Extension Reporting Annual Tax to Avoid Sanctions – Reporting Annual Tax Returns (SPT) is a responsibility that must be fulfilled by all Taxpayers, including individuals and entities. Currently, the Indonesian tax authority, namely the Directorate General of Taxes (DJP), has set a due date for submitting Annual Tax Returns, namely March 31 for individual taxpayers and April 30 for corporate taxpayers.

However, in situations where a taxpayer cannot fulfill this obligation on time, there is an option to extend the period for submitting the Annual Tax Return for a maximum of two months after the initial deadline. This rule has been explained in Article 13 of the Minister of Finance Regulation (PMK) Number 243 of 2014 concerning Notification Letters (SPT).

Procedures for Extending Annual SPT Reporting

According to the Director of Counseling, Services and Public Relations of the Directorate General of Taxes (DJP) of the Ministry of Finance Dwi Astuti, an extension of the time for submitting the Annual SPT can be done by notifying the Director General of Taxes about this.

For example, if the initial deadline for individual taxpayers is March 31, then reporting the Annual SPT can be extended until the end of May. Likewise, if the initial deadline for corporate taxpayers is April 30, then reporting the Annual SPT can be extended until the end of June.

Notification regarding the extension of the Annual SPT must be submitted in writing to the Tax Service Office (KPP) where the taxpayer is registered or via the jasa.go.id page for taxpayers who already have an electronic certificate (sertel). Article 14 PMK 243/2014 together with PMK 9/2018 stipulates that notification of the extension of the Annual SPT must be accompanied by documents such as a temporary calculation of the tax payable in a tax year for which the submission deadline is extended, a temporary financial report, as well as a Tax Payment Letter (SSP) or other documents. Which is considered equivalent to SSP as proof of repayment of the underpayment of tax owed.

The Director also explained that taxpayers who submit extension notifications will not be subject to sanctions for late submission of Annual Tax Returns as long as they do not exceed the extension deadline. This shows the importance of understanding the procedures for extending Annual SPT reporting to avoid potential fines or other sanctions.

Sanctions for Failure to Submit Annual SPT

Fines or sanctions imposed for late or non-submission of Annual Tax Returns in Indonesia can vary depending on several factors, including the amount, length of delay, and type of violation committed. The following is the latest information regarding applicable fines or sanctions:

Late Charge

Taxpayers who are late in submitting their Annual Tax Return will usually be subject to an administrative fine of 2% per month of the amount of tax owed, with a maximum fine of 48% of the tax that should be paid.

Administrative Sanctions

Apart from fines, taxpayers may also be subject to administrative sanctions in the form of a written warning, freezing of their NPWP (Taxpayer Identification Number), or temporary business closure, depending on the policy and assessment of the tax authority.

Tax Audit

Delays or non-submission of Annual Tax Returns can also increase the taxpayer’s risk of being audited by the tax authority. These audits can result in tax adjustments, additional fines, or even legal action if significant violations or non-compliance are discovered.

Common Causes of Delay in Reporting Annual Tax Returns

There are several common causes that can cause delays in reporting Annual SPT in Indonesia, here is a summary

Difficulties in Financial Data Processing

The process of collecting, processing and compiling the financial data required to prepare an Annual SPT can be complicated, especially for Taxpayers who have complex businesses or less organized accounting systems.

Insufficient Understanding of Tax Requirements

Some Taxpayers may not fully understand the applicable tax requirements or do not have sufficient knowledge regarding the procedures for filling out the Annual Tax Return, which can cause delays in the reporting process.

Difficulty in Obtaining Supporting Documents

Obtaining the supporting documents needed to complete the Annual SPT, such as financial reports or SSP (Tax Payment Letter), can also cause delays if the document collection process takes a long time.

Technical Issues in Using the Online Reporting System

The use of online reporting systems required by tax authorities may present technical challenges for some taxpayers, especially if they lack technology skills or experience internet connection problems.

Limited Internal Resources

Taxpayers who have limited internal resources, whether in terms of personnel, time or finances, may experience difficulties in completing administrative tasks such as preparing Annual Tax Returns on time.

Delays from Third Parties

Sometimes, delays in obtaining information or documents from third parties, such as tax consultants or banks, can also affect the Taxpayer’s ability to submit their Annual Tax Return according to the stipulated time limit.

Being aware of the potential causes of these delays can help taxpayers to identify and address problems that may arise so they can fulfill their tax obligations on time.

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