Under Indonesian tax law, financial statements are an inseparable part of the annual tax return, especially for corporate taxpayers. Without proper financial statements, a tax return may be deemed incomplete and considered not filed. Therefore, understanding how financial statements are treated for tax reporting purposes is crucial for taxpayers.
Financial Statements Under the Latest Regulation
The government has recently issued Government Regulation (Peraturan Pemerintah/PP) Number 43 of 2025 concerning Financial Reporting. This regulation introduces provisions on general-purpose and special-purpose financial statements, the standards committee, the operation of the financial reporting single window platform, support for the financial reporting ecosystem, administrative sanctions, and transitional and closing provisions.
In general, the regulation requires reporting entities—whether individuals, institutions, or companies across various sectors—to prepare and submit complete financial statements that comply with financial reporting standards and relevant ministerial or institutional regulations.
The regulation distinguishes between two types of financial statements: general-purpose financial statements and special-purpose financial statements. General-purpose financial statements must be submitted through the financial reporting single window platform. Special-purpose financial statements, on the other hand, are submitted through channels determined by each ministry, institution, or authority.
In this context, financial statements for tax reporting are considered special-purpose financial statements, as their preparation and reporting must adhere not only to accounting standards but also to the provisions of tax law.
Additionally, each reporting entity—whether preparing general- or special-purpose financial statements—must include a statement of commitment confirming the reporter’s responsibility, which will be further regulated under ministerial or institutional rules.
Note that the new regulation also establishes specific financial reporting obligations for parent entities. In addition to submitting consolidated financial statements, parent entities must also submit their own separate financial statements as supplementary information. They are also required to provide an independent auditor’s report on the consolidated financial statements and any additional documents deemed necessary.
Financial Statements Under Company Law
Aside from tax laws and PP Number 43 of 2025, financial reporting obligations are also governed by Law of the Republic of Indonesia Number 40 of 2007 concerning Limited Liability Companies (LLC Law). Article 68, Paragraph 1, of the LLC Law requires company directors to submit audited financial statements when any of the following conditions apply:
- The company's business activities involve collecting and/or managing public funds;
- The company issues debt acknowledgement letters to the public;
- The company is a public limited company (PLC);
- The company is a state-owned enterprise (SOE);
- The company has assets and/or annual turnover of at least IDR 50,000,000,000.00 (fifty billion rupiah); or
- When otherwise required by law or regulation.
Although tax laws do not explicitly mandate the submission of audited financial statements, taxpayers who meet any of the above criteria are required to do so. Failure to submit audited statements could result in the tax return being considered incomplete.
Ideatax can be your trusted partner in navigating complex accounting and financial reporting requirements to prevent such issues.
Legal References
- Law of the Republic of Indonesia Number 6 concerning General Provisions and Procedures of Taxation, as amended by Law of the Republic of Indonesia Number 7 of 2021 concerning Harmonization of Tax Regulations.
- Law of the Republic of Indonesia Number 40 of 2007 concerning Limited Liability Companies.
- Government Regulation Number 43 of 2025 concerning Financial Reporting.
