The Concrete Data Trap: Why a Bank Credit Audit Report Triggered a 200% Tax Amnesty Penalty?

This Tax Court Decision, concerning the Final Income Tax dispute for Corporate Taxpayers arising from the Tax Amnesty Program, has affirmed that Audited Financial Statements submitted to third parties can be recognized as credible Concrete Data by the tax authority, an establishment that directly results in the imposition of Final PPh and a 200% increase penalty pursuant to Article 18 of Law Number 11 of 2016. The core conflict in the PT JDX’S case revolved around a significant asset discrepancy, where the total assets according to the 2015 Audited Financial Statements, amounting to Rp. 814,526,485,909.00, far exceeded the total net assets disclosed by PT JDX in the Asset Declaration Letter (SPH).

The Directorate General of Taxes (DJP), acting as the Respondent, argued that the difference in assets not fully or properly disclosed in the SPH, after deducting assets already reported in the last Annual Income Tax Return, must be treated as Net Assets Considered as Income. The DJP used the 2015 Audited Financial Statements as the primary piece of evidence, asserting that a document submitted by the company to the Bank for credit purposes holds an unassailable evidentiary value. Consequently, the DJP literally applied Article 18 paragraphs (1) and (3) of the Tax Amnesty Law, which mandates the imposition of a 25% Final PPh for Corporate Taxpayers plus a massive 200% increase penalty on the underpaid or unpaid PPh.

PT JDX’s defence argument was built on two pillars. The first pillar was to reject the validity of the Audited Financial Statements as the basis for the correction, questioning the integrity of the Auditing Public Accountant and asserting that the report was prepared for non-tax purposes. The second pillar concerned the erroneous calculation of the Tax Base (DPP). PT JDX insisted that the correction should be based on the concept of Net Assets (Assets minus Liabilities) in accordance with Government Regulation 36 of 2017, not merely the difference in Total Assets. PT JDX claimed the existence of relevant liabilities/debts tied to the acquisition of the undisclosed assets, which should reduce the Final PPh Tax Base, and also challenged the fairness of the 200% penalty for PT JDX who had already shown good faith.

The Tax Court Panel, after weighing all evidence, decided to Reject PT JDX's Appeal. The key legal consideration of the Panel was that the Audited Financial Statements, regardless of their initial purpose and the objections regarding the Public Accountant, remain a valid statement of the company’s assets submitted to a third party. The Panel asserted that PT JDX is bound by the provisions of Article 18 of the Tax Amnesty Law. Therefore, the finding of undisclosed assets is subject to the Final PPh and the 200% increase penalty, confirming the Net Asset Tax Base calculation and the penalty set by the DJP.

The implications of this decision are critical for tax compliance practices. This ruling underscores that the integrity and consistency of reported data, both for tax and non-tax purposes, are crucial. Corporate Taxpayers must ensure there is no discrepancy between the assets reported in the SPH and the data held by third parties (such as Banks or the Financial Services Authority/OJK) to mitigate the risk of a massive 200% increase penalty. This case serves as a vital lesson that Tax Amnesty compliance requires complete and impeccable asset disclosure, as the tax authority maintains broad access to various forms of Concrete Data.

A Comprehensive Analysis and the Tax Court Decision on This Dispute Are Available Here