Mastering Tax Adjustments: Easy Corrections, Objections & Cancellations for Maximum Compliance!

The taxation sector plays a crucial role in economic governance, and new regulations aim to streamline processes for better compliance and efficiency. The Minister of Finance has issued Regulation No. 118 of 2024 (PMK-118) to update procedures related to TAX corrections, objections, reductions, eliminations, and cancellations. Effective January 1, 2025, this regulation introduces several key changes.

1. Procedures for TAX Corrections

PMK-118 expands the scope of corrections to include:

• Application of exchange rates
• Application of taxable sales value percentage
• Determination of non-taxable object value
• Reduction of Land and Building Tax (PBB) principal

Additionally, the Director-General of Taxes (DGT) has the authority to investigate errors, request supporting documents, and conduct on-site reviews to verify taxpayer claims.

2. Procedures for Objections and Appeals

PMK-118 consolidates previous regulations on objections. Key provisions include:

• The DGT must issue tax certificates upon taxpayer request for objections or appeals.
• Objection filing periods remain unchanged, but processing time may be extended due to legal rulings.
• Administrative fines for rejected or partially granted objections are now 30%, reduced from the previous 50% under Regulation 9/2013.

3. Reduction and Elimination of Administrative Penalties

PMK-118 provides clearer guidelines for reducing or eliminating penalties, including:

• Interest penalties
• Fines
• Increases in PBB rates
• Other administrative penalties related to PBB

The DGT can now reduce or eliminate penalties ex officio, particularly in cases of taxpayer errors or exceptional circumstances.

4. Transitional Provisions

To ensure a smooth transition, applications submitted before PMK-118 will be processed under previous regulations. Key provisions include:

Conclusion

The introduction of PMK-118 marks a significant improvement in TAX procedures, ensuring clarity and efficiency. Taxpayers should familiarize themselves with these changes to optimize compliance and avoid penalties