No SPHP and No Closing Conference Means No Tax Bill! Key Lessons from a Taxpayer’s Victory at the Indonesian Tax Court

The Issuance of VAT SKPKB and Mandatory Procedures Dispute

The issuance of the VAT Underpayment Tax Assessment Notice (SKPKB) against Mr. A was declared legally flawed by the Tax Court Judges for violating mandatory formal procedures. In this lawsuit, the primary focus was on the tax authority's compliance with Article 36 paragraph (1) letter b of the KUP Law, which mandates the delivery of the Notification of Audit Findings (SPHP) and the conduct of a Closing Conference.

The Core Conflict of Procedural Rights Violation

The core conflict arose when the Plaintiff felt that his procedural rights were ignored by the Defendant during the 2017 tax audit process. The Plaintiff argued that he never legally received the SPHP and was not given the opportunity to provide feedback in a final discussion forum, yet an SKPKB was suddenly issued. Conversely, the Defendant, who processed the application for the annulment of the assessment, rejected the Plaintiff's request through Decision Number KEP-03622/NKEB/WPJ.01/2023.

Legal Considerations by the Panel of Judges

In their legal considerations, the Panel of Judges emphasized that the procedures for delivering the SPHP and conducting the Closing Conference are not merely administrative formalities but are instruments for protecting the Taxpayer's constitutional right to defend their arguments. Since the Defendant failed to appear in court to provide valid counter-evidence regarding the SPHP delivery and the closing discussion minutes, the Panel was convinced that the audit process was conducted in disregard of the prevailing legal procedures.

The Resolution of Dispute and Due Process of Law

The resolution of this dispute was the annulment by law of the issued tax assessment. The verdict of the Panel of Judges granted the Plaintiff's lawsuit in its entirety. The implication of this decision reaffirms the supremacy of law in tax administration, where the validity of a tax legal product (SKP) depends heavily on the due process of law followed by the tax authorities.

In Conclusion

In conclusion, the Taxpayer's victory in this case serves as a warning to tax authorities to always be disciplined in carrying out audit stages. For Taxpayers, this decision provides legal certainty that arbitrary actions in audit procedures can be annulled through a lawsuit at the Tax Court.

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