Procedures for the Registration, Reporting, and Data Collection of Land and Building Tax Object

On October 18, 2024, the Minister of Finance (the “MOF”) issued Regulation No. 81 of 2024 on Tax Provisions for the Implementation of the Core Tax Administration System (the “Regulation”). The Regulation is an omnibus regulation that consolidates and updates various tax rules to enhance the new Core Tax Administration System. Its objective is to modernize tax administration by ensuring transparency, efficiency, and accountability through advanced IT systems, improved business processes, and comprehensive databases.

This Newsflash discusses provisions relating to the procedures for the registration, reporting, and data collection of the land and building tax object (the “Tax Object”).

Provisions on the Tax Object were previously regulated under MOF Regulation No. 48/PMK.03/2021 on Procedures for the Registration, Reporting, and Data Collection of Land and Building Tax Object (the “Previous Regulation”). The Previous Regulation is revoked and replaced by the Regulation.

We set out the key points under the Regulation relating to the procedures for the registration, reporting, and data collection of the Tax Object.

Registration of Tax Object

Article 71(1) of the Regulation stipulates that every taxpayer is obliged to register their Tax Object to the relevant Directorate General of Tax (“DGT”) no later than 1 (one) month following the fulfillment of subjective requirements. Such subjective requirements are differentiated based on several sectors of the Tax Object.

The following table outlines the milestone of the fulfillment of such subjective requirements:

Taxpayers shall register their Tax Object by way of:

  • electronic submission through Taxpayer’s Portal, other websites or application integrated with DGT’s administration, and/or contact center; or
  • direct submission or via mail courier services to the Tax Office, Tax Service, Counseling and Consultation Office, or other places determined by the DGT.

Upon receiving the application, the Head of the relevant Tax Office shall conduct administrative review of the submission. If the submission is accepted, the Head of Tax Office shall issue a Certificate of Registration for the Tax Object (Surat Keterangan Terdaftar Objek Pajak Pajak Bumi dan Bangunan).

In the case where a taxpayer does not register the Tax Object, then the Head of Tax Office shall carry out an administrative examination or review towards the respective Tax Object. Based on such administrative review, the Head of Tax Office, as authorized, shall then issue a Certificate of Registration for the Tax Object.

Reporting Obligation by Taxpayers for the Registered Tax Object

The reporting obligation by Taxpayers for the registered Tax Object is regulated under Article 79 of the Regulation. In every tax year, taxpayers shall report their registered Tax Object (the “Report”) by using the Tax Object Notification Letter (Surat Pemberitahuan Objek Pajak) sent by the DGT. In this case, the DGT shall convey the Tax Object Notification Letter electronically on certain dates within the tax year (e.g., March 31st of the tax year for payable land and building tax, for the Tax Object in the forestry sector).

After receiving the Tax Object Notification Letter, the relevant taxpayer must submit the Report to the DGT no later than 30 (thirty) days (“Permissible Period”). If the taxpayer is unable to submit the report within such Permissible Period, the taxpayer is allowed to submit a postponement notification letter for the submission of Tax Object Notification Letter (“Postponement Letter”).

After the Report is submitted, the DGT shall conduct a formal review of the submission. The Tax Office shall then conduct a material review of the submission. If incompliances are still found, then the Tax Office shall request clarification which must be responded to by the relevant taxpayer.

Failure by taxpayer to (i) submit the Report within the Permissible Period and (ii) does not submit a Postponement Letter, the Head of Tax Office shall issue a warning letter. If the relevant taxpayer still fails to submit the report after receiving the warning letter, then the Tax Office shall prepare a risk assessment as a proposal to conduct an examination towards the registered Tax Object of the relevant taxpayer.

Data Collection of the Registered Tax Object by the DGT

The Regulation also provides the authorization for the DGT to collect data on the registered Tax Objects for the purpose of conducting material research and risk assessment, as proposals for examination.

The data collection shall consist of (i) office data collection, is carried out by processing the Tax Object data provided in the Tax Object Notification Letter and/or processing the data and information within the DGT’s administration system, and/or (ii) field data collection, which is carried out by inspecting the physical location of the Tax Object and/or other locations outside the physical location of the Tax Object, based on data of the Tax Object.

AKSET

Please contact Inka Kirana (ikirana@aksetlaw.com), M. Raehan A. Fadila (mfadila@aksetlaw.com), or Justin Amadeus (jamadeus@aksetlaw.com) for further information.

 

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