Since its enactment in 2007, the legal framework governing limited liability companies has been amended several times. One of the most recent changes was introduced through Law of the Republic of Indonesia Number 6 of 2023, which stipulates the Government Regulation in Lieu of Law of the Republic of Indonesia Number 2 of 2022 concerning Job Creation.
This legislative amendment was followed by regulations issued by the Ministry of Law and Human Rights that set out updated requirements and procedures for establishing, amending, and dissolving limited liability companies.
According to its recital, the regulation seeks to improve legal services for limited liability companies by making them more transparent, efficient, accountable, orderly, and accessible. It also reflects the government’s view that prior regulations were no longer aligned with developments in the business environment.
Amid these regulatory developments, taxation has become an integral part of each stage of a company’s legal life cycle, from its establishment and corporate changes to its eventual dissolution.
Tax Implications in the Establishment of a Limited Liability Company
During the establishment process, applicants must complete a registration form and submit supporting documents, including a founder’s statement, to obtain a taxpayer identification number (nomor pokok wajib pajak/NPWP) and tax filing slip. At this stage, however, the NPWP itself is not yet required to be attached, as it can only be issued after the company has been formally established and notarized.
The requirement to obtain a tax filing slip has given rise to differing interpretations. On the one hand, it is an obligation that must be fulfilled at least once during the establishment process. On the other hand, under general tax rules, filing a tax return is an annual obligation as long as the company remains operational.
Moreover, there is no explicit provision governing sanctions for applicants who fail to obtain an NPWP or tax filing slip. This absence of clear consequences creates legal uncertainty, particularly regarding whether such failure could result in the rejection or cancellation of the company’s establishment application.
Tax Implications of Amendments to the Articles of Association
Tax implications also arise in the context of amendments to a company’s articles of association and updates to corporate data. One of the required supporting documents is the company’s NPWP, which the notary must retain as evidence that the company is registered in the Directorate General of Taxes (DGT) system.
In practice, any changes to the articles of association or corporate data must also be reported by the company’s management to the DGT through the Coretax system. This obligation is regulated under Minister of Finance Regulation Number 1 of 2026 concerning the Fourth Amendment to Minister of Finance Regulation Number 81 of 2024 concerning Tax Provisions within the Coretax Administration System.
Tax Implications in the Dissolution of a Limited Liability Company
In the event of dissolution, Ministry of Law and Human Rights Regulation Number 49 of 2025 requires the notary to retain specific documents, such as the company’s NPWP and tax filing slip. However, the tax implications of dissolution extend beyond these administrative requirements.
Under the Minister of Finance Regulation Number 81 of 2024, corporate taxpayers undergoing liquidation or dissolution may apply to revoke their NPWP by submitting evidence that the legal entity has been formally dissolved. Additional supporting documents may include proof that a permanent establishment has ceased its business activities in Indonesia.
Importantly, a taxpayer requesting revocation of their NPWP will be subject to a tax audit, which may take up to 12 months to complete.
These are the tax implications of establishing, amending, and dissolving a limited liability company. If you need further guidance, Ideatax is ready to assist.
Also Read:
https://ideatax.id/articles/updates-to-the-05-msme-final-income-tax-and-its-business-impact
https://ideatax.id/articles/decoding-the-new-delta-spt
https://ideatax.id/articles/article-26-withholding-tax-on-foreign-taxpayers
