Without Attendance Lists and Wage Records, PPh 21 Equalization Differences Remain Taxable Objects 

Tax Dispute: Correction of Income Tax Article 21 Tax Base Through Expense Equalization Techniques

Tax authorities hold full mandate to conduct corrections through expense equalization techniques, as stipulated under Article 12 paragraph (3) of the KUP Law and Article 21 of the Income Tax Law. This dispute focuses on a positive correction of the Income Tax Article 21 Tax Base amounting to IDR 1,604,316,045.00, arising from the Taxpayer's inability to prove that such payments constituted daily wages below the withholding threshold of IDR 450,000 per day.

Origin of the Conflict: Discrepancy in Wage Expenses and Freelance Non-Taxable Thresholds

The core conflict began when the Respondent identified a discrepancy between the salary/wage expenses in the Petitioner’s financial statements and the objects reported in the Income Tax Article 21 returns. The Respondent argued that without valid supporting documents, the difference is deemed taxable employment income. Conversely, the Petitioner maintained that the value represented accumulated payments to freelance project workers who individually did not exceed the daily non-taxable threshold per PMK 102/PMK.010/2016, yet this claim lacked sufficient individualized evidence.

Judicial Review: The Burden of Proof Regarding Equalization Findings

The Board of Judges, in their legal consideration, emphasized that this dispute is purely a matter of evidence (bewijsrecht). Although the Petitioner submitted documents such as Project Salary Forms and internal transfer records, these data could not be specifically correlated to validate the disputed amount of IDR 1.6 billion. The Board held that the burden of proof lies with the Taxpayer to refute the tax authority’s equalization findings with competent and relevant evidence.

Implications for PT PMAC: Administrative Weaknesses in Casual Labor Documentation

This decision has serious implications for PT PMAC and other construction service providers. The lack of meticulous administration for casual labor—such as daily attendance lists, worker identification, and individual payment breakdowns—becomes a fatal weakness during tax audits. The broader implication is the reinforcement that any expense claimed as a non-taxable object must be provable in detail, rather than through mere cumulative assumptions.

In conclusion, the Board of Judges rejected the appeal because the Petitioner failed to meet the standards of material evidence. This case serves as a crucial reminder for Taxpayers that formal documentation of daily wage payments is the primary legal shield when facing equalization techniques employed by the Directorate General of Taxes.