Getting to Know Tax Lawsuit, a Legal Remedy for Tax Administration Disputes

Taxpayers can file a tax lawsuit through the tax court, when they disagree with the decision or determination of the tax office on their tax obligations.

In general, tax lawsuits can only be filed on issues arising from tax administration processes.Thus, matters related to differences in perceptions in calculating tax payable, do not include substances that can be sued.

Specifically, cases that can be filed for lawsuits, for example, the implementation of a coercive letter, a warrant for confiscation, an announcement of an auction, or certain decisions issued by the DGT.

Several DGT decisions that can be sued by taxpayers through the tax court include:

First, the decision to prevent or temporarily ban certain taxpayers from leaving the territory of the Republic of Indonesia, for certain reasons in accordance with statutory regulations in the context of tax collection.

Second, decisions relating to the implementation of tax decisions. Except for certain decisions as stipulated in Article 25 paragraph (1) of the Law on Taxation General Provisions and Procedures
(KUP Law), such as:

• Tax Underpayment Assessment Letter 
• Additional Tax Underpayment Assessment Letter
• Nil Tax Assessment Letter 
• Tax Overpayment Assessment Letter Surat 

In addition, taxpayers also cannot file a lawsuit related to the decision on the objection as stipulated in Article 26 of the KUP Law.

Third, the issuance of a tax assessment letter or decision letter is not in accordance with the procedures for its issuance, as stipulated in the provisions of the KUP Law. 

Procedure for Filing a Tax Lawsuit

There are several things that must be considered by taxpayers in filing a lawsuit such as legal standing, the deadline for submitting a lawsuit, the format of the letter and the destination address of the lawsuit letter.

Regarding legal standing, a lawsuit can only be filed by the plaintiff or taxpayer, heirs, administrators or attorneys who have been authorized by the plaintiff.

Meanwhile, regarding the expiration date, the time limit for submitting a Lawsuit is no later than 14 days after the decision to implement the billing is received or 30 days after the decision letter that forms the basis of the case is received by the taxpayer.

The time period for submitting a Lawsuit can be extended, in the event that the taxpayer faces a force majeure or an event out of control, a maximum of 14 days from the end of the force majeure event.

Then, the lawsuit letter submitted is written in Indonesian and accompanied by clear reasons and a copy of the decision letter which forms the basis of the lawsuit.

The Lawsuit was then printed using F4 (Folio) size paper and using Bookman Old Style font and font size 11.

In general, the provisions regarding the format of the Lawsuit Letter are regulated in the Tax Court Circular Letter Number: SE-08/PP/2017 concerning Amendments to the Letter of the Head of the Tax Court Number SE-002/PP/2015 on Completeness of Appeal or Lawsuit Administration (SE-08/2017).

Furthermore, the lawsuit can be sent to the Court which is domiciled on Jl. Hayam Wuruk Number 7 Central Jakarta 10120. Submission can be made via registered expedition, registered postal service, or delivered directly and submitted through the Tax Court Letter Receiving Counter.

Completeness of Tax Lawsuit Administration

The thing that must also be considered in submitting a lawsuit letter is its administrative completeness.

Here are some documents that must be prepared if you are going to submit a tax lawsuit to the Tax Court:

1. Lawsuit (2 copies, 1 original and 1 photocopy).

2. Copy of objection attachment documents (2 copies).

a. Tax Assessment Letter or Tax Lawsuit whose issuance is not in accordance with procedures or provisions;

b. Decree of the Second Cancellation/Reduction of the Director General of Taxes;

c. Letter of Request for Cancellation/Second Reduction;

d. Decree of the First Cancellation/Reduction of the Director General of Taxes;

e. First Cancellation/Reduction Application Letter;

f. Other Supporting Documents for Lawsuit Applications.

3. Other supporting documents (1 copy)

• Copy of the deed of establishment and amendment that lists the management who signed the appeal letter, objection letter, special power of attorney, and integrity pact that has been sealed later.
• Original stamped power of attorney if authorized.
• Photocopy of attorney's card if authorized by attorney.
• All softcopies of the objection documents above are submitted on a CD or Flash Drive (Appeal letters are submitted in .doc format, while other supporting documents are in .pdf format).

5. List of contents of the lawsuit

Lawsuit Revocation

Taxpayers can withdraw a lawsuit that has been filed by submitting a statement of revocation to the Tax Court. Then, upon the request for revocation, the Tax Court will delete the list of disputes.

Deletion can be done in two ways. First, the decision of the Head of the Tax Court if the revocation is made before the trial process. Second, the decision of the Panel of Judges/Single Judge if the trial process is already underway.

However, it should be noted, especially for lawsuits that are withdrawn when the trial process is already underway, cannot be re-submitted. In addition, the process of filing a lawsuit does not stop or delay the tax collection process by the DGT. (ASP/KEN)