How Does the DGT Supervise Taxable Entrepreneurs?

The Directorate General of Taxes (DGT) supervises Taxable Entrepreneurs to assess their compliance with tax obligations and ensure that they continue to meet the requirements applicable to Taxable Entrepreneurs.

Under PER-40/PJ/2013, the supervision framework applies to all Taxable Entrepreneurs registered in the tax administration system. The supervision is based on Monthly VAT Returns, as well as tax data and information obtained from internal and external sources.

In principle, supervision is conducted systematically and continuously every six Tax Periods. However, it may be carried out earlier under certain circumstances, including where a Taxable Entrepreneur fails to submit a Monthly VAT Return and/or submits returns reporting nil Input VAT and Output VAT within the periods specified under the regulation. Supervision is also conducted in the Tax Period in which a Taxable Entrepreneur submits a VAT return reporting an overpayment and requesting a refund.

The supervision process begins when a Taxable Entrepreneur is included in the Monitoring Nomination List generated through the DGT’s information system. The list serves as an early warning mechanism for identifying potential compliance issues.

The Account Representative subsequently reviews the Monthly VAT Returns, tax data, and information available to or obtained by the DGT. The results of the review are documented in a Research Results Report (Laporan Hasil Penelitian/LHPt).

Through this mechanism, the supervision of Taxable Entrepreneurs is carried out systematically and continuously throughout the period in which they remain registered in the tax administration system.