Tax Examination in the Modern Era: Purpose, Types, and Timeframes Based on the Latest Regulations

In the Indonesian tax system, which adheres to the self-assessment principle, full trust is given to Taxpayers to calculate, pay, and report their own taxes. However, to ensure fairness and compliance, the Directorate General of Taxes (DGT) has the authority to conduct law enforcement actions through tax examination mechanisms.

Definition and Purpose of Examination

Based on the Law on General Provisions and Tax Procedures (UU KUP), an examination is defined as a series of activities to collect and process data, information, and/or evidence carried out objectively and professionally based on an examination standard [SDSN UU KUP 2023, Article 1 number 25].

Broadly speaking, the purpose of the examination is divided into two main categories as reaffirmed in the latest implementing regulations:

1. Testing Compliance with Tax Obligations: Focuses on the validity of data in the Tax Return (SPT) and the Taxpayer's material compliance [PMK 15 Year 2025, Article 2 paragraph 1].
2. Other Purposes: Carried out in the context of implementing tax laws and regulations not directly related to testing material tax calculation compliance, such as the ex-officio issuance of a Taxpayer Identification Number (NPWP) or data matching [PMK 15 Year 2025, Article 2 paragraph 1].

Transformation of Examination Types

One of the fundamental changes in PMK 15 of 2025 is the introduction of "Examination Types" which replaces the old paradigm that rigidly distinguished between Office Audit and Field Audit. Currently, examinations for testing compliance are classified based on the depth and scope of testing, namely:

1. Comprehensive Examination (Pemeriksaan Lengkap): Covers all items in the Tax Return (SPT) and/or Tax Object Notification (SPOP) in depth [PMK 15 Year 2025, Article 1 number 7].
2. Focused Examination (Pemeriksaan Terfokus): Focuses on one or several items in the SPT and/or SPOP in depth [PMK 15 Year 2025, Article 1 number 8].
3. Specific Examination (Pemeriksaan Spesifik): Performed specifically on one or several items in the SPT, data, or certain tax obligations in a simplified manner. Included in this category is the examination of Concrete Data [PMK 15 Year 2025, Article 1 number 9 and Article 4 paragraph 2].

Examination of concrete data now has a stronger technical basis through PER-18/PJ/2025, where concrete data is defined as data obtained or possessed by the DGT in the form of tax invoices, withholding receipts, or transaction evidence that can be directly used to calculate tax obligations [PER-18 PJ 2025, Article 2].

Examination Criteria: Complete Details

The determination of Taxpayers to be examined is not done arbitrarily but based on strict criteria. Below are the details of the examination criteria as mandated in PMK 15 of 2025.

A. Criteria for Compliance Testing Examination (Article 4 Paragraph 1 PMK 15/2025)

An examination to test compliance with tax obligations is carried out in the event that:

1. The Taxpayer submits an application for a refund of tax overpayment (Article 17B UU KUP);
2. The Taxpayer submits a Tax Return stating an overpayment (other than letter a);
3. The Taxpayer has been granted a preliminary refund of tax overpayment;
4. The Taxpayer submits a Tax Return stating a loss;
5. The Taxpayer conducts a merger, consolidation, expansion, liquidation, dissolution, or will leave Indonesia permanently;
6. The Taxpayer changes the fiscal year or bookkeeping method or performs a revaluation of fixed assets;
7. The Taxpayer does not submit or submits a Tax Return exceeding the determined time limit;
8. The Taxpayer submits an application for the revocation of NPWP;
9. The Taxpayer submits an application for the revocation of PKP confirmation;
10. The Taxpayer is selected based on Taxpayer compliance risk;
11. Other parties do not fulfill obligations to withhold, collect, or report taxes (Article 32A UU KUP);
12. There is concrete data causing the tax due to be unpaid or underpaid;
13. The Taxpayer does not submit SPOP after being warned in writing; and/or
14. Indication that tax due based on DGT data is greater than the SPOP submitted.

B. Criteria for Examination for Other Purposes (Article 4 Paragraph 3 PMK 15/2025)

• Ex-officio issuance or deletion of NPWP; confirmation or revocation of PKP;
• Ex-officio registration or revocation of Land and Building Tax Object;
• Settlement of objections and tax collection;
• Collection of materials for the preparation of net income calculation norms;
• Matching of data and/or information tools;
• Determination of Taxpayers in remote areas or employer Taxpayers in certain areas;
• Determination of VAT places, start of commercial operation, or extension of loss compensation;
• Fulfillment of international information exchange, MAP, and APA;
• Compliance testing on Access to Financial Information;
• Determination of costs at exploration stage and physical examination for endorsements;
• Expansion of tax database and testing tax facilities that have been granted.

Examination Timeframes

Time efficiency is a highlight in PMK 15 of 2025. The examination timeframe is now strictly divided between testing time and final discussion/reporting time.

Additional Provisions:

• Extension: Testing can be extended for max 4 months for group Taxpayers, transfer pricing, or financial engineering [Article 6 paragraph 5].
• Other Purposes: Maximum 4 months total from notification to result report [Article 6 paragraph 8].

With a comprehensive understanding of these latest regulations, Taxpayers are expected to be better prepared to face the examination process and mitigate potential tax risks.

Reference Source Documents:

1. SDSN UU KUP 2023 (Law on General Provisions and Tax Procedures).
2. PP Number 50 of 2022 concerning Procedures for the Exercise of Rights and Fulfillment of Tax Obligations.
3. PMK Number 15 of 2025 concerning Tax Examination.
4. PER-18/PJ/2025 concerning Follow-up on Concrete Data.