Non-Active Company Wins Salary Dispute: DGT's Own PPh 21 Data Backfires on Correction

In tax disputes involving non-active companies, tax auditors often immediately disqualify all salary expenses due to the absence of bookkeeping documents during the audit. However, Tax Court Decision Number PUT-004960.15/2021/PP/M.XVIIIA Year 2025 provides a crucial lesson: the Directorate General of Taxes' (DGT) own internal data, specifically the Audit Result Report (LHP) regarding Income Tax Article 21 (PPh 21), can be the ultimate evidence that invalidates such corrections.

Discussion: DGT's Inconsistency and the Material Truth

This case began when PT BML (the Appellant) had its salary expenses of IDR 4.3 billion corrected by the DGT. The DGT's reason was classic: the Taxpayer did not submit the General Ledger and supporting evidence during the field audit, so the DGT used Article 26A paragraph (4) of the KUP Law to disallow the expenses. The DGT assumed that since the company was closed and not operating, the salary claim was dubious.

However, an interesting fact was revealed in court. The Appellant was astute in spotting a loophole in the Audit Result Report (LHP) created by the DGT itself. In the LHP, the DGT acknowledged that the Appellant had reported the Article 21 Income Tax Return with a Tax Base (DPP) of IDR 4.3 billion—a figure exactly matching the salary expense corrected in the Corporate Income Tax.

The Panel of Judges viewed this as a fatal inconsistency. On one hand, the DGT acknowledged the existence of the PPh 21 tax object (salaries paid) and the tax had been received by the state. On the other hand, the DGT refused to recognize the payment as an expense in the Corporate Income Tax. Coupled with salary transfer proofs submitted in court, the Judges decided that the salary expense was real (material truth).

Implication: The Power of Data Equalization

This decision confirms that the DGT cannot arbitrarily correct salary expenses if the PPh 21 on those salaries has been paid and acknowledged. For Taxpayers, this is a reminder of the importance of equalization (reconciliation) between Salary Expenses in Corporate Income Tax and the Tax Base in PPh 21 Returns. If the figures match and the tax is deposited, the Taxpayer's position is legally strong, even if bookkeeping documents were temporarily missing during the audit.