According to its 2024 Annual Report, the Directorate General of Taxes (DGT) issued 244 tax crime investigation orders (surat perintah penyidikan/SP2) throughout 2024. The figure reflects a notable increase from the 214 SP2s issued in 2023.
Amid this increased enforcement environment, more taxpayers chose to utilize the mechanism for disclosing non-compliant practices under Article 8(3) of the Law of the Republic of Indonesia Number 6 of 1983 concerning General Provisions and Procedures of Taxation (KUP Law). In 2024, 132 taxpayers invoked this provision, up from 44 taxpayers in 2023.
The DGT also reported that state revenue losses under active investigation settlements totaled IDR 71.29 billion in 2024, down from IDR 766.42 billion in 2023. Meanwhile, completed investigation files submitted to prosecutors (P-21 status) slightly decreased from 89 files in 2023 to 86 in 2024. The application of Article 44B of the KUP Law to terminate investigations saw a modest increase, from 23 files in 2023 to 26 in 2024.
These statistics point to the growing reliance on voluntary disclosure mechanisms to resolve tax disputes. The mechanism offers taxpayers an opportunity to rectify state revenue losses before a case escalates into an investigation.
Although voluntary disclosure provisions are not new to Indonesia’s tax system, their increased utilization in 2024 makes them worth revisiting, specifically regarding the concept, legal grounds, and procedures.
Voluntary Disclosure 101
Voluntary disclosure allows taxpayers to rectify errors or omissions in their tax compliance while the tax authority has conducted an audit or a preliminary evidence audit.
This process differs from a standard tax return amendment, which is typically self-initiated by the taxpayer before any audit commences. By contrast, a voluntary disclosure occurs once audit or preliminary evidence audit proceedings are already underway.
The primary legal basis is governed by Article 8 of the KUP Law, as amended by Law of the Republic of Indonesia Number 7 of 2021 concerning Harmonization of Tax Regulations (HPP Law).
Article 8 of the KUP Law establishes two distinct disclosure procedures, each carrying separate contexts and consequences.
First, voluntary disclosure of incorrect tax return filing under Article 8(4). The rule applies when a taxpayer undergoes a tax compliance audit.
Second, voluntary disclosure of non-compliant practice under Article 8(3) and 8(3a). The rule applies when a taxpayer is under a preliminary evidence audit due to suspected tax crimes.
Each procedure carries its own eligibility criteria, filing procedures, and administrative penalties.
Voluntary Disclosure During an Audit
Under Article 8(4) of the KUP Law, a taxpayer undergoing a tax audit by the Director General of Taxes may disclose incorrect monthly or annual tax return filings for the tax period under review, reflecting true tax liabilities. This option is open whether or not the taxpayer previously amended their tax return.
Procedural details are outlined in the Minister of Finance Regulation (Peraturan Menteri Keuangan/PMK) Number 15 of 2025 concerning Tax Audits. The regulation mandates that tax auditors must grant taxpayers the opportunity to disclose any incorrect tax return filing.
This opportunity, however, is available only before the tax auditor issues notification of audit results (surat pemberitahuan hasil pemeriksaan/SPHP). Once SPHP is issued, the taxpayer can no longer use this disclosure procedure for the audit concerned.
The incorrect tax return filing disclosure must be submitted via a dedicated report signed by the taxpayer, an authorized representative, or a proxy, including a tax consultant, addressed to the tax office where the taxpayer is registered.
The report must include a calculation of the tax underpayment reflecting actual circumstances, a tax payment slip for the underpayment, and a tax payment slip of the applicable administrative interest sanction based on the monthly interest rate set by the Minister of Finance.
The interest is calculated from the end of the tax return filing deadline until the payment date, capped at 24 months.
If the voluntary disclosure does not result in a tax underpayment, no tax payment slips for underpayment or the related administrative sanction are required.
Voluntary Disclosure of Non-Compliant Practices
Unlike standard audits, Article 8(3) of the KUP Law allows taxpayers to disclose non-compliant practices even after a preliminary evidence audit has commenced. The disclosure prevents the matter from proceeding to investigation.
This provision embodies the ultimum remedium principle in tax enforcement, treating criminal prosecution as a measure of last resort after administrative remediation options have been exhausted.
A voluntary disclosure of non-compliant practices can be made, provided the initiation of an investigation has not yet been notified to the public prosecutor by the investigators. Further rules for this procedure are detailed in PMK Number 177 of 2022 and Director General of Taxes Circular Letter Number SE-1/PJ/2024.
Unlike voluntary disclosure of incorrect tax return filings subject to interest penalties, disclosing non-compliant practices incurs a 100% administrative fine on the underpaid tax amount, pursuant to Article 8(3a) of the KUP Law.
This penalty rate was reduced from 150% to 100% following the enactment of the HPP Law. Despite the 100% fine, this path remains far less severe than criminal prosecution, which can result in imprisonment and judicial fines reaching up to four times the underpaid tax amount.
Disclosure Procedure
A taxpayer using Article 8(3) of the KUP Law must submit the disclosure of non-compliant practices in writing and sign it personally. This right cannot be delegated to another party.
The disclosure must include a calculation of the underpaid tax, a tax payment slip or other administrative evidence showing settlement of the underpaid tax, and a tax payment slip or other administrative evidence showing payment of the 100% fine under Article 8(3a) of the KUP Law.
SE-1/PJ/2024 also provides an alternative where the taxpayer has not submitted a written disclosure but has already made payment in connection with the disclosure of non-compliant practices. In such a case, the written disclosure may be replaced by an official record of the request for information.
Following the Coretax rollout, disclosure of non-compliant practices may also be submitted electronically through the system.
Consequences of Disclosure
If the voluntary disclosure accurately reflects true conditions and the amount paid equals or exceeds the tax underpayment established during the preliminary evidence audit, the preliminary evidence audit will be terminated without proceeding to the investigation stage.
A termination notice must be issued to the taxpayer. Nevertheless, if subsequent data reveals discrepancies from what was disclosed, the preliminary evidence audit may be reopened for the relevant tax period, part of a fiscal year, fiscal year, or type of tax concerned.
How It Differs From Article 44B of the KUP Law
Voluntary disclosure under Article 8(3) of the KUP Law is frequently compared with Article 44B of the KUP Law, which governs the termination of tax criminal investigations in the interest of state revenue.
The difference lies in the procedural stage of enforcement. Article 8(3) applies to prevent a preliminary evidence audit from escalating into an investigation. Meanwhile, Article 44B applies when an investigation has begun to halt prosecution before the case goes to trial.
Both instruments provide taxpayers a pathway to rectify errors and restore state revenue administratively without facing criminal court proceedings.
The rising utilization of Article 8(3) in 2024 suggests more taxpayers are optimizing the rule when facing a preliminary evidence audit. For taxpayers undergoing either a tax audit or a preliminary evidence audit, understanding the applicable requirements, procedures, and deadlines is particularly important because these mechanisms are available only at specific stages and may involve significant financial consequences.
For expert guidance on navigating tax audits or preliminary evidence audits, Ideatax is ready to assist.
Legal Basis
- Law of the Republic of Indonesia Number 6 of 1983 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.
- Government Regulation Number 50 of 2022 concerning Procedures for Exercising Rights and Fulfilling Tax Obligations.
- Minister of Finance Regulation Number 177 of 2022 concerning Procedures for Preliminary Evidence Audit of Tax Crimes.
- Minister of Finance Regulation Number 15 of 2025 concerning Tax Audits.
- Director General of Taxes Circular Letter Number SE-1/PJ/2024.
References
Directorate General of Taxes. (2025). 2024 Annual Report. Jakarta: DGT.
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