Winning Big at the Tax Court: How PT DS Overturned a IDR 140 Billion EOI-Based Correction

Tax disputes involving Exchange of Information (EOI) data are often challenging for taxpayers as tax authorities tend to treat foreign data as absolute truth. The case of PT DS (PUT-004512.15/2022/PP/M.XXB Year 2024) provides a crucial lesson on the importance of proving cash flows to debunk tax authority assumptions. The Respondent issued a revenue correction of IDR 140 billion based solely on identical invoice numbers between PT DS and a Singaporean entity, without further investigating the actual legal structure of the transaction.

During the trial, it was revealed that PT DS implemented a distribution scheme where goods were shipped directly to the end buyer at the request of an intermediary buyer (LYT). The core conflict arose when the Respondent claimed that the price difference between PT DS's invoice and a third party's invoice (TB) was hidden income. However, PT DS successfully proved through audited financial statements and bank statements that not a single rupiah from the end buyer entered their accounts. The Board of Judges eventually emphasized that without proof of actual additional economic capacity, EOI data alone is insufficient to establish tax liability.

This legal resolution confirms that the principle of substance over form must be supported by competent material evidence. For export-oriented manufacturing companies, this case serves as a reminder to not only be administratively neat with invoices but also to be ready with shipment and payment evidence aligned with contracts. PT DS's victory in canceling the entire correction, including the adjustment of fiscal loss compensation, sets a strong precedent that material truth remains supreme in the Indonesian Tax Court.

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