Director General of Taxes Decree Number KEP-71/PJ/2026 Waives Penalties for Late Filing of 2025 Corporate Income Tax Returns

Introduction

On 30 April 2026, the Director General of Taxes (“DGT”) issued Director General of Taxes Decree Number KEP-71/PJ/2026 on Tax Policy in Relation to the Implementation of the Core Tax Administration System for the Submission of Annual Income Tax Returns for Corporate Taxpayers for Fiscal Year 2025 (“Decree 71/2026”), which took effect on the same date. The DGT issued this regulation to provide administrative convenience for Corporate Taxpayers.

Corporate Taxpayers are required to submit the Annual Income Tax (“PPh”) Return (“SPT”) for Fiscal Year 2025 through the new Core Tax Administration System (SIAP). However, the implementation of this new system requires an adaptation period to allow Taxpayers to understand its operation and to ensure the readiness of the system itself. Therefore, Decree 71/2026 is intended to prevent Corporate Taxpayers from incurring losses or sanctions during the reporting transition period.

 

Key Provisions

Waiver of Administrative Sanctions

According to the First Dictum, Corporate Taxpayers are granted a waiver of administrative sanctions. This waiver applies to the submission of Annual Tax Returns, both for a full Fiscal Year and a Portion of a Fiscal Year, as referred to in the Second Dictum. The waiver covers three categories of relief, as follows:

1. Late submission by Corporate Taxpayers of the Annual Corporate Income Tax Return for Fiscal Year 2025, with a tolerance period of up to 1 (one) month after the reporting due date.
2. Late payment or remittance by Taxpayers of Article 29 Corporate Income Tax for Fiscal Year 2025, with a maximum grace period of 1 (one) month after the payment due date.
3. Underpayment or insufficient remittance of Article 29 Income Tax for Corporate Taxpayers for Fiscal Year 2025 that obtain an extension for the submission of the Annual Tax Return, provided that the Taxpayer settles the payment no later than 1 (one) month after the payment due date.

Types of Sanctions and Protection Mechanism

The Third Dictum clarifies that the administrative sanctions being waived consist of fines and/or interest arising from late reporting and payment. Furthermore, the Fourth Dictum establishes the protection mechanism, under which the DGT will not issue a Tax Collection Letter (“STP”) for delays that satisfy the applicable requirements. On the other hand, the Fifth Dictum stipulates that if a tax office has already issued an STP for a delay that should have qualified for this relief, the Head of the Regional Office of the Directorate General of Taxes is required to revoke such sanctions ex officio.

Protection of Certain Taxpayer Criteria Status

The Sixth Dictum provides that a record of late submission of Tax Returns (which receives this waiver of sanctions) will not be used as grounds to reject an application for designation as a Taxpayer Meeting Certain Criteria.

 

Closing

Decree 71/2026 constitutes an anticipatory measure and facilitative policy issued by the DGT for Corporate Taxpayers during the transition period for the implementation of the Core Tax Administration System (SIAP). This policy provides relaxation in the form of a waiver of administrative sanctions (fines and/or interest) for late submission of the Annual Income Tax Return for Fiscal Year 2025, late payment, and underpayment of Article 29 Income Tax, with a maximum tolerance period of one month from the due date. In addition, the DGT will not issue an STP for delays that satisfy these requirements and further guarantees that such history of delay will not adversely affect Taxpayers when applying for Certain Taxpayer Criteria status in the future.