How PT PTPN XIII Successfully Overturned Hundreds of Billions in Double-Counted Interest Corrections 

PT PTPN XIII Tax Dispute: Negative Equity Interest Correction and Self-Correction Proof

The dispute originated from the tax authority's decision to implement significant positive corrections on interest expenses and other operational costs for PT PTPN XIII, based on the negative equity condition as regulated under Article 9 Paragraph (1) of the Income Tax Law jo. PMK 169/2015. The Respondent argued that all borrowing costs should be non-deductible from gross income because the Taxpayer's capital structure did not meet the Debt to Equity Ratio (DER) threshold. The core of the conflict peaked when the Taxpayer asserted that all these costs had actually been self-corrected in their Corporate Income Tax Return (SPT), meaning the Respondent's correction resulted in double taxation on the same tax object.

Judicial Evaluation of Audit Papers and Material Truth Prevalence

In the court proceedings, the Board of Judges conducted a thorough examination of competent evidence, including audit working papers and fiscal reconciliations provided by the Appellant. Although the Respondent questioned the validity of new evidence under Article 26A Paragraph (4) of the KUP Law, the Board of Judges ruled that material truth must prevail, particularly to avoid double counting which violates the principles of tax equity. Consequently, the Board of Judges overturned the corrections for interest expenses, impairment, and inventory reserves as they were proven to have been already corrected by the Taxpayer. However, for CSR expenses and tax penalties, the corrections were upheld as they failed the deductibility test under Article 6 Paragraph (1) of the Income Tax Law due to a lack of supporting documentation.