VAT Underpayment Assessment Annulled! Tax Court Protects Taxpayers from Invoice Reporting Errors by Counterparties

The Principle of Good Faith and Prepopulated e-Faktur: Analysis of Tax Court Decision for PT GB

Tax Court Decision Number PUT-005434.16/2024/PP/M.VA Tahun 2025 substantially highlights the principle of good faith in claiming Input Tax (PM) credit while affirming the central role of the prepopulated e-Faktur 3.0 system as evidence of formal compliance for the recipient. In the dispute between PT GB and the Director General of Taxes (DGT), the Panel of Judges annulled the Input Tax correction amounting to Rp3,652,325.

Core Conflict and Legal Arguments

The core conflict stemmed from the DGT rejecting the PM because the confirmation results indicated that the Tax Invoice (FP) had not been reported by the issuer or counterparty. The DGT argued that this rejection was supported by Article 9 paragraph (8) letters b and h of the VAT Law, which stipulate that PM must be directly related to business activities (3M) and must meet formal or material requirements.

Conversely, PT GB argued that the entire PM met the material requirements and had met the formal requirements because the FP was already prepopulated in e-Faktur. In their view, the prepopulated system serves as a formal validation from the tax authority's own infrastructure, which should protect the buyer from the administrative failures of the supplier.

Panel of Judges' Consideration and Conclusion

The Panel of Judges sided with the Applicant, stating that the Taxpayer receiving the Tax Invoice cannot be burdened with responsibility for the administrative negligence of the seller or supplier in reporting. The rejection of PM based solely on failed confirmation results is deemed contrary to the principles of justice and legal certainty. Consequently, the correction made by the DGT could not be upheld, reinforcing the protection of taxpayers who act in good faith.