Taxpayers have the right to disagree with any decision issued by the Director General of Taxes (DGT) that is deemed inappropriate. The first step that can be taken is to file an objection.
However, when the objection filed against the tax assessment letter ends in rejection, a taxpayer may take other legal action, by filing an appeal to the Tax Court.
For information, the Tax Court is a judicial body that specifically resolves dispute cases in the taxation sector and is under the supervision of the Supreme Court.
The Taxpayer can submit an appeal, a maximum of three months after the Taxpayer receives the Decision on Objection which is the basis of the dispute.
The appeal does not only apply to tax assessments but can also be made on decisions issued by the Directorate General of Customs and Excise (DJBC).
In contrast to tax cases, an appeal against a decision on a case in the field of customs and excise can be submitted a maximum of 60 days from the date the decision is issued.
However, keep in mind, an appeal is a legal remedy that also has consequences that must be considered, both when the appeal is accepted or when it is rejected.
Referring to the Circular Letter of the Head of the Tax Court Number SE-08/PP/2017 on the completeness of the administration of an appeal or lawsuit and Law (UU) Number 14 of 2022 on the tax court, here are some things that must be considered by taxpayers before actually filing an appeal to the Tax Court.
One application for one objection decision
Each appeal can only be filed for one tax or customs objection decision.
Paying Tax Payable
The appeal will also only be processed by the Tax Court if the taxpayer pays 50% of the tax payable.
Complete administrative requirements
The appeal letter to be filed to the Tax Court must be administratively complete. Some of the requirements that must be met include:
- Hardcopy of the appeal letter consisting of two copies (one original and one copy)
- The appeal letter must also be accompanied by a photocopy or a copy of the objection decision on which the dispute is based.
- For appeals for tax cases, a letter of objection, a tax assessment letter (SKP), and a tax payment letter (SSP) must be attached if there is tax payment. Meanwhile, appeals related to customs and excise must be attached with a Letter of Objection, Letter of Determination Tariff or Customs Value (SPTNP), Customs Determination Letter (SPP), Letter on the Provision of Calculation of Export Duty (SPPBK), Import Declaration (PIB), and/or Export Declaration (PEB)
- Attach a tax receipt of 50% tax payable
- Provided with other supporting documents such as a copy of the deed of establishment and its amendments (for corporate taxpayers), special power of attorney, attorney card, and integrity pact if the application is signed by a special power of attorney.
All of these documents are submitted to the Tax Court in the form of softcopy on one CD or Flash Drive and use the Portable Document Format (PDF) format. Except, for the appeal letter other than in PDF form it must also be available in Microsoft Word (DOC) format.
In addition, each appeal letter must be accompanied by a list of contents for the appeal letter.
Submit the Appeals Properly
After all administrative requirements are met, the Taxpayer may file an appeal by sending a written appeal letter in Indonesian to the Tax Court.
The application can be submitted by the expedition, post, or directly delivered and submitted through the tax court reception desk, taking into account the deadline for submitting an appeal.
Understand the appeal trial process
After the appeal letter is submitted, the Tax Court will ask the DGT as the appealed party to submit an appellee’s brief which contains answers to the arguments or reasons for the taxpayer to appeal.
The request for an appellee’s brief must be sent by the Tax Court to the DGT a maximum of 14 days, from the time the appeal letter or follow-up documents, are received.
After that, the DGT must submit an appellee’s brief a maximum of three months after the court sent the request. Then, the appellee’s brief will be sent by the court to the taxpayer applying for the appeal, a maximum of 14 days after the letter is received.
If you have received a copy of the appellee’s brief, the taxpayer who is applying for the appeal can submit a rebuttal letter to the Tax Court within a maximum of 30 days after the copy of the appellee’s brief is received.
Furthermore, the Tax Court will send a copy of the objection letter from the Taxpayer applying for the appeal to the DGT, within a maximum of 14 days after the objection is received.
However, even though the DGT does not submit an appellee’s brief or the appellant taxpayer does not provide an objection, the Panel of Judges of the Tax Court can still hold a hearing, examine and decide on the dispute.
The Panel of Judges of the Tax Court has started to hold a trial, a maximum of six months after the letter of appeal is received.
Sanctions if the appeal is rejected
The procedure and fulfillment of the administrative requirements detailed above are as important as the substance of the appeal material, in determining the final result or what decision the panel of judges will make. So it must be followed and observed properly.
So that before filing an appeal, all of these aspects must be thoroughly considered. Because there will be consequences if the court declares that our appeal is rejected.
Referring to Article 27 paragraph 5d of the Law (UU) on General Provisions and Tax Procedures which has been amended by Law Number 7 of 2021 on Harmonization of Tax Regulations (HPP), if the appeal application is rejected, the Taxpayer will be subject to administrative sanctions in the form of a fine of 60 % of the total tax based on the Appeal Decision minus the tax payment that has been paid prior to filing an objection.
To ensure the administrative requirements, the appeal procedure can be fulfilled, and the appeal argument is appropriate and correct, the Taxpayer can consult with an experienced professional.