Without Tax Endorsement, VAT Facilities to Batam Could Lead to Massive Corrections.

Tax Dispute Analysis: DGT Endorsement Requirements for Non-Collected VAT in the Batam Free Trade Zone

The positive correction of VAT non-collected sales amounting to IDR 238,180,290.00 was executed by the Respondent because the Petitioner failed to present documents endorsed by Directorate General of Taxes (DGT) officials. Under Article 8 paragraph (1) of PMK-45/PMK.03/2009, the facility for non-collected VAT on deliveries of Taxable Goods from other areas within the customs territory to the Batam Free Trade Zone strictly requires an endorsement on the Tax Invoice. The core conflict lies between economic substance—where the buyer is factually domiciled in Batam—and the fulfillment of formal obligations stipulated in specific Free Trade Zone regulations.

Judicial Considerations: Strict Formal Compliance as a Prerequisite for Tax Incentives

In its legal consideration, the Board of Judges emphasized that tax facilities are highly restricted and must cumulatively meet all established administrative requirements. The Petitioner's failure to provide physical endorsement or system validation of the goods' entry into the Free Trade Zone resulted in the legal forfeiture of the right to the facility. This legal resolution shows that the Board of Judges prioritizes formal compliance as an absolute prerequisite for utilizing tax incentives. The implication for Taxpayers is the vital importance of conducting regular reconciliations of logistic documents and ensuring every delivery to special zones is validated by the tax authority's system to mitigate correction risks during audits or litigation.