Late Tax Filing in Indonesia: Fines, Interest and Corrections
Late tax filing in Indonesia costs a fixed fine per return; late tax costs monthly interest. How the bill arrives, and how to correct a return or seek relief.
References (5)
- The KUP Law, UU No. 6 Tahun 1983 on general provisions and tax procedures, as amended, latest by UU No. 6 Tahun 2023. Article 7(1) and (2)(e), in their UU No. 28 Tahun 2007 wording, set the fines for late returns and waive them for a company that has stopped doing business but has not been dissolved. Article 36(1)(a), (1a) and (1c), in the same wording, let the tax office reduce or cancel a penalty.
- The KUP Law, Articles 8 and 14, in their UU No. 7 Tahun 2021 wording. Article 8(1), (1a), (2), (2a), (2b) and (4) cover correcting a filed return and disclosure during an audit. Article 14(1)(c) and (2) cover the tax bill for a fine or interest.
- The KUP Law, Article 9(2), (2a), (2b), (2c) and (3), in their UU No. 6 Tahun 2023 wording. They set the interest on late payment and the one-month limit for paying a tax bill.
- PMK No. 81 Tahun 2024. Article 179(1) restates the fines for late returns. Article 181(1) and (3) end the right to correct a return once notice of a compliance audit or a preliminary investigation is delivered.
- PMK No. 118 Tahun 2024, in force 1 January 2025, on applications to reduce or cancel a penalty. Article 23(5) requires the tax to be paid first and one written application for each bill. Article 24(1) allows at most two applications. Article 27(4) allows only an unpaid penalty to be reduced. Article 29 sets the six-month decision.
Late tax filing in Indonesia costs one fixed fine for each return filed late, set by the General Provisions and Tax Procedures Law (the KUP Law). Tax paid late costs interest for each month it is late. When a correction raises the tax, the charge is interest on the extra tax.
A return filed late carries the fine below, and a filed return can be corrected (KUP Law, Article 8(1)). The tax office can bill the fine and the interest afterwards, and it can reduce or cancel a penalty in the cases the law allows.
What late tax filing in Indonesia costs
The fine is a fixed amount for each late return. It does not grow with the delay or with the tax on the return (KUP Law, Article 7(1); Minister of Finance Regulation (PMK) 81/2024, Article 179(1)). The same fine applies where an annual return’s deadline was extended and the extended date is missed.
A company that has stopped doing business but has not been dissolved is not fined (KUP Law, Article 7(2)(e)). Our note on what a dormant company still files covers that case.
What paying late costs
Tax paid after its due date carries interest for each month it is late. The monthly rate is set by the Minister of Finance from the reference interest rate plus 5%, divided by twelve (KUP Law, Article 9(2a) and (2c), as amended by Law 6/2023).
- A part of a month counts as a full month.
- Interest runs for at most 24 months.
The balance of a year’s income tax is paid before the annual return is filed. If it is paid after the filing deadline, interest runs from that deadline (Article 9(2) and (2b)). The payment and filing dates for the main monthly and annual taxes are on the Indonesia compliance calendar.
Correcting a return you have already filed
You can correct a filed return on your own initiative until the tax office delivers notice of a compliance audit, or of an open preliminary investigation (KUP Law, Article 8(1); PMK 81/2024, Article 181(1) and (3)). Once an audit has begun, you can disclose errors in a separate report until the tax office delivers its notice of audit results (Article 8(4)), as described in how a tax audit runs.
Where a correction raises the tax, the charge is interest on the shortfall, at the same monthly rate as late payment. It runs from the filing deadline for an annual return, and from the payment due date for a monthly one (KUP Law, Article 8(2), (2a) and (2b)). A correction that shows a loss or a refund has its own time limit (Article 8(1a)).
When the tax office’s bill arrives
The tax office can bill the fine and the interest on a tax bill (Surat Tagihan Pajak, STP), which has the same legal force as an assessment (KUP Law, Article 14(1)(c) and (2)).
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File and pay
Interest stops on the day the tax is paid (KUP Law, Article 9(2a)).
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The bill arrives
The tax office can issue an STP for the fine and the interest.
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Pay the bill
Pay an STP within one month of its issue date (KUP Law, Article 9(3)).
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Seek a reduction
To ask for a penalty to be reduced, pay the tax first and apply in writing, one application per bill (PMK 118/2024, Article 23(5)).
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The decision
The tax office must decide within six months (PMK 118/2024, Article 29).
You pay an STP within one month of the date it is issued (Article 9(3)). The tax office can reduce or cancel a fine or interest that arose through the taxpayer’s oversight or through no fault of theirs (Article 36(1)(a)). The application is made in writing, one for each bill, and decided within six months, and at most two can be made (Article 36(1a) and (1c); PMK 118/2024, Articles 23(5), 24(1) and 29).
Only an unpaid penalty can be reduced
Only a penalty that has not yet been paid can be reduced (PMK 118/2024, Article 27(4)), and the tax behind it must be paid before you apply (Article 23(5)(a)).
If years have been missed
A letter from the tax office asking you to explain data on a return is an SP2DK (Surat Permintaan Penjelasan atas Data dan/atau Keterangan), and how to answer one is set out separately.
We file the overdue returns for your missed years, prepare corrected returns, and prepare applications to reduce or cancel a penalty in the cases the law allows, through our corporate tax service for a company and personal tax for an individual. The tax office decides each application.