Summary
A tax refund (restitusi) returns overpaid tax from the state treasury to the taxpayer. Two mechanisms exist: an advance refund processed quickly through formal review, and a regular refund processed through full audit. Since 1 May 2026, advance refund procedures are governed by PMK 28/2026, which revokes PMK 39/2018 through PMK 119/2024.
What Is a Tax Refund
A tax refund returns money from the state treasury to a taxpayer due to tax overpayment. Overpayment can occur when withheld or collected tax exceeds the tax actually owed, or when prepaid installments exceed the final annual tax liability.
A refund is a statutory right of the taxpayer. It is filed through a tax return that reports an overpayment, either an annual income tax return (SPT Tahunan PPh) or a monthly VAT return (SPT Masa PPN). After filing, DJP processes the request through one of two paths depending on the taxpayer's profile.
Legal Basis
The legal framework for tax refunds rests on several regulations:
- Law No. 6 of 1983 (UU KUP) as last amended by UU HPP, especially Articles 11, 17, 17B, 17C, and 17D.
- Law No. 8 of 1983 (UU PPN) as last amended, especially Article 9 paragraphs (4), (4a), (4b), and (4c).
- PMK 28 of 2026 on Procedures for Advance Refund of Tax Overpayment. Effective 1 May 2026, replacing the chain of older regulations from PMK 39/2018 through PMK 119/2024.
- Director General of Taxes Regulations including Coretax implementation guidance.
Two Refund Mechanisms
DJP provides two refund paths that differ in speed and depth of testing.
Advance Refund (Accelerated)
This path is governed by Articles 17C and 17D of UU KUP and Article 9(4c) of UU PPN. It runs through formal review: DJP checks document completeness and formal compliance, then issues a decision faster than a full audit. The refund is paid first, with substantive verification possible later through audit.
Regular Refund (Through Audit)
Taxpayers who do not qualify for an advance refund must go through audit. Under Article 17B of UU KUP, the audit must conclude within 12 months from the date the request is received complete. If DJP fails to issue a decision in that period, the request is deemed approved and a tax overpayment assessment (SKPLB) is issued.
Rates and Limits: Who Qualifies for Advance Refund
Under PMK 28/2026, three groups qualify for advance refund.
Group 1: Article 17C UU KUP (Specific Criteria)
Taxpayers with specific criteria designated by DJP, typically compliant taxpayers with a strong compliance track record. Membership in this group is granted formally through a DJP decision.
Group 2: Article 17D UU KUP (Specific Requirements)
This group is the most commonly used route. Four subgroups:
| Subgroup | Overpayment Limit |
|---|---|
| Individual non-business taxpayer (annual PPh) | No nominal cap |
| Individual taxpayer with business or independent profession | Up to IDR 100 million |
| Corporate taxpayer, turnover IDR 0 to IDR 50 billion | Up to IDR 1 billion |
| PKP, monthly VAT return | Up to IDR 5 billion |
Group 3: Low-Risk PKP (Article 9(4c) UU PPN)
PMK 28/2026 sets a new threshold: a PKP must conduct exports of taxable goods (BKP), supplies of BKP/JKP to VAT collectors, supplies on which VAT is not collected, exports of intangible BKP, or exports of taxable services totaling at least 80 percent of total supplies and exports.
How to File a Refund
The filing process follows these steps.
Step 1. Confirm an overpaid return. A refund starts from a return that reports overpayment. Make sure income tax or VAT calculations are correct and supported by source documents.
Step 2. Choose the refund option in the return. When completing an overpaid return, the taxpayer selects the refund option. The alternative is to carry the overpayment forward as a credit against the next tax period. For an advance refund, tick the corresponding option if the system provides one.
Step 3. Submit via Coretax. From 2026, all tax services run on DJP's Coretax. Taxpayers submit applications and supporting documents through their Coretax account.
Step 4. Provide supporting documents. For PPh: withholding receipts, payment slips, and bank statements. For VAT: input tax invoices, output tax invoices, export documents (PEB), and relevant contracts.
Step 5. Wait for review or audit. If the request qualifies for advance refund, DJP runs a formal review. If not, an audit is conducted within a maximum of 12 months.
Step 6. Receive decision and disbursement. The outcome is set out in an Advance Refund Decision Letter (SKPPKP) or a Tax Overpayment Assessment (SKPLB). Disbursement is made to the taxpayer's bank account.
Worked Examples
Case 1: Employee with overpaid annual return
Budi is an employee whose employer withheld PPh Article 21 of IDR 25 million during 2025. After accounting for non-taxable income (PTKP) status K/1 and other tax credits, his actual PPh liability is only IDR 22 million. The overpayment is IDR 3 million.
Because Budi is an individual non-business taxpayer, he qualifies for an advance refund under Article 17D UU KUP. There is no nominal cap for this subgroup. Budi files through the annual return, selects the refund option, and waits for the formal review by DJP.
Case 2: Exporting PKP
PT Cahaya Ekspor records total supplies of IDR 10 billion in the April 2026 tax period. Of this, IDR 9 billion is BKP exports. Creditable input VAT is IDR 800 million while output VAT is IDR 200 million (domestic supplies). Overpayment is IDR 600 million.
PT Cahaya's export composition is 90 percent, above the 80 percent threshold. So PT Cahaya qualifies as a low-risk PKP and can request an advance refund through the fast track under PMK 28/2026.