Failed to Pay Audit Results, PT SHSI’s Objection Rights Vanish in Tax Court

Tax Dispute: Formal Requirements and Payment Obligations in Objection Filing for PT SHSI

The failure to meet formal requirements in filing an objection often becomes a stumbling block for Taxpayers seeking substantive justice. The dispute between PT SHS International (PT SHSI) and the Directorate General of Taxes (DGT) in Decision Number PUT-012563.99/2023/PP/M. XVIB Year 2025 serves as clear evidence that compliance with procedural regulations is absolute and non-negotiable. The core of the conflict began when the Defendant issued a Notification Letter stating that the Plaintiff's objection did not meet formal requirements because the tax amount agreed upon in the Final Audit Discussion (FAD) had not been paid. The Plaintiff argued that there was an administrative error in writing the nominal amount on the FAD Minutes, but this argument failed to sway the Defendant, who adhered strictly to the data in the Audit Result Report (ARR).

Judicial Consideration: Cumulative Requirements of the KUP Law

In its legal considerations, the Board of Judges emphasized that the provisions of Article 25 paragraph (3) letter g of the Law on General Tax Provisions (KUP Law) are cumulative requirements that must be met for a letter of objection to be considered valid and processed further. The Judges found legal facts that the Plaintiff had signed the approval sheet in the FAD but failed to prove payment of the agreed portion before filing the objection. The resolution of this case ended in the rejection of the lawsuit in its entirety, as the Board's authority in formal lawsuits is limited to testing the legality of administrative procedures carried out by the tax authorities.

Implications: Administrative Accuracy in the Audit Phase

This decision has serious implications: a small administrative error during the audit phase, such as an incorrectly written nominal that has already been agreed upon, can close the door to legal remedies if not immediately corrected through the appropriate mechanism before the objection stage begins. In conclusion, thoroughness during the audit phase and fulfillment of payment obligations for agreed-upon taxes are absolute prerequisites for successful tax litigation in Indonesia.

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