Date Discrepancies Between Tax Invoice and PPh WHT Slip Trigger VAT Dispute: When Does the Taxpayer Prevail?

Tax disputes concerning the Value Added Tax (VAT) Taxable Base (DPP) arising from data mismatch between the Article 23 Income Tax Withholding (WHT) slips and the reported VAT Output continue to be a critical issue. In the context of Decision Number PUT-002226.16/2023/PP/M.XVIIIA Tahun 2025, the Tax Court fully granted the appeal of PT HKR (hereafter referred to as the Appellant), who faced a VAT DPP correction of Rp166,279,158.00. This correction was raised by the Respondent (Director General of Taxes/DGT) based on the finding of WHT slips issued by third parties that were deemed not to have corresponding VAT Invoices, thereby violating the formal requirement for timely issuance of Tax Invoices under Article 13 of the VAT Law. This ruling re-emphasizes that in equalization disputes, the taxpayer's ability to demonstrate substantial reporting of VAT can overturn corrections based solely on formal administrative data disparities.
Core Conflict (DGT & Taxpayer Arguments)
The Respondent based its correction on the equalization principle: every payment for services subject to Article 23 WHT by a business partner should be subject to VAT and recognized as the VAT DPP in the same VAT Period. When a discrepancy arose between the total gross value on the WHT slips and the VAT DPP reported by the taxpayer, the Respondent assumed this difference represented unreported taxable supplies. The DGT highlighted significant date discrepancies between the WHT slip date (when payment/withholding occurred) and the Tax Invoice date (when issued), alleging a violation of the obligation to issue Tax Invoices when the VAT becomes due. The Appellant, conversely, admitted that the Tax Invoices were issued late but stressed that all questioned transactions had been covered by Tax Invoices and reported. The Appellant successfully demonstrated that, cumulatively, the total VAT DPP reported during the period exceeded the total gross value of the WHT slips, proving substantially that no VAT was due and left uncollected.
Resolution (Panel of Judges’ Opinion)
The Panel of Judges (Majelis Hakim) framed the core issue as one of proof. After reviewing all documents and testimony, the Panel was convinced by the evidence provided by the Appellant, specifically a detailed reconciliation table linking each Article 23 WHT slip to the corresponding VAT Invoice that had been issued and reported. Despite the formal flaw regarding the timing of the Tax Invoice issuance, the Panel judged that the fact of VAT reporting, which substantially covered the entire value of the disputed supplies, was the more dominant factor. Based on Article 78 of the Tax Court Law, the Panel concluded that the DGT’s correction of the VAT DPP for Rp166,279,158.00 could not be sustained. This decision effectively prioritizes the material truth and the substance of the taxpayer's reporting over mere administrative weakness or third-party data inconsistency.
Analysis and Impact (Implications of the Ruling)
This ruling provides a valuable lesson for taxpayers, particularly service providers who frequently receive Article 23 WHT slips from multiple partners. The implication of this decision is the affirmation that the DGT’s VAT and Article 23 WHT equalization results do not automatically constitute a robust basis for correction if the taxpayer can present comprehensive counter-evidence. Taxpayers must always be prepared to reconstruct and present a convincing flow of funds and reconciliation documents to assure the Panel that the transactions have been recognized and VAT has been paid/reported. Nevertheless, taxpayers are still strongly advised to improve their document administration (Tax Invoices and WHT slips) to minimize formal disputes, especially compliance with the deadline for issuing Tax Invoices.

The case of PT HKR confirms that in tax litigation, the substantive truth of VAT reporting supported by detailed evidence can defeat corrections based solely on PPh Article 23 and VAT equalization data discrepancies. The key to the taxpayer's victory lies in superior documentary evidence.

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