Based on publicly available information, total tax refunds paid in 2025 reached approximately IDR 361.5 trillion, representing an increase of around 35.9% compared to 2024. The Minister of Finance publicly stated that the actual amount of tax refunds was significantly higher than initially reported and expressed concerns that the increase may indicate potential revenue leakage within the tax system.
Shortly after these concerns were raised, the government issued PMK-28/2026 (“PMK-28”), which came into effect on 1 May 2026 and replaced PMK-39/PMK.03/2018 (“PMK-39”). PMK-28 generally introduces stricter procedures for preliminary tax refund, which is refund granted without a full tax audit. Given the timing of its issuance, many have viewed PMK-28 as being connected to the government’s concerns regarding the potential leakage in tax refund payments.
The government’s official position is that PMK-28 was introduced to strengthen tax compliance, improve data accuracy, and ensure that the preliminary refund facility is granted in a more targeted and accountable manner. While the preliminary refund facility remains available, the requirements have become more stringent.
Please note that PMK-28 applies only to preliminary tax refunds under Art. 17C.7 and Art. 17D.3 of the KUP Law. It does not affect other categories of tax refunds, which continue to be governed by separate regulations.
Overview of the Changes
Under Indonesian tax law, a taxpayer with a tax overpayment may request a refund. In general, a tax refund request is processed through a full tax audit, which may take time and involve an extensive review by the DGT.
As an alternative, eligible taxpayers may use the preliminary refund facility, which allows an accelerated refund through a limited administrative review (penelitian) instead of a full audit. This facility is available only to taxpayers that fall within one of the following three categories:
- Taxpayers with certain criteria (“Qualified Taxpayers”): taxpayers that meet a comprehensive set of compliance and financial standards;
- Taxpayers that meet certain requirements (“Taxpayers with low refund values”): taxpayers within specified turnover and overpayment thresholds; and
- Low-risk VATable Entrepreneurs (“PKP Berisiko Rendah”).
PMK-28 does not change the three categories of taxpayers eligible for preliminary refunds. Instead, it introduces changes to the eligibility criteria, stricter review of taxpayers’ compliances with the requirements, and modifies the administrative mechanism through which refund applications must be submitted.
Summary of Key Changes
Implications for Taxpayers
For the taxpayers, the most immediate concern from PMK-28 is about data readiness. Under the new rules, the DGT will validate all tax credits, Input VAT, import documents, and payment records directly through the Coretax system before approving a preliminary refund claim. If any tax credit cannot be traced or verified — even if the underlying transaction is entirely valid — the DGT may reduce the approved refund amount or reject the claim partially.
This is relevant for companies that typically carry recurring overpayment positions, i.e.: exporters, manufacturers, companies transacting with VAT collectors (pemungut PPN), or companies with significant tax credits. For these taxpayers, proper data recording in the Coretax system has become an important part of preparing a preliminary refund claim.
Others
- For taxpayers that qualify both as Qualified Taxpayers and Low-Risk VATable Entrepreneurs, the applicable preliminary refund procedure will depend on the VAT Period:
- For January – November tax period: the examination process will follow the Low-Risk VATable Entrepreneur procedure;
- For December tax period: the examination process will follow the Qualified Taxpayer procedure.
- Under PMK-28, the DGT may cancel an issued Preliminary Tax Overpayment Refund Approval if the taxpayer is subject to a preliminary tax examination (bukti permulaan) or a tax crime investigation (penyidikan), as long as the tax overpayment payment order (SPMKP) has not yet been issued. If a tax overpayment refund decision (SKPKP) has also been issued, that decision will also be cancelled.
- Taxpayers that have received a preliminary tax overpayment refund may still be subject to a tax audit by the DGT. Based on the audit results, the DGT may issue a tax assessment letter in accordance with the applicable tax audit procedures.
Transitional Provisions
- Upon the issuance of PMK-28, any existing decree granting the status of Qualified Taxpayer issued under PMK-39 will no longer be valid. Taxpayers whose status is no longer valid may reapply for the status of Qualified Taxpayer from 1 June 2026 to 10 June 2026. If this deadline is missed, taxpayers still apply before 10 January of the following year.
- For pending preliminary refund requests submitted by Qualified Taxpayers before PMK-28 takes effect (1 May 2026), where SPMKP has not yet been issued, the request will be processed under PMK-28.
- Meanwhile, pending preliminary refund requests submitted by Taxpayers with low refund values and Low-Risk VATable Entrepreneurs before PMK-28 takes effect (1 May 2026) will continue to be processed under PMK-39.
Disclaimer: This Tax Highlight is intended solely for general informational purposes and should not be construed as professional advice. For tailored and accurate guidance that aligns with your specific circumstances, please contact our professionals.
