obligation without good intention and
ignored trust already put in them. In relation thereto, in addition to the
obligation to remit tax due by preventing them from calculation input tax,
the relevant entrepreneurs/companies are also subjected to an
administrative sanction in the form of a fine of 2% (two percenT0 of the
basis for imposition of tax arising before the entrepreneurs/companies
are validated as taxable entrepreneurs/companies. Apart form that, the
provisions of taxation laws also stipulate that tax invoices may only be
made out by taxable companies. he prohibition of non taxable
entrepreneurs/companies from making out tax invoices is intended to
protect buyers from tax which should not be collected, and in relation
thereto, the said entrepreneurs/companies are subjected to a sanction in
the form of an administrative fine. The same sanction applies to taxable
entrepreneurs/companies obliged to make out tax invoices, but they do
not execute the obligation, do not complete tax invoices in full or they
make out invoices but not on time.
Letter 14
Article 15
Paragraph (1)
In order to accommodate possibilities of occurrence of an underpaid-tax
assessment which has already turned out to be stipulated lower or have
already been restituted that should not be done as already stipulated in
an overpaid tax assessment or tax due in a nil tax assessment in 10 (ten)
years as from the moment of tax due, expiration of the tax period, part of
tax year or tax year.
Additional underpaid-tax assessment constitute corrections of the
previous tax assessment. Additional underpaid-tax assessment are
issued in the case of tax assessment already being issued. In another
word, tax assessment nay not be issued before being preceded by the
issuance of tax assessments. The issuance of additional underpaid-tax
assessments is done with the provision that there are new data and/or
data not yet disclosed previously which result in the addition to the
amount of tax due in the previous tax assessments. In line with it, after
the issuance of overpaid-tax assessments as a result of the 12-month
period as meant in Article 17B elapses, additional underpaid-tax
assessments are only issued in the case of new data and/or data not yet
disclosed previously being found out. In the case of more data previously
not yet disclosed upon the issuance of underpaid-tax assessment and/or
new data which are later informed by the Directorate General of Taxation
being found out, additional underpaid-tax assessments still can be issued
again.
New data mean data on information an all things needed for calculating
the amount of tax due which are not yet notified by taxpayers upon the
previous stipulation, in both accounting books of companies given up
upon the examination. Data previously not yet disclosed mean data
and/or other kinds of information on all things needed for calculating the
amount of tax that:
a. taxpayers do not disclose in tax returns along with attachments
(including financial statements); and/or
b. upon the examination for the previous stipulation, taxpayers do
not disclose data and/or give other kinds of information truthfully,
completely and in detail thus making fiscal officers impossible to
apply provisions of taxation laws correctly to the calculation of tax

LAW NO 16 TGL 02/08/2000
due.
Even though taxpayers have already notified in tax returns or disclose
upon the examination, but in the case of they are notifying or disclosing in
such a way thus making fiscal officers impossible to calculate the amount
of tax due correctly which causes the amount of tax due to be lower than
the actual amount, the matter is included in the definition of data
previously not yet disclosed, for example:
1. In a tax return and/or financial statement, advertisement costs
are mentioned as much as Rp 10,000,000.00, where the costs
actually consist of advertisement costs in media totaling Rp
5,000,000,000 and the remaining Rp 5,000,000.00 are donations
or prizes.
In the case of taxpayers not disclosing the detail upon the
previous stipulation so that fiscal officers make no correction
over expenditure in the form of donations to prizes, which makes
tax due unable to calculate, data on the expenditure in the form
of the donations or prizes is categorized as data previously not
yet disclosed.
2. A tax return an/or financial statement mentions that the
classification of fixed assets which are amortized without details
of assets in every group, so do taxpayers not disclose the details
upon the examination for the previous calculation, thus fiscal
officers can audit the truth to the classification.
The classification actually contain mistakes, e.g. assets which
should be included in the group of non-building tangible assets of
group 3 are classified into group 2.
Since taxpayers do not disclose details of the classification upon
the previous statement, mistakes in the classification are not
corrected, and a result, tax due can not be calculated correctly. In
the case of mistakes being found out later, data on the
classification of the assets are data previously not yet disclosed.
3. Taxable entrepreneurs/companies purchase a number of goods
from other taxable entrepreneurs/companies and tax invoices of
the purchase are issued by taxable entrepreneurs/companies
being sellers. Part of the goods are used for activities directly
connected their business activities and the remainder is used for
activities indirectly connected with their business activities. All tax
invoices are credited as impute tax by taxable entrepreneurs
being buyers.If taxable entrepreneurs/companies do not disclose
details of the use of the goods truthfully upon the previous
statement so that the input tax credited is not corrected and as a
result, value-added tax due can not be calculated correctly, but
data or information on mistakes in crediting of input tax indirectly
connected with the said business activities are later found out,
the said data or information are data not yet disclosed previously.
Paragraph (2)
If new data and/or data not yet disclosed which have not yet been
calculated as the basis for stipulation are still found out after assessment
have already been issued, the underpaid tax in collected by additional
underpaid-tax assessments plus ad administrative sanction in the form of
the increase as high as 100% (one hundred percent) of the amount of
underpaid tax.
Paragraph (3)

LAW NO 16 TGL 02/08/2000
Sufficiently clear
Paragraph (4)
Dalam hal Wajib Pajak dipidana karena melakukan tindak pidana di
bidang perpajakan berdasarkan putusan Pengadilan yang telah
memperoleh kekuatan hukum tetap, Surat Ketetapan Pajak Kurang
Bayar Tambahan tetap dapat diterbitkan, ditambah sanksi administrasi
berupa bunga sebesar 48% (empat puluh delapan persen) dari jumlah
pajak yang tidak atau kurang dibayar, meskipun jangka waktu sepuluh
tahun sebagaimana ditentukan dalam ayat (1) dilampaui.
In the case of taxpayers being sentenced because of taxation crimes on
the basis of court decisions already having permanent legal power,
underpaid tax assessment still can be issued, plus an administrative the
ten-year period as meant in paragraph (1) elapses.
Letter 15
Article 16
Paragraph (1)
Pursuant to this paragraph, rectification of tax assessment is done in the
framework of executing good government tasks so that human errors or
mistakes in tax assessments need to be rectified accordingly. The errors
and mistakes characteristically contain no conflicts between fiscal officers
and taxpayers.
In the case of errors or mistakes being found out by both fiscal officers
and applications from taxpayers, the errors or mistakes must be rectified.
Rectification of errors and mistakes is only effective for the following
documents:
- tax assessments, like underpaid-tax assessments, additional
underpaid-tax assessment, overpaid tax assessment and nil tax
assessment;
- tax collection letters;
- decisions on preliminary restitution of overpaid tax;
- decisions on objections;
- decisions on reduction or abolition of administrative sanction;
- decisions on reduction or revocation of untrue tax assessments.
The scope of rectification stipulated in this paragraph is limited to errors
or mistakes resulting from:
a. misprints, like misprints of names, addresses, taxpayers code
numbers, numbers of tax assessments, kind of tax, periods or tax years
and date of maturity;
b. miscalculation, namely mistakes resulting from the totaling
and/or subtraction and/or multiplication and/or division of numbers;
c. misapplication of certain provisions in taxation laws, namely
misapplications of tariffs, percentages of norms of calculation of net
income, administrative sanction, miscalculation of untaxed income,
miscalculation of income tax in the current year and mistakes in crediting.
The rectification in this paragraph can mean : to add or reduce or abolish,
dependent on the nature of errors and mistakes.
In the case of misprint, miscalculations and/or misapplication of
provisions of taxation laws still being found out in decisions on
rectification, taxpayers can submit applications for rectification to the
Director General of Taxation to the Director General of Taxation can

LAW NO 16 TGL 02/08/2000
rectify because of the functional position.

Paragraph (2)
In order to provide legal certainty for applications for rectification
submitted by taxpayers, decisions must be made in 12 (twelve) months
as from the date of receipt of the applications.
Paragraph (3)
In the case of the 12-months period elapsing and the Director General of
Taxation not yet making decisions, the applications of taxpayers are
considered acceptable in matter applied for.
With applications of taxpayers being considered acceptable, the Director
General of Taxation issues decisions on rectification according to the
applications of taxpayers. Rectification of matters considered acceptable
can not be submitted again.
Letter 16
Article 17B
Paragraph (1)
Based on applications for restitution of overpaid tax other than
applications for restitution of overpaid tax from taxpayers with certain
criteria as meant in Article 17C, tax assessment must be issued not later
12 (twelve) months as from the date of receipt of complete applications,
meaning that tax returns have already been fully completed as meant in
Article 3.
For certain activities, like export and delivery of taxable goods and/or
services to collectors of value added tax, the period can be shortened by
a decision of the Director General of Taxation. Applications can be
submitted by means of completing columns tax returns or separates
letters.
The tax assessment can be in the form of underpaid tax assessments or
overpaid tax assessments or nil tax assessments.
Article (2)
The deadline as meant in paragraph (1) is intended to provided legal
certainty for applications of taxpayers or taxable
entrepreneurs/companies, so that in the case of the deadline elapsing
and the Director General of Taxation making no decisions, the
applications are considered acceptable. Apart from that, the deadline is
also intended for interests in orderly administration of taxation.
Article (3)
In the case of the Director General of Taxation being late to issue
overpaid tax assessment, taxpayers are given are interest compensation
of 2% (two percent) per month, starting from the expiration of the period
as meant in paragraph (2) up to the moment of issuance of overpaid tax
assessments, part of a month is rounded up to one month.
Letter 17
Article 17C
Paragraph (1)
After applications for restitution of overpaid tax from taxpayers with
certain criteria are examined, decisions on preliminary restitution of
overpaid tax must be issued not later than:
a. 3 (three) months, in the case of income tax;

LAW NO 16 TGL 02/08/2000
b. 1 (one) month in the case of value added tax;

as from the date of receipt of complete applications, meaning that tax
returns have already been completed according to the provisions in
Article 3 paragraph (1), paragraph (1a) and paragraph (6). The
applications can be conveyed by means of completing columns in tax
returns or separate letters.
Paragraph (2)
Certain criteria mean, among others:
1. compliance of taxpayers, including the conveyance of tax returns,
having no tax arrears;
2. financial statements are audited by public accountants with
unqualified opinion.
3. calculation of amounts of business turnover and tax is easy to
ascertain because it is connected with other government
regulations, e.g. business turnover and value added tax on
cigarette manufacturers could be determined from the payment
of excise.
Paragraph (3)
Sufficiently clear
Paragraph (4)
The Director General of Taxation issues tax assessment in 10 (ten) years
after taxpayers already securing preliminary restitution as meant in
paragraph (1) are examined. The tax assessment can be in the form of
underpaid-tax assessment or overpaid-tax assessment or nil tax
assessment.
Paragraph (5)
In order to encourage taxpayers to report the amount of tax due
according to the provisions of taxation laws in force, based on results of
the examination as meant in paragraph (4), underpaid tax assessment
are issued, plus an administrative sanction in the form of the increase as
high 100% (one hundred percent) of the amount of underpaid tax.
The clear method of calculation of underpaid-tax assessments and
imposition of an administrative sanction in the form the increase is
provided in the following example:
1) Income tax
- A taxpayers has already secured preliminary restitution
of overpaid tax amounting to Rp 80,000,000.000
- The following results are obtained from examination:
a. Income tax due amounts to Rp 100,000,000.000
b. Tax credits are:
- Income tax-article 22 Rp 20,000,000.00
Based on the results of the examination, an underpaid tax assessment is
issued with the calculation as follows:
- Income tax due amounts to Rp 100,000,000.00
Tax credits:

LAW NO 16 TGL 02/08/2000
- Income tax-article 22 Rp 20.000.000.00

- Income tax-article 25 Rp 90,000,000.00 (+)
---------------------------
Rp150.000.000,00
The amount of preliminary
restitution of overpaid Tax Rp 80.000.000.00 (-)
---------------------------
The amount of creditable tax Rp 70,000,000.00
------------------------
The amount of unpaid/underpaid tax Rp 30,000,000.00
Administrative sanction in the form
of the increase as high as 100% Rp 30,000,000.00 (+)
---------------------------
The amount which must be paid Rp 60,000,000.00
=============
2) Value Added Tax
- A taxable entrepreneur/company has secured preliminary restitution
of overpaid tax amounting to Rp 60,000,000.00
- The following results are obtained from examination:
a. Output tax Rp 100,000,000.00
b. Tax credits, namely:
- Input tax Rp 150,000,000.00
- Based on the results of the examination, an underpaid tax
assessment is issued with the calculation as follows:
- Output tax Rp 100,000,000.00
- Tax credits:
- Input tax Rp 150,000,000.00
- The amount of preliminary
restitution of overpaid tax
Rp 60,000,000.00 (-)
----------------------------
The amount of creditable tax Rp. 90,000,000.00
----------------------------
Unpaid/underpaid tax Rp. 10,000,000.00
- Administrative sanction in the form
of increase as high as 100% Rp. 10,000,000.00
------------------------ (+)
The amount which must be paid Rp. 20,000,000.00
=============
Letter 18

LAW NO 16 TGL 02/08/2000
Article 18
Paragraph (1)
Tax Collection Letters, Underpaid-Tax Assessment, Additional
underpaid-tax assessment and decision on rectification, decision on
objections, decision on appeals resulting in an increase in the amount of
tax due, are administrative means for the Director General of Taxation to
collect tax.
Paragraph (2)
Abolished
Letter 19
Article 19
Paragraph (1)
This paragraph regulates the imposition of interest on amounts which still
must be paid according to underpaid-tax assessment or additional
underpaid-tax assessments and additional amounts of tax which must be
paid on the basis of decisions on rectification, decisions on objections or
decision on appeals not paid or underpaid upon the maturity of payment
or late in the payment. The clear method of calculation is provided in the
following examples:
1. Underpaid tax
Income-tax assessment
Tax owed or collected (credited tax is considered nil) amounts to
Rp 100,000.00. A tax assessment is issued on October 10, 2002.
The tax must be settled not later than November 9, 2002, but the
amount of tax paid up to November 1, 2000 is only Rp 60,000.00.
Up to the latest date of the payment period (November 9, 2002),
taxpayers longer pay the remainder of the tax claim.
The Director General of Taxation issued a tax collection letter on
November 18, 2002 with the calculation as follows:
Tax due Rp 100.000.00
Amount of tax paid on time Rp 60,000.00
-------------------
Underpaid tax Rp 40.000.00
Interest is calculated for 1 month
1x2%x Rp 40,000 = Rp 800.00
The interest is collected by a Tax Collection Letter.
2. Amount of tax paid late
The basis is the same as the example no.1
The tax is fully paid the payment is late, such as November 20,
2002. A tax collection letter is issued on November 25, 2002.
Interest due in the tax collection letter is calculated for one
month = 1x2%xRp 100,000.00 = Rp 2,000.00
---------------
3. Tax which is underpaid or paid late.
The basis is the same as the payment in example no.1.
Some Rp 60,000.00 is paid on November 20, 2002

LAW NO 16 TGL 02/08/2000
A tax collection letter is issued on November 25, 2002.

Interest due is calculated for one month =
1x20%xRp 100,000.00 = Rp 2,000.00
---------------
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Letter 20
Article 20
Paragraph (1)
In the case of amounts of the collected tax being not paid or being
underpaid up to the date of maturity of payment, or up to the date of
maturity of postponement of payments or failing to fulfill installments of
tax payment, the collection is done by distress warrant. The collection of
tax by distress warrants is executed to tax guarantors.
Paragraph (2)
Immediate and total collection means the collection of the executed by
tax confiscators to guarantors without waiting for the date of maturity of
payment including the whole tax due of all kinds of tax, tax periods and
tax year.
Paragraph (3)
Sufficiently clear
Letter 21
Article 21
Paragraph (1)
This paragraph stipulates the status of the state as a preference creditor
declared to have preemptive rights to goods belonging to tax guarantors
to be auctioned publicly.
Payment to other creditors is settled after the tax due is paid.
The paragraph intends to give opportunity to the government for securing
preemptive rights from either creditors to proceeds of auctions of goods
belonging to tax guarantors in the front of the public to cover or settle tax
due.
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Paragraph (5)
Sufficiently clear
Letter 22
Article 22
Paragraph (1)

LAW NO 16 TGL 02/08/2000
The moment of expiration of tax collection is necessary to stipulate to

provide legal certainty about when the tax due can not be collected
anymore.
Paragraph (2)
The expiration of tax collection can exceed 10 (ten) years if:
a. The Director General of Taxation issues warning letters and
convey distress warrant to tax guarantors failing to settle their tax
up to the date of maturity of payment. In this case, the date of
conveyance of the distress warrants is considered the expiration
of collection.
b. Taxpayers acknowledge tax due by the following means:
- Taxpayers submit applications for payment by
installments and postponement of payment of tax due
before the date of maturity of payment. In this case, the
date of receipt of application for installments or
postponement of payment by the Director General of
Taxation is considered the expiration of collection.
- Taxpayers submit applications for raising objections. In
this case, the date of receipt of objection from taxpayers
by the Director General of Taxation is considered the
expiration of collection.
- Taxpayers pay part of tax due. In this case, the date of
payment of part of tax due is considered the expiration of
collection.
c. Underpaid-tax assessments or additional underpaid-tax
assessments which are issued to taxpayers because they
commit taxation crimes on the basis of court decisions already
having permanent legal power. In this case, the date of issuance
of the tax assessment is considered the expiration of collection.
Letter 23
Article 23
Paragraph (1)
Abolished.
Paragraph (2)
Sufficiently clear
Paragraph (3)
Abolished
Letter 24
Article 24
The Minister of Finance will regulate procedures for depreciation and determine
amounts of uncollectable tax claims because, among others, taxpayers died and
have no inheritance or wealth/assets, corporate taxpayers companies already
completing their insolvency process, taxpayers no longer fulfilling requirements
for tax subject and rights to collect have already expired. Under this method,
amounts of balances of tax claims which can be collected or disbursed can be
estimated effectively.
Letter 25
Article 25
Paragraph (1)

LAW NO 16 TGL 02/08/2000
In the case of taxpayers considering inappropriateness in amounts of

losses, tax due and tax withheld or collected, the relevant taxpayers can
only raise objections to the Director General of Taxation.
The objections are raised for materials or contents of tax assessments,
namely amounts of losses on the basis of taxation laws, tax due and tax
withheld or collected.
The word #a# in this paragraph means that an objection must be raised
for a kind of tax and one tax year, i.e.:
Objections for Income Tax in 1995 and 1996 are respectively submitted
in separate letter. Two letters of objections must be submitted for tax in
the two tax year.
Paragraph (2)
Sufficiently clear
Paragraph (3)
The deadline of submission of letters of objections is stipulated for 3
(three) months as from the date of issuance of tax assessment as meant
in paragraph (1), to provide adequate time for taxpayers to prepare letters
of objections along with reasons.
In the case of taxpayers failing to submit the letters in 3 (three) months
period because of force majeur, so the Director General of Taxation still
can consider the extension of the deadline.
Paragraph (4)
Sufficiently clear
Paragraph (5)
Evidence of receipt of letters already given by officials of the Directorate
General of Taxation and/or post offices functions as evidence of receipt
of letters of objections if the letters fulfill requirements for letters of
objections. Therefore, the deadline of settlement of the objections is
calculated as from the date of receipt of the letters.
In the case of the letters failing to meet requirements for letters of
objections and taxpayers rectifying, the deadline of settlement of the
objections is calculated as from the date of receipt of the following latter
fulfilling requirements for letters of objections.
Paragraph (6)
In order to enable taxpayers to formulate objections with solid reasons,
the taxpayers are entitled to ask for bases of imposition, withholding and
collection of tax already stipulated, and on the opposite side, the
Director General of Taxation is obliged to fulfill the above mentioned
request.
Paragraph (7)
In a bid to prevent efforts to evade or postpone the payment of tax
through the submission of letters of objections, the submission of
objections does not impede actions of collection up to the execution of
auctions.
This provision is necessary to stipulate so that taxpayers failing to pay tax
already stipulated with the excuse of submission of objections can be
prevented from disturbing the state revenue.
Letter 26
Article 27

LAW NO 16 TGL 02/08/2000
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
abolished
Paragraph (5)
Sufficiently clear
Paragraph (6)
Sufficiently clear
Letter 27
Article 27A
Paragraph (1)
The interest compensation is only granted with regard to decisions on
objections or appeals connected with underpaid-tax assessments or
additional underpaid-tax assessments.
Paragraph (2)
The interest compensation can also be granted to overpaid-tax collection
letters already issued on the basis of Article 14 paragraph (4) and Article
19 paragraph (1) in connection with the issuance of underpaid-tax
assessments or additional underpaid-tax assessments, which secure the
reduction or abolition of an administrative sanctions in the form a fine or
interest.
The reduction or abolition is a consequence of the issuance of decisions
on objections or appeals for the underpaid-tax assessment or additional
underpaid-tax assessments, which approve applications of taxpayers
partly or wholly.
Paragraph (3)
Sufficiently clear
Letter 28
Article 28
Paragraph (1)
Sufficiently clear
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Paragraph (4)
Sufficiently clear
Paragraph (5)
The principles of consistency are the same as the principles applied to
assounting methods in the previous years, to prevent the moment of
profits or losses. Among the principles of consistency in the accounting

LAW NO 16 TGL 02/08/2000
methods are found in the application of:

a. system of acknowledgement of income;
b. accounting year;
c. methods of evaluation of stocks;
d. methods of depreciation and amortization.
The accrual system is a method of calculation of income and costs,
meaning that income is acknowledged upon its acquisition and costs are
recognized at the moment they are due. Therefore, it does not depend on
the moment of receipt of income and cash payment of the costs.
The accrual system includes acknowlegement of income on the basis of
the method of percentages of jib completion generally used for the
construction field and other methods used for certain business, like Build,
Operate and Transfer (BOT).
The cash system is a method whose calculation is based on income
received and costs paid in cash.
According the system, income is only recognized as income, if the
income has already been received in cash in a certain period, and costs
are acknowledged as costs if the costs have already been paid in cash
in a certain period.
The cash system is usually adopted by individual small-scale companies
or providers of transport services, like transport, entertainment,
restaurants, in which the interval between provision of services and
receipt of payment does not last for a long time. In the pure cash system,
income from the delivery of goods or services is stipulated upon the
receipt of payment from subscribers, and costs are stipulated upon the
payment of goods, services and other operational costs.
Under this method, the application of cash system can result in the
absurd calculation of income, namely amounts of income from year to
year can be adjusted by arranging cash revenue and expenditure. In
relation thereto, the application of cash system to the calculation of
income tax must observe the following matters:
1) the calculation of amounts of sales in a period must cover the
whole sales, both in cash and non-cash. The whole amounts of
purchase and stocks must be included in the calculation of cost
prices.
2) in a bid to obtain assets which can be depreciated and rights
which can be amortized, costs can only deducted from income
through depreciation and amortization.
3) the cash system must be applied consistently.
Therefore, the use of cash system for the taxation purpose can also be
named mixed system.
Paragraph (6)
Basically, accounting methods applied must be consistent, the same as
the previous years, i.e. in the applications of methods of
acknowledgement of income and costs (cash or accrual method),
method of depreciation of fixed assets, method of evaluation of stock etc.
Nonetheless, the accounting methods remain possible to change as long
as the taxpayer has already secured approval from the Director General
of Taxation. Applications for the change in accounting methods must be
submitted to the Director General of Taxation before the commencement
of the relevant accounting year by enclosing logical and acceptable

LAW NO 16 TGL 02/08/2000
reasons as well as consequences which may arise from the change.

Any change in accounting methods will result in changes in the principles
of consistency which can cover the change from cash to accrual method
or reversely or acknowledgement of costs connected with the
depreciation of fixed assets by using certain method of depreciation is an
example.
Example:
A taxpayers adopts a straight line method of depreciation in 2002. The
taxpayer intends to change the method of depreciation of assets in 2003
by applying a declining balance method.
For the purpose, the taxpayers must first submit an application for
securing approval from the Director General of Taxation which is
submitted before the commencement of the accounting year of 2003 by
mentioning reasons for the change in the method of depreciation and
consequences of the change.
Since the change in the accounting year also results in change in the
amount of income or losses of the taxpayer, the change must also secure
approval from the Director General of Taxation.
The tax year is the same as the calendar year except the taxpayer adopts
an accounting year which is not the same as the calendar year.
In the case of the taxpayer adopting an accounting year different from the
calendar year, the mentioning of the relevant tax year uses the year in
which the first 6 (six) months or above is included.
Example :
a. The tax year of the book keeping starting from July 1, 2002 up to
June 30, 2003 is 2002.
b. The tax year of the book keeping starting from October 1, 2002
up to September 30, 2003 is 2003.
Paragraph (7)
The definition of book keeping has already been stipulated in Article 1
letter 26. The stipulation is made so that the amount of tax due can be
calculated from the book keeping.
In addition to income tax, other kinds of tax must also be able to calculate
from the book keeping. In order to enable the correct calculation of value
added tax and sales tax on luxury goods, the book keeping must also
records totals of acquisition prices or import values, the book keeping
prices or export values, totals of selling prices of goods subjected to the
collection of sales tax on luxury goods, totals of payment for the use of
intangible taxable goods from outside the customs areas in the customs
areas and/or the use of taxable services from outside the customs areas
in the customs areas, totals of input tax which can and not be credited.
Therefore, the book keeping must be executed by means or systems
normally used in Indonesia, like on the basis of Financial Accountancy
Standards, unless otherwise stipulated by taxation laws.
Paragraph (8)
Sufficiently clear
Paragraph (9)
Recording by individual taxpayers undertaking business activities and
independent work includes gross turnover or revenue and other kinds of
revenue and income, while the recording by those decidedly receiving
income from outside business and independent work only covers gross

LAW NO 16 TGL 02/08/2000
income, deductions and net income as the object of income tax.

Apart from that, the recording also covers which is not tax object and/or
not subjected to final tax.
Paragraph (10)
Sufficiently clear
Paragraph (11)
Books, records and documents including results of electronic data
processing which become the bases of book keeping or recording must
be kept for 10 (ten) years in Indonesia to ensure that materials of book
keeping or recording needed remain available and be made available
promptly in the case of the Director General of Taxation planning to issue
tax assessment. The ten year period of storage of books, records and
documents which becomes the basis of book keeping or recording is in
accordance with the provision on the deadline of expiration of the
assessments.
Paragraph (12)
Sufficiently clear
Letter 29
Article 29
Paragraph (1)
In the framework of supervision, the Director General of Taxation is
authorized to examine for the following purpose:
a. testing the compliance with fulfillment of taxation obligations;
b. other purpose in the framework of implementing provisions of
taxation laws;
The examination can be done in offices (office examination) or domiciles
of taxpayers (field examination) whose scope can cover previous years
and the current year.
The examination can be done to Taxpayers, including government
institution and other statutory body as a tax collector or tax withhelds.
The implementation of examination in the framework of testing the
fulfillment of taxation obligations is done by tracing the truth of tax
returns, book keeping or recording and fulfillment of other taxation
obligations for comparison with the actual conditions or business
activities of taxpayers, by applying the following techniques:
a. examination techniques commonly used for examination, named
complete examination;
b. examination techniques with simple weight and depth according
to scope of examination executed in both offices and on the field,
called simple examination.
Apart from that, simple examination can also be used for other purpose,
like:
- stipulation of one or more places where value added tax and/or
income tax-article 21 is/are due;
- validation or revocation of validation of taxable entrepreneurs;
- issuance of taxpayers code numbers or validation of taxable
entrepreneurs/companies ex officio.
Paragraph (2)

LAW NO 16 TGL 02/08/2000
Since the examination is executed by examining officers having clear

identities, the officers must have identities of examining officers and be
accompanied by letters of instruction to examine, as well as show them
to taxpayers examined. The examining officers must also explain
objectives of examination to Taxpayers.
The examining officers might have secured adequate technical education
and have skill as tax examining officers. In executing the tasks, the
examining officers must work honestly, responsibly, full understandably,
politely and objectively as well as being obliged to avoid disgraceful
actions.
Opinions and conclusions of examining officers must be based on strong
and connected evidence as well as provisions of taxation laws.
Examining officers must foster taxpayers to fulfill taxation obligations
according to the provisions of taxation laws.
Paragraph (3)
Taxpayers examined in the framework of testing the compliance with the
fulfillment of taxation obligations or other purpose as meant in paragraph
(1) must show and lend books, records, documents and other kinds of
necessary information connected with the acquisition of income or
business activities.
In the case of taxpayers failing to make the required books, records
and documents available with the reason of self-avoidance, pursuant to
this paragraph, examining officers are allowed to enter places or rooms
which according to predictions of the officers are used for stroring the
books, record and documents.
Paragraph (4)
In order to prevent excesses of being committed to secrecy so that
books, records, documents and other kinds of information can not be
made available by taxpayers, this paragraph affirms that the obligation to
keep them in secrecy is to be ignored.
Letter 30
Article 31
Sufficiently clear
Letter 31
Article 32
Paragraph (1)
This law stipulates parties becoming proxies to exercise taxation rights
and obligations of bodies, bodies in dissolution, inheritance not yet
shared and children not yet grown up or people in custody.
Representatives or proxies of the said taxpayers need to be stipulated
because they can not to are impossible to execute the legal action
themselves.
Paragraph (2)
This provision affirms that representatives of the taxpayers stipulated in
this law is jointly or severally responsible for the payment of tax due.
The Director General of Taxation can consider the exception, in the
vaseof representatives of taxpayers being able to prove and convince
that their positions, according to reasonability and appropriateness, are
impossible to hold responsible jointly or severally.

LAW NO 16 TGL 02/08/2000
Paragraph (3)
This provision provides facilities and opportunities for taxpayers to seek
the help from other parties understanding taxation issues as their proxies,
for and on behalf of their names to help execute taxation rights and
obligations of taxpayers.
The assistance includes the execution of formal and material obligations
as well ass fulfillment of rights of taxpayers stipulated in taxation laws.
Paragraph (3a)
Sufficiently clear
Paragraph (4)
People decidedly having authority to determine policies and/or make
decisions in the framework of executing corporate business, like authority
to sign contracts with the third parties, cheques etc, even though names
of the relevant people are not included in the composition of personnel
mentioned in both articles of association and amendments, are included
in the definition of executives. The provisions are also effective for
Boards of Directors and majority or controlling shareholders.
Letter 32
Article 33
Pursuant to the principle of charge payment, value added tax on goods
and services as well as sales tax on luxury goods are borne by buyers or
consumers of goods or recipients of services. In relation thereto, buyers
or consumers of goods and recipients of services should be responsible
severally for the payment of tax due in the case of the tax due being not
able to collect from sellers or providers of services and buyers or
recipients of services failing to show evidence that they have already paid
tax to sellers or providers of services.
Letter 33
Article 34
Paragraph (1)
All officials being tax officer and those executing tasks in the taxation field
ate prohibited from disclosing secrecy of taxpayers connected with
taxation affairs, including:
a. tax returns, financial statements etc reported by taxpayers;
b. data obtained in the framework of examination;
c. confidential documents and/or data obtained from the third
parties;
d. documents and/or secrecy of taxpayers according to the
provisions of laws concerned.
Paragraph (2)
Experts, like linguists, accountants, lawyers etc appointed by the Director
General of Taxation to help execute taxation laws are the same as tax
officers who are also prohibited from disclosing the secrecy of taxpayers
as meant in paragraph (1).
Paragraph (2a)
Other parties include state institutions or government agencies
authorized to audit state finance. Information which can be notified
includes identities of taxpayers and general taxation information.
Paragraph (3)

LAW NO 16 TGL 02/08/2000
For the state interest, like in the framework of investigation, indictment of

joint cooperation with other government institutions, information or written
evidence from or about taxpayers can be given or shown to certain
parties appointed by the Minister of Finance.
Names of taxpayers, parties appointed and officials or experts
professional licensed to give information or shown written evidence from
or about taxpayers must be mentioned in the licenses issued by the
Minister of Finance. The granting of the licenses is limited to matters
deemed necessary by the Minister of Finance.
Paragraph (4)
For the purpose of examination in criminal or civil cases connected with
taxation affairs, for the interest of the court the Minister of Finance issues
licenses to exempt tax officers and experts as meant in paragraph (1)
and (2) from the obligation to keep the secrecy, upon the written requests
from presiding judges.
Paragraph (5)
This provision aims to limit and affirm that taxation information which is
asked only concerns with criminal or civil cases of deeds or events
connected with taxation affairs and is only limited to the relevant
suspects.
Letter 34
Article 36
Paragraph (1)
It may occur in practices that an administration sanction imposed on
Taxpayers due to mistakes of tax officers can burden Taxpayers not only
guilty or not understanding taxation regulations. In this case, the
administration sanction in the form of interest, fine and increase already
stipulated can be abolished or reduced by the Director General of
Taxation.
The Director General of Taxation because of his position and on the
basis of justice elements can also reduce and revoke incorrect tax
assessment, like taxpayers whose objections are rejected because they
fails to meet formal requirements (conveying letters of objection on time)
eventhough the material requirements are fulfilled.
Paragraph (2)
Sufficiently clear
Letter 35
Article 36A
In the frame work of enhancing services for taxpayers and increasing capability of
tax officers, the tax officers calculating and stipulating tax not in accordance with
taxation laws in force thus inflicting losses on the state are subjected to sanctions
according to the provisions of laws in force.
Letter 36
Article 37
The value of money is subjected to changes according to financial economic
conditions. In relation thereto, this law authorizes the government, if necessary to
issue a government regulation to change and adjust the amount of interest
compensation and administrative sanction in the form of interest, fine and
increase in accordance with financial economic conditions.
Letter 37

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Article 38
Violations of taxation of obligations committed by Taxpayers, as long as they are
connected with administration of taxation are subjected to administrative
sanctions, while those connected with taxation crimes are subjected to criminal
sanctions. The deeds or actions as meant in this Article, instead of administrative
violations.
With this criminal sanctions, it is expected to increase awareness of Taxpayers to
fulfill taxation obligation as stipulated in taxation laws The absence as meant in
this Article means unintentional, negligent, less careful or less observing their
obligations so that the deeds inflict losses on the state.
Letter 38
Article 39
Paragraph (1)
The deeds or actions as meant in this paragraph which are conducted
intentionally are subjected to a heavy sanctions in the view of the fact that
tax revenue has important role in the state revenue.
Paragraph (2)
In order to prevent the repetition of taxation crimes, parties committed
again to taxation crimes before one tax year elapses as from the date
when they serve imprisonment partially or wholly, are subjected to
heavier sanctions, by doubling the criminal sanctions stipulated in
paragraph (1)
Paragraph (3)
The abuse or unrightfully use of taxpayer code number or validation of
taxable entrepreneurs or the conveyance of tax returns whose contents
are incorrect or in framework of submitting applications for restitution
and/or tax compensations which are not correct seriously inflict losses on
the state. In relation thereto, attempts to commit crimes are separate
indictments.
Letter 39
Article 41
Paragraph (1)
In order to guarantee that taxation secrecy will not be notified to other
parties and Taxpayers are not doubtful to give data and information in the
framework of implementation of taxation laws, criminal sanctions against
the relevant officials disclosing the secrecy are needed.
The disclosure of secrecy according to this paragraph is executed
because of the absence in the meaning of negligent, careless or less
observing so that the obligation to keep the secrecy of information or
evidence in Taxpayers protected by taxation laws is violated. The
punishment is imposed in accordance with absence.
Paragraph (2)
The deeds or actions as meant in this paragraph which are committed
intentionally are subjected to sanctions heavier than the deeds or actions
because of negligence, so that the relevant officials are more careful not
to disclose the secret of Taxpayers.
Paragraph (3)
The criminal indictment against the violations of secrecy as meant in
paragraph (1) and (2) according to their nature connected with the
personal interest of anybody or statutory bodies being Taxpayers so that

LAW NO 16 TGL 02/08/2000
it can be made as criminal reports.

Letter 40
Article 41A
In order to ensure the fulfillment of request of the Director General of
Taxation as stipulated in Article 35 by the third parties, a sanction against
the third parties committed the deeds or actions as meant in this article.
Letter 41
Article 41B
Anybody impending or causing difficulty to investigations into taxation, like
preventing investigations from raiding, hiding evidence etc as meant in this article
is subjected to a criminal sanction.
Letter 42
Article 44
Paragraph (1)
Tax investigators are certain civil servant officials within the Directorate
General of Taxation who are appointed by authorized officials according
to the provisions of laws in force.
Paragraph (2)
Sufficiently clear
Paragraph (3)
Sufficiently clear
Letter 43
Article 47A
In the framework of providing certainty for Taxpayers, Law Number 6 Year 1983
on General Provision and Taxation Procedure as already amended by Law
Number 9 Year 1994 is still enforced to taxation rights and obligations not yet
settled in tax year of 2000.
Article II
Sufficiently clear
Article III
Sufficiently clear
SUPPLEMENT TO STATUTE BOOK OF THE REPUBLIC OF INDONESIA NUMBER 3984

UU 16 2000 English

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LAW NO 16 TGL 02/08/2000

WITH THE BLESSING OF ALMIGHTY GOD

With the Approval of:

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amounts of preliminary restitution of overpaid tax or after being reduced by amounts of

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(3) The Director General of Taxation can stipulate:

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11. The provision in Article 11 is amended so as to entirely read as follows:

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date of issuance of overpaid tax assessments."

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Taxes 2.0 Licensed To PT THE PRACTICE - PT THE PRACTICE Hal 10 dari 48

Taxes 2.0 Licensed To PT THE PRACTICE - PT THE PRACTICE Hal 11 dari 48

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rights or validation of taxable companies as meant in paragraph (1) letter a or failing to

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i. to summon people for testimony and examination as suspects or witnesses;

THE PRESIDENT OF THE REPUBLIC OF INDONESIA

THE STATE SECRETARY

STATUTE BOOK OF THE REPUBLIC OF INDONESIA YEAR 2000 NUMBER126

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Certain taxpayers stipulated by a decree of the Minister of Finance are

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tax returns and Rp 100,000.00 (one hundred thousand rupiahs) in the

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interest, the following example is provided:

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administration, the Director General of Taxation stipulates that the

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information, amounts of tax calculated or reported in the relevant tax

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In the case of taxable entrepreneurs/companies failing to report their

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rectify because of the functional position.

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b. 1 (one) month in the case of value added tax;

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- Income tax-article 22 Rp 20.000.000.00

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A tax collection letter is issued on November 25, 2002.

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The moment of expiration of tax collection is necessary to stipulate to

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In the case of taxpayers considering inappropriateness in amounts of

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