DGT Gives Extra Time for Tax Obligation Fulfillment

JAKARTA. The Directorate General of Taxes (DGT) continues the status of force majeure due to the ongoing spread of the Corona Virus Disease 2019 (Covid-19) pandemic. This extra time policy was taken in response to the extension of the emergency status of the Covid-19 pandemic disaster established by the National Agency for Disaster Countermeasure (Badan Nasional Penanggulangan Bencana/BNPB) from 29 February to 29 May 2020.

Previously, BNPB had set the emergency status of Covid-19 for 32 days, from 28 January to 28 February 2020. The policy has also been followed up by the DGT which at the time established force majeure for the same period.

Related to the extra time done by BNPB, DGT also extended the force majeure accompanied by additional time to settle tax obligations that must be fulfilled, both by taxpayers (Wajib Pajak/WP) and authorities.This policy is stated in the Circular Letter (Surat Edaran/SE) Director General of Taxes number SE-22/PJ/2020.  Here is how the fulfillment of extended renewal obligations: 

First, the government applies extra time for the filing of taxpayer objections, which under normal conditions can only be done a maximum of 3 months after the tax assessment letter (Surat Ketetapan Pajak) is sent or from the date of deduction or tax collection.

Read: Qestioning VAT on Free Gift Amid Corona Pandemic 

However, in a pandemic condition, tax objection that must be submitted no later than the time interval between 29 February to 29 May 2020, may be submitted a maximum of 6 months later.Thus, the deadline for submission of tax objections is no longer 3 months but plus 6 months more, so it becomes 9 months. 

Second, the extension of restitution payment is added 1 month. During the Covid-19 emergency situation, tax refund that must be made maximum at the latest between 29 February and 29 May 2020, can be done a maximum of 1 month after that.

For information, refund of tax overpayment is made if taxpayer submits an application, or when Overpaid Tax Assessment Letter (Surat Ketetapan Pajak Lebih Bayar/SKLB) dan Advance Tax Overpayment Refund Decree(Surat Keputusan Pengembalian Pendahuluan Kelebihan Pajak/SKPPKP) are issued. 

Including Objection Decision Letter (Surat Keputusan Keberatan), Notice of Tax Correction (Surat Keputusan Pembetulan), Decision Letter on Reduction of Administrative Sanction )Surat Keputusan Pengurangan Sanksi Administrasi), Decision Letter on Annullment of Administrative Sanction (Surat Keputusan Penghapusan Sanksi Administrasi), Decision Letter on Tax Assessment Reduction (Surat Keputusan Pengurangan Ketetapan Pajak), Decision Letter on Tax Assessment Annullment (Surat Keputusan Pembatalan Ketetapan Pajak) atau Decision Letter on Provision of Interest Compensation (Surat Keputusan Pemberian Imbalan Bunga). In addition, it can also be done on the basis of the granting of an appeal decision or judicial review decision that causes tax overpayment 

Third, the additional extension of the issuance of the tax assessment letter which is in normal conditions, must be issued by DGT in a maximum of 12 months from the granting of the notification letter stating that there is tax overpayment.

However, if the deadline turns out to fall within the span of 29 February to 29 May 2020, then the tax assessment letter can be issued a maximum of 6 months afterwards. The time of issuance of the decree includes the time of testing and the time of the final limitation of the results of inspection and reporting.

Fourth, the additional time for granting a decision on the tax objection submitted by taxpayer. 

Based on this circular letter, DGT may submit a decision on tax  objections filed by taxpayer longer than usual.

Based on the General Tax Provisions and Procedures Law (Undang-Undang tentang Ketentuan Umum dan Tatacara Perpajakan/KUP), DGT is required to make a decision on the objection up to 12 months after the tax objection letter is received.

However, if the maturity date ends on 29 February-29 May, the objection decision can be submitted not more than 6 months afterwards. This extension excludes settlement time for filing objection of the Land and Building Tax (Pajak Bumi dan Bangunan/PBB).

Fifth, an additional extension of the time of granting a decision on the request for reduction or elimination of administrative sanctions, reduction or cancellation of tax assessment letter and incorrect tax collection letter and cancellation of tax audit result. Referring to UU KUP, the DGT must issue the decision a maximum of 6 months from the date the application is received.

However, in the midst of the pandemic, if the maximum time limit falls between 29 February and 29;May, a decision can be given a maximum of 6 months afterwards.