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Tax Glossary
EFIN (Electronic Filing Identification Number)
EFIN (Electronic Filing Identification Number) is a 10-digit identification code issued by Indonesia's Directorate General of Taxes (DJP) to taxpayers, serving as the activation code for electronic tax services including e-Filing, e-Form, and e-Billing on the DJP Online portal. Governed by Regulation of the DJP Director No. 41/PJ/2015 as amended by No. 32/PJ/2017. EFIN is confidential and personal; each taxpayer receives one EFIN for life (while registered active with DJP). To obtain an EFIN, the taxpayer submits a request to the registered Tax Service Office (KPP) in person with photocopies of ID and NPWP card, or through DJP-approved channels such as the Coretax application. EFIN differs from a password: EFIN is the identifier, while a password (PIN/access code) is additional security typically created by the taxpayer on first login.
Tax Glossary
PKP Registration
PKP Registration (Pengukuhan PKP) is the formal process by which the KPP registers an entrepreneur as a VAT-registered taxpayer, either upon application or ex officio. Governed by Article 2 paragraph (2) of the VAT Law and PER-02/PJ/2018. Entrepreneurs whose turnover exceeds Rp 4.8 billion in a fiscal year must apply for PKP status by the end of the following month. Upon registration, the entrepreneur receives a PKP Certificate and must issue e-Faktur from the following month. Late registration may result in sanctions.
Tax Glossary
Tax Audit
A Tax Audit is a structured process of collecting and processing data, information, and/or evidence conducted objectively and professionally to test taxpayer compliance or for other purposes. Governed by Article 29 of UU KUP and PMK No. 17/PMK.03/2013. Two types: Field Audit (at taxpayer premises, 4-8 months) and Office Audit (at KPP, 3-6 months). DJP may audit overpayment returns, loss returns, or randomly selected returns. Taxpayers have the right to receive a Draft Audit Report (SPHP) before an SKP is issued.
Tax Glossary
NPWP (Tax Identification Number)
NPWP (Nomor Pokok Wajib Pajak), or Tax Identification Number in English, is a unique 16-digit identifier issued by Indonesia's Directorate General of Taxes (DJP) to every taxpayer for tax administration purposes. Governed by Article 2 of Law No. 28/2007 on General Tax Provisions and Procedures (UU KUP). Since January 1, 2024, per Ministry of Finance Regulation No. 112/PMK.03/2022, NPWP integrates the National Identification Number (NIK) for individual resident taxpayers. Without an active NPWP, taxpayers face income tax withholding at 120% of the normal rate (Article 21 paragraph 5a of Law No. 36/2008 on Income Tax). NPWP is mandatory for: (1) Individuals with income above the non-taxable threshold (PTKP), (2) Entrepreneurs conducting business in Indonesia, (3) Recipients of various income sources. An NPWP is required to file tax returns, claim refunds, transact with government agencies, and open bank accounts.
Tax Glossary
Taxpayer
A Taxpayer (Wajib Pajak) is any individual or entity, including tax payers, withholding agents, and tax collectors, that holds tax rights and obligations under Indonesian tax law. Defined in Article 1 paragraph 2 of Law No. 28/2007 on General Tax Provisions and Procedures (UU KUP). Individual Taxpayers include any person with income above the non-taxable threshold (PTKP) from any source: employment, business, investments, or other sources. Citizenship is not a determining factor; both Indonesian residents and foreign nationals domiciled in Indonesia can be individual taxpayers. Corporate Taxpayers (Wajib Pajak Badan) include all legal entities established or domiciled in Indonesia, such as: Limited Liability Companies (PT), Partnerships (CV), Firms, Cooperatives, Foundations, and other legal entities. Corporations must pay income tax (PPh Badan) on net profits. Core taxpayer obligations: (1) Register and obtain NPWP, (2) Calculate tax liability, (3) Pay taxes on time, (4) File annual returns and supporting documents.
Tax Glossary
Tax Objection
A Tax Objection is a legal remedy filed by a taxpayer with the DJP when disagreeing with a tax assessment or third-party withholding. Governed by Article 25 of UU KUP. Requirements: written in Indonesian, states the desired tax amount, provides clear reasons, filed within 3 months of receiving the SKP or withholding. Filing an objection does not suspend payment of the disputed tax. DJP must decide within 12 months. If the objection is rejected and the taxpayer does not appeal, a 50% surcharge applies.