Guidelines for auditing and testing Value Added Tax (VAT) invoices for tax officers issued. So far, the mechanism of auditing and testing tax invoices by each tax officer is often not the same, causing uncertainties.
Especially, regarding material testing that will affect the decision, whether the VAT listed on the tax invoice can be credited as input tax or not.
Therefore, in the Circular Letter of the Director General of Taxes Number SE-45/PJ/2021, it is emphasized that material testing must be carried out in two steps.
First, test the validity of transactions by auditing the flow of money, the flow of goods or the acquisition of services, and the flow of documents. Second, compare it or confirm it with the data held by DGT.
Read: Questioning the Expansion of the Tax Base: Reducing VAT Threshold vs MSME Final Income Tax
Test Result
If the information contained in the invoice matches the transaction, the tax officer will declare the test result "fulfilled". Meanwhile, if after being confirmed with DGT's data, the data contained in the VAT tax invoice is correct, the tax officer will declare the test result "existent and appropriate".
Therefore, in the event that the transaction test result states "fulfilled" and the confirmation result states "existent and appropriate", then the VAT stated in the tax invoice may be credited as input tax.
Meanwhile, in the event that the transaction test results state that they are fulfilled but the confirmation results state that they do not exist, then the VAT stated in the tax invoice may still be credited.
Then, if the transaction test result states "not fulfilled", while the confirmation result states "existent and appropriate", then the VAT stated in the tax invoice cannot be credited as input tax.
If the transaction test result states that it is not fulfilled, as well as the confirmation result that it does not exist, then the VAT stated in the tax invoice may not be credited as input tax.
| No | Not Complying with Article 9 (8) of the VAT Law* | Formal Requirements | Material Requirements | Confirmation Result | Conclusion |
| 1 | √ | √ | √ | √ | VAT Can be Credited |
| 2 | √ | √ | √ | None | VAT Can be Credited |
| 3 | √ | √ | X | √ | VAT Cannot be Credited |
| 4 | √ | √ | X | None | VAT Cannot be Credited |
| 5 | √ | X | √ | √ | VAT Cannot be Credited |
| 6 | √ | X | √ | None | VAT Cannot be Credited |
| 7 | √ | X | X | √ | VAT Cannot be Credited |
| 8 | √ | X | X | None | VAT Cannot be Credited |
| 9 | X | √ | √ | √ | VAT Cannot be Credited |
| 10 | X | √ | √ | None | VAT Cannot be Credited |
| 11 | X | √ | X | √ | VAT Cannot be Credited |
| 12 | X | √ | X | None | VAT Cannot be Credited |
| 13 | X | X | √ | √ | VAT Cannot be Credited |
| 14 | X | X | √ | None | VAT Cannot be Credited |
| 15 | X | X | X | √ | VAT Cannot be Credited |
| 16 | X | X | X | None | VAT Cannot be Credited |
*Provisions regarding the types of expenses for which the input tax cannot be credited
Testing The Formal Requirements
In addition to testing the material aspects, the tax officer must also audit the formal aspects of each tax invoice. Provisions on the formal requirements for tax invoices have been regulated in Article 13 paragraph (5) of the VAT Law.
In order to meet the formal requirements, the tax invoice must contain information such as name, address, and Taxpayer Identification Number (NPWP), types of goods or services including selling prices to discount prices.
In addition, the tax invoice must also include the amount of VAT collected, the serial code of the tax invoice, the tax invoice creation date, as well as the name and signature of the party authorized to issue it.
Even though the tax invoice meets the material requirements, but does not meet the formal requirements, the taxpayer still cannot credit the VAT contained in the invoice as input tax.
