The Directorate General of Taxes issued a regulation No. PER-16/PJ/2025 on August 13, 2025, amending PER-6/PJ/2025 on the procedures for preliminary refunds of tax overpayments. This regulation primarily focuses on simplifying the preliminary tax refund process for taxpayers in certain categories.

General key points that are regulated by PER-16/PJ/2025 are as follows:

• Expanded input VAT credits
  The new regulation outlines the specific requirements for preliminary VAT refunds. To be eligible, input VAT must be substantiated by official documents, including VAT invoices, equivalent documents, import declarations, tax payment slips, and customs VAT receipts. These documents must be validated and electronically exchanged through the DGT system. This requirement aims to ensure the validity and accuracy of the input VAT being claimed. The regulation also clarifies that only self-paid VAT (for the utilization of services or intangibles from abroad) is creditable. Any input VAT that does not fulfill these requirements will be excluded.
• Special Purpose Companies (SPCs) and Collective Investment Contracts (KIKs)
  The regulation clarifies the refund process for these entities, which are categorized as low-risk VAT-registered businesses. It also explicitly excludes any input VAT that fails to meet these requirements from preliminary refunds. This ensures that preliminary refunds related to real estate acquisitions by Special Purpose Companies (SPCs) or Collective Investment Contracts (KIKs) adhere to the same stringent validation standards introduced in the preceding requirement.
• Specific provisions for individual Taxpayers
  A new provision addresses overpaid tax refunds for individual taxpayers for the fiscal year 2024.
  1. 1. This applies to taxpayers who made an error in crediting their Article 21 WHT, resulting in an overpayment.
     2. In such cases, the Directorate General of Taxes will not issue a preliminary tax refund decree.
     3. The tax overpayment is considered non-existent and will not be followed up with an audit.
     4. This provision is applicable solely to individuals who receive income from a single employer or pension source. It does not accommodate cases involving external zakat deductions or discrepancies stemming from reporting inaccuracies.

This regulation is designed to provide greater legal certainty and streamline the process of preliminary tax refunds, while ensuring the accuracy of tax input credits and addressing specific issues for individual taxpayers.