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Tax Glossary
Tax Refund (Restitusi)
A Tax Refund (Restitusi) is the return of overpaid tax to a taxpayer who has paid, or had withheld/collected, more than the actual tax due. Governed by Articles 17 and 17B of UU KUP and Article 9 paragraph (4) of the VAT Law. The process: apply in the return, DJP audits, and issues an SKPLB if the overpayment is confirmed. Processing times: 12 months for corporate PPh; 12 months for general VAT; 8 months for low-risk PKP (accelerated refund). DJP pays 2% monthly interest on late refunds.
Tax Glossary
Tax Withholding Certificate
A Tax Withholding Certificate is an official document issued by the withholding agent (employer, treasurer, or other payment maker) as proof that tax has been deducted from the taxpayer's income. Governed by Article 23 paragraph (1) of Law No. 28/2007 on General Tax Provisions and Procedures (UU KUP) and Ministry of Finance Regulation No. 168/PMK.03/2023 for PPh 21. For permanent employees, the PPh 21 withholding certificate is Form 1721-A1. For civil servants, military personnel, and police, Form 1721-A2 is used. The certificate must be issued and delivered to the income recipient within one month after the tax year ends, typically by end of January. This document serves three critical purposes: (1) Proof that tax withholding occurred, (2) Tax credit when filing the annual return, (3) Supporting documentation for claiming refunds (restitusi) if there is excess tax paid.
Tax Glossary
Tax Credit
A Tax Credit is tax previously paid or withheld/collected that can be offset (credited) against total tax liability at year-end. Governed by Article 28 of Law No. 36/2008 on Income Tax (UU PPh). Tax credits available to individual taxpayers include: 1. PPh 21: Withheld by employer from salary (Form 1721-A1), 2. PPh 22: Tax on purchases of certain goods or imports, 3. PPh 23: Tax on services received or interest income, 4. PPh 25: Monthly income tax installments paid by the taxpayer, 5. PPh 26: Tax (PPh 24) on foreign-source income. If total tax credits exceed the year's tax liability, the excess may be: (1) Refunded (restitusi) to the taxpayer's bank account, (2) Carried forward (compensated) to the next tax year, (3) Applied to other tax debts (Article 17C, UU KUP).
Tax Guides
Indonesia Tax Refund Guide: Eligibility, Procedure, and How to File
A complete guide to Indonesian tax refunds: legal basis (UU KUP, UU PPN, PMK 28/2026), advance vs regular refund mechanisms, eligibility for each taxpayer category, how to file via Coretax, plus worked examples and FAQ.
Tax Guides
Indonesian VAT 12% Guide 2026: Scope, Rate, and Tax Invoices
A complete explanation of the 12% Indonesian VAT in force in 2026: taxable scope, input-output crediting mechanism, and e-Faktur obligations for taxable enterprises (PKP).