01. Policy Background: From “Manual Audits” to “Data-Driven Verification”

PMK 28/2026, formally titled Regulation on Procedures for Preliminary Tax Refunds, has a clear objective: to improve the accuracy of tax refund reviews while providing taxpayers with greater legal certainty regarding their rights and obligations.

This is more than a procedural adjustment; it represents a shift in the regulatory approach. Previously, tax refund reviews relied primarily on field audits. However, with the full implementation of the Coretax system, the tax authorities are moving toward integrated tax data management, electronic document verification, and compliance risk-based administration.

02. Who Is Eligible for Preliminary Tax Refunds? Three Categories of Taxpayers

Category 1: Certain Eligible Taxpayers (Specific Criteria Taxpayers)

This category targets businesses with a consistent record of high tax compliance and is subject to strict eligibility requirements:

• Income tax annual returns for the preceding three years must have been filed on time;
• All monthly tax returns from January to November of the preceding year must have been submitted;
• No outstanding tax liabilities;
• No history of late tax payments within the preceding five years;
• Financial statements must have been audited for three consecutive years, with unqualified audit opinions;
• No criminal penalties within the preceding five years.

Eligibility is not granted automatically; it must be earned through a sustained record of tax compliance.

Applications must be submitted by January 10 each year. The Directorate General of Taxes (DJP) must issue a decision within 30 working days. If no response is received within this period, the application is deemed automatically approved.

Category 2: Taxpayers Meeting Certain Thresholds (Specific Conditions Taxpayers)

This category is intended for businesses with manageable operating scale and tax refund amounts, and a relatively low compliance risk:

• Individual taxpayers: Excess tax payments must not exceed IDR 100 million;
• Corporate taxpayers: Annual gross turnover must not exceed IDR 50 billion, and excess tax payments must not exceed IDR 1 billion;
• Taxable Entrepreneurs (Pengusaha Kena Pajak or PKP): Taxable transaction value must not exceed IDR 4.2 billion, and excess tax payments for each tax period must not exceed IDR 1 billion.

No separate eligibility assessment is required for this category. Taxpayers simply need to select the “Apply for Preliminary Tax Refund” option in their tax returns, making this the simplest application process.

Category 3: Low-Risk Taxpayers

This category covers entities with relatively high levels of transparency and regulatory oversight, including:

• Publicly listed companies;
• State-owned enterprises (SOEs) and regional government-owned enterprises;
• Main Customs Partners (exporters);
• Authorized Economic Operators (AEOs);
• Certain manufacturers and pharmaceutical wholesalers;
• Medical device distributors;
• Subsidiaries controlled by state-owned enterprises, among others.

03. What Has Actually Changed Under the New Regulation?

One of the most significant changes is the strengthening of administrative verification.

During the approval process, the tax authorities will verify:

• The accuracy of tax calculations;
• The validity of withholding tax certificates;
• NTPN (State Revenue Transaction Number) payment records;
• The validity of tax invoices;
• Import documentation;
• The authenticity of export activities and certain sales transactions.

With the support of Coretax, most of these verification procedures can now be completed electronically through data exchanges between systems, significantly improving processing efficiency.

However, simplified procedures do not mean relaxed supervision.

PMK 28/2026 explicitly maintains the tax authorities' right to conduct subsequent tax audits, even after a preliminary tax refund has been granted. If underpaid taxes are subsequently identified, taxpayers may still be required to pay the tax shortfall together with the applicable administrative penalties.

The underlying principle is one of “trust supported by supervision.” Businesses with strong compliance records benefit from more convenient procedures, while the accuracy of submitted data and substantive compliance remain fundamental to the system.

04. What Does This Mean for Businesses?

Translating the above requirements into practical business actions:

• First, the quality and consistency of routine tax filings, annual tax returns, and financial audits directly determine whether a company can qualify for more efficient tax refund procedures in the future.
• Second, regardless of the taxpayer category, accurate and complete accounting records, tax invoices, and supporting documentation are essential to ensuring a smooth preliminary tax refund application.

PMK 28/2026 reflects a clear direction: tax refund facilitation is no longer merely an administrative benefit, but has become part of the broader compliance relationship between taxpayers and tax authorities.

Strong compliance leads to faster refunds; compliance deficiencies can result in restrictions and additional scrutiny.

Based on years of observing Indonesia's regulatory environment, one important consideration remains: regulations on paper and their implementation in practice do not always move at the same pace. While businesses must maintain their compliance standards and adhere to regulatory requirements, actual implementation may also be influenced by various factors, including changes in government officials and differences in administrative approaches and management styles.

END

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