Tax authorities often harbor high suspicion toward overseas travel expenses deemed to have no direct link with domestic operations. In the PT HIM dispute, the Respondent made a positive correction to Travel Expenses to Thailand and Japan, arguing that these costs did not meet the criteria for Getting, Collecting, and Maintaining income (3M) as regulated in Article 6 paragraph (1) of the Income Tax Law. The Respondent viewed these activities as more ceremonial or having no direct economic impact on the company in Indonesia.
However, PT HIM successfully refuted this assumption by presenting concrete evidence such as correspondence, tickets, and global conference agendas. The company emphasized that the travel aimed to conduct strategic business benchmarking among subsidiaries under the regional headquarters. The Panel of Judges agreed that the exchange of strategic information through physical meetings is an integral part of risk management and business development. The judges' resolution to cancel this correction confirms that travel expenses remain deductible as long as the Taxpayer can provide documentation linking the activity to corporate strategic interests. The implication of this decision serves as a reminder for Taxpayers to always document the results or outputs of every business trip to avoid corrections for expenses considered non-operational.
A Comprehensive Analysis and the Tax Court Decision on This Dispute Are Available Here
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