Administrative Penalty Reduction and Annulment

You can apply for the reduction or annulment of administrative penalty indicated in your Notice of Tax Assessment or Notice of Tax Collection.

  1. You can apply for administrative penalty reduction if in your opinion the penalty calculation in the Notice of Tax Assessment/Notice of Tax Collection is incorrect;
  2. You can apply for administrative penalty annulment if in your opinion the said administrative penalty is not supposed to be imposed.

 

What are the penalties that can be reduced or annulled?

Administrative penalties in the form of interest, fines, and increases payable pursuant to the tax laws and regulations if the penalties are imposed due to the Taxpayer's negligence or not due to their misconduct.

APPLICATION REQUIREMENTS

  1. One (1) application is submitted for 1 (one) Notice of Tax Assessment or Notice of Tax Collection only, unless the application is submitted for Notices of Tax Collection resulting  from tax underpayment based on a Tax Assessment, in which case provided that it is related to the same Notice of Tax Assessment, 1 (one) application may be submitted for more than one Notice of Tax Collection;
  2. The application must be submitted in writing in Indonesian;
  3. State the amount of administrative penalty according to the Taxpayer accompanied by reasons;
  4. The application must be submitted to the Tax Office (KPP) where the Taxpayer is registered; and
  5. The letter of application is signed by the Taxpayer, and if it is signed by someone other than the Taxpayer, the letter of application must enclose a special power of attorney.

 

TERMS OF APPLICATION

  1. Against the Notice of Tax Assessment or Notice of Tax Collection the reduction or annulment is applied for, no other legal recourses are taken, such as objection and application for Notice of Tax Assessment/Notice of Tax Collection reduction or cancelation;
  2. The application can be submitted by the Taxpayer maximum 2 (two) times;
  3. The second application must be submitted no later than 3 (three) months following the delivery date of the decision letter of the Director General of Taxes on the first application, unless the Taxpayer can prove that the said period cannot be met due to circumstances beyond their control;
  4. The second application is submitted for the same Notice of Tax Assessment or Notice of Tax Collection on which the decision letter of the Director General of Taxes has been issued.

COMPLETION PERIOD OF APPLICATION

Your application will be processed for maximum 6 (six) months following the receipt of a complete application.

 

WITHDRAWAL OF APPLICATION

You can withdraw your application through a letter of withdrawal:

  1. Submitted in writing in Indonesian and stating reasons for withdrawal;
  2. Submitted to the Tax Office where the Taxpayer is registered; and
  3. Signed by the Taxpayer, and if it is signed by someone other than the Taxpayer, the letter of withdrawal must enclose a special power of attorney.

 

The Taxpayer having withdrawn their application will not be entitled to resubmit the same application that has been withdrawn.