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
1. Qualified Taxpayers
| Pertaining to | PMK-39 | PMK-28 |
|---|---|---|
| Qualified Taxpayers | The main criteria included:
|
All previous criteria remain, but PMK-28 adds more requirements:
Further requirements regarding the audited financial statements with unqualified opinion for 3 consecutive years:
To obtain the status of Qualified Taxpayers, the application should be submitted no later than 10 January. The DGT must issue its approval or notification within 30 working days after the application is received. If the DGT does not issue any approval or notification within this period, the application will be deemed approved. |
2. Taxpayers with Low Refund Values
| Pertaining to | PMK-39 | PMK-28 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Taxpayers with low refund values | Overpayment thresholds (no turnover limit):
|
Overpayment thresholds now include a turnover/revenue threshold:
PKP that have not yet generating taxable revenue and whose VAT overpayment does not exceed the above applicable thresholds are not treated as Low-Risk VATable Entrepreneurs. Companies with no taxable deliveries yet as per Art. 9.2a VAT Law are excluded (not eligible). |
3. Low-Risk VATable Entrepreneurs
| Pertaining to | PMK-39 | PMK-28 |
|---|---|---|
| Low-risk VATable Entrepreneurs | List of PKP carrying out certain qualifying activities included:
The DGT could independently assign low-risk status by ex officio based on tax data or information. |
The qualifying activities have been expanded to include:
PMK-28 removes Art. 13.2.f of PMK-39. Therefore, taxpayers that also qualify under the low refund value category will be processed under the procedure applicable to taxpayers with low refund values. The ex-officio assignment (where DGT could independently assign low-risk status) has been removed under PMK-28. The DGT must issue its approval or notification within 15 working days after the application is received. If no approval or notification is issued within this period, the application will be deemed approved. |
4. Preliminary Refund Review by the DGT
| Pertaining to | PMK-39 | PMK-28 |
|---|---|---|
| Preliminary refund review | The preliminary review verifies whether:
|
More detailed rules now apply. To be credited, tax documents must be:
If any item cannot be verified in Coretax, the DGT may reduce the approved refund amount, even if the underlying transaction is valid/can be proven. For PKP, the DGT will also check on the fulfilment of certain activities (pemenuhan kegiatan):
Specifically for Low-Risk VATable Entrepreneurs, the DGT will verify whether at least 80% of the taxpayer’s total eligible delivery and exports in the relevant VAT Period are derived from the above activities (excluding VAT-exempt or non-VAT-subject deliveries). |
5. Application Process
| Pertaining to | PMK-39 | PMK-28 |
|---|---|---|
| Application process | Applications generally submitted to the registered tax office. | Applications must now be submitted electronically through the Coretax taxpayer portal. Manual submission is only permitted where electronic submission is technically unavailable. |
6. Timeline for Issuance of the Preliminary Tax Overpayment Refund Decree
| Categories | Type of Tax | DGT Decree Timeline |
|---|---|---|
| Qualified Taxpayers | Income Taxes | 3 months |
| VAT | 1 month | |
| Taxpayers with low refund values | Income Taxes | 1 month |
| VAT | 1 month | |
| Individual Taxpayer | — | 15 working days |
| Low-risk VATable Entrepreneurs | VAT | 1 month |
If the DGT does not issue a decree or notification within the prescribed period, the taxpayer’s preliminary refund request will be deemed approved, and the DGT must issue the relevant refund decree after the period ends.
Implications for Taxpayers
For 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 particularly relevant for companies that typically carry recurring overpayment positions, including 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 from 1 June 2026 to 10 June 2026. If this deadline is missed, taxpayers may 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.
- 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.
