Accounting Policy to Write Off Overdue Tax Receivables

On 4 May 2018, the Ministry of Finance issued regulation No. 43/PMK.03/2018 regarding Accounting Policy to Write Off Overdue Tax Receivables.

Based on Government Regulation No. 71 of 2010 regarding Government Accounting Standards, it is stipulated that an asset should fulfil the criterion of potential future economic benefit which will be obtained by the Government. Accordingly, a tax receivable which is overdue based on the prevailing regulation in taxation does not meet the criteria for recognition as an asset. The overdue tax receivables, including accumulated allowance, shall be written off from the Financial Statements of the Ministry of Finance based on the tax receivable aging report of the Directorate General of Taxes.

Tax receivables that are overdue and have been written off will continued to be managed until the write-off is conducted in accordance with the prevailing tax regulations.

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