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Tax Glossary
Tax Assessment Letter (SKP)
A Tax Assessment Letter (SKP) encompasses SKPKB (underpayment), SKPKBT (additional underpayment), SKPLB (overpayment), and SKPN (nil). Governed by Article 1 paragraph 15 of UU KUP (No. 28/2007). SKPs are issued by the DJP after auditing or examining a taxpayer's return. The statute of limitations for issuing an SKP is 5 years from the end of the tax period or year. Taxpayers who disagree may file an objection within 3 months of the SKP date.
Tax Glossary
Tax Assessment Statute of Limitations
The Tax Assessment Statute of Limitations sets the deadline for DJP to issue an SKP. Under Article 13 of UU KUP, DJP may not issue an SKP more than 5 years after the end of the tax period, partial tax year, or tax year. However, the limitation is extended to 10 years if the taxpayer is proven to have committed a tax crime. After the limitation expires, DJP loses the right to assess or collect tax for that period. The collection statute of limitations is separately regulated under Article 22 of UU KUP at 5 years from SKP issuance or tax debt arising.
Tax Glossary
Tax Collection Letter (STP)
An STP (Tax Collection Letter) is used to collect tax and/or administrative penalties in the form of interest and/or fines. Governed by Article 14 of UU KUP. DJP issues an STP when: current-year income tax is unpaid or underpaid; a return has arithmetic or writing errors leading to underpayment; a taxpayer is subject to penalty interest or fines; a PKP fails to issue or issues a late Tax Invoice. STP has the same legal force as an SKP. Payment is due within 1 month of the STP issuance date.
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.
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.