The Indonesian government has updated its regulations on tax refund procedures through the Minister of Finance Regulation No. 28 of 2026 on Procedures for Preliminary Tax Refunds (MoF Reg. 28/2026). A key feature of this regulation is the preliminary tax refund facility designed specifically for Qualifying Taxpayers (Wajib Pajak Persyaratan Tertentu).
Under this scheme, eligible taxpayers can receive an expedited refund for overpaid Income Tax (PPh) or Value Added Tax (VAT/PPN) without undergoing a comprehensive tax audit upfront.
This policy aims to accelerate tax administration services while bolstering cash flow for both business entities and individual taxpayers. However, this facility is not available to everyone—taxpayers must meet specific criteria and thresholds set out in MoF Reg. 28/2026.
Who Qualifies as a “Qualifying Taxpayer”?
Article 9 of MoF Reg. 28/2026 outlines the categories of taxpayers eligible for the expedited tax refund mechanism:
- Non-Business Individual Taxpayers
Individual taxpayers who do not run a business or practice an independent profession can access expedited refunds as long as they file an Annual Income Tax Return showing an overpayment status.
- Individual Taxpayers Engaged in Business or Independent Professions
For self-employed individuals or business owners, preliminary refunds are available provided the total overpayment reported in the Annual Return does not exceed IDR 100 million for a given Tax Year or Fractional Tax Year.
- Corporate Taxpayers
Corporate entities qualify if their annual gross revenue (turnover) does not exceed IDR 50 billion and their total Income Tax overpayment is capped at IDR 1 billion per Tax Year or Fractional Tax Year.
- Taxable Persons for VAT (PKP)
VAT-registered businesses can apply for preliminary VAT refunds if their turnover within a single Tax Period does not exceed IDR 4.2 billion and the overpayment amount does not exceed IDR 1 billion.
Note: This facility does not apply to PKPs that have not yet made any deliveries of Taxable Goods (BKP), Taxable Services (JKP), or qualifying exports, even if they report an overpayment position.
How to Apply for a Preliminary Tax Refund
Taxpayers can apply for a preliminary refund directly within their Tax Return by checking/completing the dedicated preliminary tax refund section.
Once the return is filed, the Directorate General of Taxes (DGT / DJP) conducts an administrative review of the reported data before issuing a decision. This verification process covers:
- The accuracy of calculations and completion of the Tax Return;
- The validity of withholding tax certificates and Income Tax payments;
- The authenticity of Input VAT claimed or self-paid; and
- Compliance with requirements for specific transactions (e.g., export activities, deliveries to designated VAT collectors, or exported taxable services).
This review ensures that all information submitted aligns with applicable tax laws.
Ensure Withholding Certificates and Tax Invoices are Validated
The success of a preliminary refund application heavily depends on supporting documentation.
Withholding certificates, collection certificates, and Income Tax payment receipts must be issued through the DGT’s official administrative system or carry valid legal status.
The same rule applies to credited Input VAT. Tax Invoices (Faktur Pajak), import documents, and customs declarations must meet all administrative requirements to serve as valid grounds for a refund. Missing or non-compliant documentation may be disallowed by the DGT during the review.
Refund Processing Timelines
MoF Reg. 28/2026 establishes strict statutory deadlines for the DGT to process preliminary refund applications. The issuance of the Preliminary Refund Decision Letter (SKPPKP) follows these turnaround times:
- 15 business days for Individual Income Tax refunds;
- 1 month for Corporate Income Tax refunds; and
- 1 month for Value Added Tax (VAT) refunds.
If the DGT fails to issue a decision or formal rejection notice within these timeframes, the refund application is deemed automatically approved by operation of law.
Conclusion
MoF Reg. 28/2026 simplifies access to tax refunds for Qualifying Taxpayers via the preliminary refund scheme. Individual taxpayers, corporations, and VAT-registered businesses can all benefit, provided they fall within the regulation’s turnover and overpayment caps.
To ensure a seamless refund process, taxpayers should carefully verify their return details, validate all withholding certificates and Tax Invoices, and comply fully with administrative requirements. Proper preparation is the most effective way to secure a prompt and hassle-free tax refund.
