Post-Audit Navigation: Roadmap for Legal Remedies and Tax Disputes

The conclusion of a tax audit process is marked by the issuance of a legal product in the form of a Tax Assessment Letter (SKP) or Tax Collection Letter (STP). For Taxpayers, receiving an SKP is not the end of the road. If there is a disagreement with the audit results, the Indonesian tax system, through the KUP Law and its implementing regulations such as Government Regulation (PP) Number 50 of 2022 and MoF Regulation (PMK) Number 118 of 2024, provides various legal avenues to seek justice.

Broadly speaking, legal remedies are divided into three main clusters: litigation path (material disputes), administrative path (procedural corrections/clerical errors), and sanction facility path (relief).

1. Litigation Path: Objection, Appeal, and Judicial Review

This is the standard mechanism for Taxpayers who reject the material or substance of the tax dispute (principal tax).

• Objection (Keberatan): The first step is filing an Objection to the Director General of Taxes regarding an Underpayment, Nil, or Overpayment SKP, or withholding by third parties. An absolute requirement for this submission is that the Taxpayer must pay the amount of tax agreed upon during the Closing Conference [PMK 118 of 2024, Article 10].
• Appeal (Banding): If the objection decision is unsatisfactory, the Taxpayer may file an Appeal to the Tax Court. However, Taxpayers must be wary of sanction risks. If the appeal is rejected or partially granted, the Taxpayer is subject to an administrative sanction of 60% (sixty percent) of the tax amount based on the appeal decision minus the tax payment made before the objection [PP 50 of 2022, Article 35].
• Judicial Review (Peninjauan Kembali): An extraordinary legal remedy to the Supreme Court can be taken if the Appeal Decision is considered not in accordance with the law.

2. Administrative Path: Correction and Cancellation (Articles 16 & 36 of KUP Law)

This path is used for human errors, administrative mistakes, or procedural violations by the tax authorities.

• Correction (Pembetulan - Article 16 KUP Law): Taxpayers may request a correction of an SKP or STP containing clerical errors, calculation errors, or errors in the application of tax provisions (e.g., wrong tariff or sanction application) [PMK 118 of 2024, Article 2].
• Reduction or Cancellation (Article 36 paragraph 1 letters b & d KUP Law): This facility is detailed in PMK 118 of 2024. Taxpayers may request:
  1. Reduction/cancellation of an incorrect SKP.
  2. Cancellation of audit results that are procedurally defective. Procedural defects specifically refer to conditions where the audit was conducted without the delivery of the Notification of Audit Results (SPHP) or without a Closing Conference (PAHP). If an SKP is cancelled for this reason, the audit must continue by executing the missed procedures [PMK 118 of 2024, Articles 44 & 46].

3. Facility Path: Reduction or Elimination of Administrative Sanctions (Article 36 paragraph 1 letter a of KUP Law)

This path is specifically for Taxpayers who admit the principal tax but feel burdened by the administrative sanctions or feel that the sanctions arose not due to intentional fault.

• Scope: The Director General of Taxes may reduce or eliminate administrative sanctions in the form of interest, fines, and surcharges owed, in the event that such sanctions are imposed due to Taxpayer's oversight/inadvertence (kekhilafan) or not due to their fault [PMK 118 of 2024, Article 21 letter a].
• Criteria for "Oversight" or "Not at Fault": Based on Article 27 paragraph (3) of PMK 118 of 2024, conditions that may be considered include:
  • Unintentional Taxpayer oversight.
  • Taxpayer ignorance of new tax regulations.
  • Third-party errors or DJP administrative errors.
  • Natural disasters or other force majeure conditions.
  • Provable liquidity/financial difficulties (e.g., consecutive losses).
• Submission Mechanism:
  1. Frequency: Applications can be submitted at most 2 (two) times [PMK 118 of 2024, Article 24].
  2. Absolute Condition: To apply, the SKP must not be currently under objection. If an objection has already been filed, the Taxpayer must withdraw the objection first [PMK 118 of 2024, Article 23 paragraph 2].
  3. Decision Timeline: The DGT must issue a decision within a maximum of 6 (six) months. If the time limit passes, the application is deemed granted [PMK 118 of 2024, Article 29].

4. Lawsuit (Gugatan)

A lawsuit is filed to the Tax Court not for tax material (principal dispute), but regarding procedural matters such as the execution of a distress warrant, confiscation, or issuance of decisions related to the implementation of tax decisions [SDSN UU KUP 2023, Article 23].

Conclusion

Taxpayers have extensive rights to pursue post-audit legal remedies. The choice of path—whether Litigation (Objection), Administrative (Correction/Cancellation), or Facility (Sanction Elimination)—must be based on the nature of the issue. If the dispute is on legal interpretation, the Objection path is appropriate. However, if the Taxpayer merely made an "oversight" and wants to request sanction relief, the path of Article 36 paragraph (1) letter a is a wiser solution. With the enactment of new regulations and the Supreme Court's affirmation, data transparency from the audit stage becomes the key to victory in any legal remedy.

Reference:

1. SDSN UU KUP 2023 (Law on General Provisions and Tax Procedures).
2. PP Number 50 of 2022 (Rights and Fulfillment of Tax Obligations).
3. PMK Number 118 of 2024 (Rectification, Objection, and Cancellation).
4. SEMA Number 2 of 2024 (Supreme Court Plenary Meeting Result).
5. PER-18/PJ/2025 (Follow-up on Concrete Data).
6. SE-15/PJ/2018 (Audit Policy).