The legal dispute regarding the deadline for disclosing untruthful tax returns (SPT) for VAT periods is at the heart of the conflict between PT BMS and the Directorate General of Taxes. This dispute originated from the Taxpayer’s proactive measure to disclose errors under Article 8 paragraph (4) of the KUP Law before the tax assessment notice was issued, which was subsequently rejected by the tax authorities.
The Respondent insisted that the disclosure was invalid because it was submitted after the Notification of Audit Findings (SPHP) was delivered, citing the technical limitations in Article 8 paragraph (1) of Government Regulation (PP) 74/2011. In court, PT BMS constructed a robust argument based on the hierarchy of legal norms, asserting that Taxpayer rights guaranteed by Law cannot be annulled by a lower-level Government Regulation.
The Board of Judges eventually took a firm stance by applying the principle of lex superior derogate legi inferior (superior law overrides inferior law). The Judges ruled that the "pre-SPHP" limitation in PP 74/2011 contradicts the norm in Article 8 paragraph (4) of the KUP Law, which only limits disclosure until "before the tax assessment notice is issued."
This legal resolution granted a total victory to the Taxpayer and canceled the Input Tax correction of IDR 62.7 billion. The implications of this decision are crucial as they reinforce that the constitutional rights of Taxpayers in the KUP Law must be protected from lower-level administrative restrictions. This case serves as a vital precedent that formal procedures in a tax audit must not negate the material rights of Taxpayers to correct their tax positions as long as the tax assessment has not been signed.
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