Mastering Tax Adjustments: Easy Corrections, Objections & Cancellations for Maximum Compliance!
- February 19, 2025
- Posted by: Administrator
- Category: Tax Updates
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:
| Application Type | Processing Regulation |
|---|---|
| Correction requests submitted before PMK-118 | Follow PMK-11/2013 until resolution |
| Objections submitted before PMK-118 | Follow PMK-9/2013 until resolution |
| Reduction or elimination of penalties requested before PMK-118 | Follow PMK-8/2013 until resolution |
| New requests post-PMK-118 | Processed under PMK-118 |
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