Besides Cutting Restitution Value, Purbaya Tightens Criteria for Eligible Taxpayers

Finance Minister Purbaya Yudhi Sadewa has issued Minister of Finance Regulation (PMK) No. 28 of 2026 on the Procedures for Preliminary Refund of Tax Overpayments, effective from 1 May 2026. The considerations section of the new regulation explains revisions to the rules concerning the procedures for refunding tax overpayments (tax restitution). This includes narrowing the criteria for taxpayers eligible for restitution while also cutting its value threshold. “To improve accuracy and provide greater legal certainty in the implementation of tax rights and obligations, adjustments are needed to the provisions regarding the procedures for preliminary refund of tax overpayments,” as quoted from PMK No. 28/2026 on Tuesday, 5 May 2026. The government, through PMK No. 28/2026, also reduces the maximum threshold for accelerated processing of Income Tax (PPh) and Value Added Tax (PPN) restitution. Whereas the previous rule allowed up to Rp5 billion, the ceiling is now lowered to Rp1 billion for each tax period. The narrowing of criteria for taxpayers eligible for restitution is also implemented. Accelerated restitution is now only available to certain Taxable Entrepreneurs (PKP), with sales value in one tax period ranging from more than Rp0 to Rp4.2 billion. “The maximum overpayment amount is Rp1 billion,” as stated in Article 9 paragraph (2) of PMK No. 28/2026. Furthermore, Article 10 paragraph (1) states that PKP who have not yet made deliveries of Taxable Goods or Taxable Services (BKP/JKP), including exports, are not included in the category eligible for this facility. This applies even if they report overpayment in their Monthly VAT Tax Return (SPT Masa PPN) and their sales value remains below the specified threshold. “To obtain a preliminary refund of tax overpayment, taxpayers meeting certain requirements must apply by filling in the preliminary tax overpayment refund column in the Tax Notification Letter,” states Article 10 paragraph (1). The regulation emphasises that preliminary restitution, which is the refund of tax overpayments without examination, will still be provided, but only to taxpayers with high compliance levels.