Indonesia explains time-limited administrative-penalty relief

The relief implements a procedural amendment

PMK 71/2026 amended PMK 118/2024 on correction, objection, reduction, cancellation and revocation procedures in taxation. The Ministry of Finance promulgated the amendment on 2 October 2026, when it entered into force. KEP-239/PJ/2026 then took effect on 8 October to specify the temporary administrative-penalty relief. The programme changes penalties and procedure; it does not reduce the underlying principal tax liability.^[1][2][3]

Earlier applications receive the largest reduction

For covered penalties linked to voluntary filing or correction, the official implementation material shows 100% relief for applications from 8 October through 31 December 2026, 50% for applications from January through March 2027 and 25% for applications from April through June 2027. The matrix separately addresses penalties arising during audit or review and specified VAT-invoice cases, so taxpayers should identify the relevant category rather than apply the headline percentage mechanically.^[1][3]

Relief requires an application and procedural choices

The Directorate General says relief is not automatic. A taxpayer must submit the required declaration and may not pursue another legal remedy for the same matter. A taxpayer already in an objection process may use the programme by withdrawing the objection in accordance with the applicable rules. The authority also distinguishes the deadline for paying principal tax from the deadline for requesting penalty relief; satisfying one does not by itself satisfy the other.^[1][3]

Groups should triage exposures before year end

Indonesian entities in multinational groups should inventory open assessments, voluntary corrections, audit-stage penalties and VAT-invoice exposures, then match each item to the official category and application window. The earliest window offers the broadest relief, but a decision to withdraw an objection changes the taxpayer's procedural position. Groups should therefore reconcile the principal tax, penalty notice, payment date and litigation status before filing, and retain the declaration and withdrawal evidence. The signed KEP-239 decision was not available in the official library reviewed; the percentages and conditions are drawn from the tax authority's own implementation release and education material.^[1][3]