What Is Cooperative Compliance?
Cooperative compliance is a trust-based approach to tax administration in which taxpayers voluntarily disclose uncertain tax positions to the Directorate General of Taxes (DGT) at an early stage, in exchange for faster legal certainty and reduced audit exposure.
Unlike conventional compliance - which is reactive (file a return, wait for audit) - cooperative compliance creates a proactive, ongoing dialogue between the taxpayer and the tax authority.
Indonesia's DGT has been piloting cooperative compliance since early 2026, starting with state-owned enterprises (BUMN) registered at the Large Taxpayer Office (KPP Wajib Pajak Besar).
Legal Basis
The conceptual foundation for cooperative compliance in Indonesia rests on:
- Article 17C of Law No. 6/1983 on General Tax Provisions (KUP) as last amended by Law No. 7/2021 (HPP Law): establishes accelerated refund eligibility for compliant taxpayers as a formal compliance incentive.
- PMK No. 28/2026: confirms that applications for "qualified taxpayer" status (a prerequisite for certain cooperative compliance benefits) are now filed through the Coretax system.
As of June 2026, there is no dedicated PER-DJP regulation that comprehensively governs the full cooperative compliance framework. The DGT is developing this incrementally through the Tax Control Framework (TCF) prototype.
What Is the Tax Control Framework (TCF)?
A Tax Control Framework (TCF) is an internal governance framework that evaluates whether a company's systems, processes, and controls are adequate to ensure accurate tax reporting.
DGT uses TCF maturity as a key input in the cooperative compliance assessment. Higher TCF maturity correlates with greater program benefits, potentially including:
- Priority processing for VAT and income tax refunds
- Reduced frequency of routine audits
- Direct pre-filing engagement with tax officers on uncertain positions
DGT has disclosed a prototype TCF co-developed with selected large taxpayers, with PT Pertamina cited as the primary pilot partner.
How the Program Works
Based on DGT Director General's public statements, the planned mechanism involves:
- Voluntary enrollment: The taxpayer applies through Coretax DGT.
- TCF assessment: DGT evaluates internal tax governance maturity using Compliance Risk Management (CRM) indicators built into DGT's analytics platform.
- Compliance risk scoring: DGT assigns a risk profile to the taxpayer.
- Tier assignment: Based on results, the taxpayer is placed in a compliance tier that determines monitoring intensity and available benefits.
Participants Can Still Be Audited
Critical point: enrolling in cooperative compliance does not grant immunity from tax audits, preliminary evidence investigations, or criminal tax investigations (Articles 29, 31, and 43A of the KUP Law).
DGT has explicitly confirmed this. The program improves the quality of the compliance relationship - it does not waive DGT's supervisory authority.
Who Can Join?
As of June 2026, the program is open only to:
- BUMN registered at the Large Taxpayer Office
- Large private taxpayers with verified compliance records
DGT has indicated plans to expand the program gradually but has not announced a timeline for extending it to medium or small taxpayers.
Potential Benefits
For accepted participants:
- Faster legal certainty on uncertain tax positions
- Proactive engagement before disputes arise
- Potential reduction in routine audit frequency
- Active role in shaping DGT compliance policy